The UK will pay for US net neutrality rules

THE US Federal Communications Commission (FCC) announced on Tuesday that it would enforce the controversial principle of net neutrality in the US. The issue of whether or not it has the legal mandate for this statement will no doubt bring on a multitude of lawsuits, as Republican federal communications commissioner Robert McDowell said over the weekend. But what, if anything, does this mean for the UK and the EU in general?

Net neutrality is a confused term that means all internet traffic should be treated equally by internet service providers (ISP). That sounds like a good idea, but in practice ISPs use traffic management every day to ensure timely delivery of email to one customer and video streaming to another. Without traffic management, the internet as we know it today would suffer from greater congestion and issues with content delivery. Net neutrality attempts to regulate the internet, but by imposing limits on the way ISPs do business it risks making it harder to use.

Both the EU and UK support a light touch approach to internet regulation. They believe transparency in both business offerings and practices will leave room for innovation and investment in next generation internet technology. That stance isn’t expected to change immediately, but the FCC’s announcement will inevitably influence decisions and discussions as the 2009 Telecom Directive is implemented next year for all EU member states.

Meanwhile, US ISPs changing how they do business will impact the UK in a variety of ways. First, content creators like the BBC and ITV (which use many small production companies from London) won’t be able to strike deals with ISPs in the US because the FCC has banned ISPs from doing so to differentiate their content offerings.

There is also now no guarantee that the BBC’s international iPlayer, due to launch next year, will not face programmes delivered with delays or severe buffering because all content will have to be treated the same.

Major ISPs with an international presence in the UK and the EU will now have to invest in managing the FCC rules in the US.

This will mean slower innovation, fewer jobs created and less investment in their international business, as ISPs review their internal processes and put more time and effort into achieving “neutrality”.

Though this might sound grim, the good news is that the FCC hasn’t applied such strict measures to wireless broadband. So in the US we will see more investment in wireless broadband, the fruits of which will benefit their businesses in the UK and the EU as well.

Dominique Lazanski is technology policy analyst for the Taxpayers’ Alliance