The Next Front: Net Neutrality

There was good news for Digital Britain last week when the High Court agreed to review the Digital Economy Act following a petition by BT and TalkTalk. After the legislation was rushed through Parliament in the wash-up this spring and seemed to be moving inexorably toward enforcement, this was an encouraging development for those of us who believe that the Act’s copyright infringement provisions are both disproportionate and detrimental to technological innovation in the UK. Enforcement of the Act will now be delayed for at least a few months (rumour has it that Ofcom will even delay publication of its Initial Obligations Code, which was expected in the last few weeks, until after the judicial review process has taken place), and depending on the outcome of the review it’s very possible that the whole Act will have to go back to Parliament and, with our and others’ pressure, receive due consideration this time around.

But of course the good news couldn’t last for long, and today Communications Minister Ed Vaizey announced that the government will not support regulation in favour of net neutrality. This follows hot on the heels of an announcement to a similar effect from the European Commission.

Net neutrality is a complex issue that doesn’t lend itself to black-and-white judgments to the extent that aspects of the Digital Economy Act do. There are some people and organisations who are generally supportive of  Internet-based innovation but see light-touch regulation as doing more to promote it than enforcement of net neutrality principles. A good (if somewhat US-centric) overview of the fault lines on the issue can be found here.

We’re sympathetic with Ed Vaizey’s instinct to keep the government “out of the way” and not saddle ISPs with unnecessary regulation, but we think that in this case he’s got it wrong. Net neutrality is key to the vibrancy and growth of the Internet, and failing to preserve it puts digital innovation in Britain at risk. We think this for three reasons.

1.  It hurts small businesses. The great innovations in the digital economy come from startups and SMEs. Google, Facebook, Twitter and many others were tiny players when they first hit the market with what would become behaviour-changing, massively value-creating offerings. Indeed, one of the greatest features of the Internet is its capacity to tap entrepreneurial talent: industries where large amounts of capital are required to break in fail to take advantage of the brilliance, creativity and energy of outsiders with great ideas (when was the last time a clever university student started an oil company or began manufacturing commercial airplanes?), but the combination of decreasing costs of software development and near-universal access have meant that small, entrepreneurial ventures have flourished in the digital realm. The second of those factors is at risk in the absence of meaningful net neutrality protections, as it gives larger content providers the opportunity to get better access to users than their smaller competitors. That would be a loss for the smaller businesses, a loss for the consumers who would have benefited from new products but never had a full chance to try them and a loss for innovation in general.

2.  The issue is too technical for health warnings to be effective. Some of the harm from commercial traffic management by ISPs could be reduced if customers knew and understood that it was happening. That would give them a genuine opportunity to vote with their feet and purchase their Internet access from providers who don’t prioritise paid-for content, and that’s exactly what Ed Vaizey foresees happening. The problem is that the technicalities underlying traffic management are so complicated that no amount of warnings or labelling will really inform the customer about what the ISP is doing. All ISPs manage traffic at some level, if only to cope with strains on capacity or filter out viruses, and to try to require a meaningful explanation of what types of intervention the ISPs engage in and under what circumstances-and then to expect most customers to understand it-seems highly infeasible.

3.  It is antithetical to the principles behind the Internet. As an organisation that promotes the interests of small, tech-driven businesses, Coadec is distinctly not a part of the anarchy-rules camp that sees the Internet as a vehicle to eliminate principles of ownership. On the contrary, we like to see our supporters make money through their use of digital technologies, and a broadly capitalist framework is the best system in which for them to do so. But that doesn’t stop us from observing that the Internet is, at its core, both a marketplace and communications system, and a feature of both of those is that to work effectively they need relatively neutral intermediaries. If the management of a stock exchange regularly prioritised the securities of companies it liked, or a telephone system only put through calls of its longest-standing customers, the systems would quick disintegrate. Similarly, the Internet relies on ISPs that aren’t meant make a practice of inputting their own judgment into traffic flows. ISPs are supposed to be like the postman, delivering content without regard to its substance (this is actually an analogy ISPs use themselves when convenient, including in the context of the Digital Economy Act, but tend to forget when net neutrality is on the table). If the postman starts opening letters and delivering only those that he likes, that undercuts the effectiveness of the postal system; so if ISPs do the same thing, we have to expect that the integrity and utility of the Internet will be similarly jeopardised.

All that said, the solution to net neutrality doesn’t necessarily have to come from government, and there is plenty of scope for the commercial players to work together to adopt best practices. That was how film ratings in the US began, with MPAA agreeing to rate films itself rather than have the government do it.  But just as the movie houses and cinemas only agreed to the voluntary ratings system because the threat of government intervention loomed, so it’s unlikely that ISPs will do much to promote net neutrality if the government declares itself out of the game in the way that it did today.

Alongside our work on the Digital Economy Act and other issues, Coadec will fight going forward to persuade the government to reconsider its views on net neutrality. To do effectively, we need your support, so please sign up to our supporter’s list, follow us on Twitter (@Coadec) and encourage others who care about the digital economy to do the same.

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Posted in Digital Economy Act, Innovation, Net Neutrality

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