Inconsistent intervention
Globally, most NRAs are currently taking a wait-and-see approach. Some European regulators, including PTS in Sweden, CMT in Spain and Ofcom in the UK, have concluded that there is no need for specific ex-ante rules, believing that the current level of competition and tools available are sufficient to deal with any anti-competitive situations.
Other regulators have chosen to intervene, but the regulatory approach differs among these NRAs.
In a net neutrality report, Japanese regulator the MIC proposed the adoption of a principle whereby consumers were entitled to use IP-based networks flexibly and access the content and application layers freely. The Norwegian regulator NPT has taken a soft regulatory approach toward net neutrality, under which industry players have agreed to voluntarily endorse and comply with guidelines it published in 2009.
In contrast, the Italian government has proposed a bill under which network access must operate under neutral conditions with respect to content, services, applications and terminal equipment, with a penalty to be imposed if ISPs fail to comply.
Drawn out process
We expect this trend of diverse approaches to continue during 2010, with net neutrality hotly debated by most NRAs.
In January the FCC completed its consultation process, which attracted a flurry of comments from a range of interested parties. These comments highlight the disagreements about what the network neutrality framework should look like and show that the FCC has much to do to reconcile the different sides. Even with the FCC's strong approach, uncertainty remains for the time being.
A flexible approach and voluntary guidelines set in conjunction with the industry, as seen in Norway and Japan, might present a suitable interim strategy for most regulators considering intervention.
The wait-to-see approach is currently an appropriate choice for the majority of regulators. Firstly, there is little evidence of operators significantly breaching the rules of open internet. The existing regulations and/or self-regulation are enough to solve the problem in most cases. Secondly, if regulatory intervention is carried out too early and too strongly, this could have potential negative consequences, such as hampering investment and reducing innovation. In addition, regulatory intervention might disrupt the current market forces that are already keeping balance between the industry players.