Net Neutrality regulation is failing UK consumers, innovators, and investors. It’s time for broadband internet policy that improves consumer welfare, internet innovation, and network investment for the UK
Much is said and written about net neutrality (NN), but many claims are devoid of facts. European countries have had NN regulation for some years. European operators comply with the rules, and European regulatory authorities publish reports saying the regulation is working well and that there is no problem. However, few telecom regulators have performed or published actual cost-benefit analyses or impact assessments of the regulation. Policymakers find it hard certify or quantify the level and/or degree the regulation fulfills its stated goals for end user rights and innovation.
Strand Consult have launched its new report “Net Neutrality regulation is failing UK consumers, innovators, and investors. It’s time for broadband internet policy that improves consumer welfare, internet innovation, and network investment for the UK.”
This report is part of an extensive series of reports Strand Consult has published on this topic for more than a decade. This series includes in depth investigations of over 50 countries. Strand Consult publishes this UK-focused report as the UK telecom regulator Ofcom has conducted a proceeding on the efficacy of this policy for more than a year. Ofcom, recognising that things could be better in UK, appears to be the first European regulator to modernise its policy and to enable the very provisions which the rules could restrict: zero rating, specialised services, premium offers, and reasonable traffic management, albeit with oversight.
Strand Consult presents its report to provide valuable empirical and academic knowledge to lift the level of discussion in UK. It provides hard facts which quantify the cost for the UK and Europe, and it shows that the NN regulation is failing consumers, innovators, and investors. Broadband policy can do better, and Strand Consult applauds Ofcom for taking an important step.
The European Union faces a €300 billion shortfall to achieve connectivity goals; the UK alone, £25 billion to reach its 5G targets. Net neutrality has stifled internet innovation in Europe. Since rules were imposed in 2015, Europe’s share of global internet market value has fallen to less than 2 percent of the world’s total and is on track to be eclipsed by Africa. European companies used to figure in the top 20 internet companies; today no European company appears until #50.
No leading 5G nation has hard NN regulation. South Korea, Japan, China, and US speed ahead on 5G investment and rollout. People and enterprises in these countries innovate and adopt 5G-enabled services in social care, creative industries, advanced manufacturing, transport, climate solutions, and other domains. Europeans are missing out on this valuable 5G innovation, in part because of misguided NN regulation.
Strand Consult conducts extensive analysis of NN regulation across countries. Here are the 10 key conclusions from this new report:
- NN regulation harms consumers by limiting the range and type of broadband offers, making them less accessible and relevant, and forcing consumers to value data uniformly.
- NN regulation blocked consumers from accessing free and zero rated offers of health and education applications during the pandemic, when people were most vulnerable financially and locked down in their homes, restricted from schools and hospitals.
- NN regulation slows 5G investment, rollout, and adoption. No leading 5G nation has hard NN regulation.
- NN regulation creates regulatory uncertainly and deters experimentation in pricing, partnerships, applications, and offers.
- NN regulation stifles innovation. Countries with hard NN regulation have experienced a decline in local content development and apps. Meanwhile established platform giants have grown larger and more powerful globally.
- Competition law and soft net neutrality rules are sufficient to promote internet innovation. Indeed countries with no NN regulation like China, Australia and New Zealand produce significant innovation, apps, and services.
- NN regulation can distort the broadband market by restricting broadband providers’ ability to price effectively and to engage with content application provider for cost recovery.
- NN regulation deters broadband providers’ ability to engage in welfare and efficiency enhancing practices which can improve broadband for the financially vulnerable.
- Regulators don’t need NN regulation to police broadband. Competition law and transparency rules can effectively protect consumers.
- Policymakers should pursue evidence-based broadband policy which objectively delivers consumer welfare, network investment, and internet innovation.
Strand Consult is one of the few which has studied net neutrality academically and empirically. It houses a team of leading telecom policy experts who perform empirical analysis and international comparisons on this issue and others. Strand Consult’s research is tapped by policymakers around the world.
Contact Strand Consult to order this unique and important report so that you can get the real story behind government’s efforts to regulate the internet.
Contact Strand Consult to get a copy of the report.