Huawei Ultra Broadband Forum 2018

Poll: Net Neutrality Rules Unlikely to Deter Investors

Operators regularly trot out the line that legislation on net neutrality -- preventing them from charging OTT players for a premium service -- will hinder their ability to invest in higher speed networks. It sounds like a veiled threat to withhold spending on infrastructure deemed critical to the digital economy, but it may lack teeth, judging by a recent poll of the Light Reading community. (See Would Net Neutrality Curb FTTX Investments?)

Nearly 80% of poll respondents have serious doubts that regulatory enforcement of net neutrality really will curb fiber investments. As far as 29% of them are concerned, operators are just making empty threats and have continued to fund the rollout of more advanced technologies despite all their complaints about adverse regulatory measures.

Another 49%, meanwhile, believe that while legislation might have some impact, operators will probably not risk making cuts to infrastructure spending with rivals nipping at their heels.

No doubt, a number of these respondents have noticed what’s going on in Germany. Even though European legislators and Germany's Federal Ministry of Economics are in the process of developing net neutrality rules, incumbent Deutsche Telekom has been increasing its capital expenditure on high-speed broadband networks. Last quarter, its overall spending in Germany rose by 58%, to more than €1 billion (US$1.25 billion), compared with the same period last year, and Deutsche Telekom plans to spend even more on broadband rollout in 2015 than it does this year.

Regulatory authorities can probably assume that Deutsche Telekom will not renege on its promises to investors. It has already lost market share to Germany's cable operators during the past couple of years, and now faces a resurgent Vodafone, which is keen to advance in the broadband sector following its €7.7 billion takeover of Kabel Deutschland, the country's leading cable operator, in October last year. (See Vodafone Sets High Speeds, 4K for Germany .)

Nevertheless, not everyone is convinced that forthcoming net neutrality legislation will fail to crimp broadband spending. For 11% of respondents, the form that legislation takes is the critical factor. Preventing operators from blocking certain types of internet service may be all very well, but forbidding them from forming 'privileged access' partnerships with OTT players is a step too far, according to these voters.

The remaining 11% of respondents still believe that operators should have full control over their networks, and be free to block and throttle OTT services as they see fit. These days, it's hard to find a telecoms executive who will give public voice to such an extreme opinion, but there are clearly parts of the industry that continue to view the OTT community with deep suspicion.

— Iain Morris, Site Editor, Ultra-Broadband

iainmorris 10/9/2014 | 9:47:26 AM
Forthcoming legislation The other issue, of course, is what impact forthcoming legislation might have on the deals that have been taking shape between operators and OTT players. Orange is reportedly charging Netflix in France, which is exactly the sort of thing that has angered the net neutrality proponents in the past.
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