2017 – an Internet Industry look-ahead

By February 10, 2017UK

By Muirinn O’Neill, Consultant, London

2017 is once again set to be a big year for the internet industry with significant policy developments on the horizon. In the coming year, the Digital Economy Bill will become law; there will be changes to Ofcom’s General Conditions; and Government will be implementing their pledge to support the roll out of ‘full fibre’ networks. There will also be new Government funding for full-fibre broadband and changes to broadband advertising rules – all against a backdrop of Brexit and political instability.

 The 10Mbps USO

The Digital Economy Bill is currently making its way through the House of Commons and is set to bring in a number of changes which will have a wide ranging impact on the internet industry. Most notably, the Digital Economy Bill codifies into law the Universal Service Obligation for broadband, giving everyone in the UK the right to request a broadband connection, currently set at a speed of 10Mbps. Most of the actual detail of the Obligation is due to come from secondary legislation and at the end of last year Ofcom published their report on the design of the USO, which planted the ball firmly in the Government’s court, laying out three scenarios but offering no guidance on which they believed to be best. How the Obligation will be funded and the exact specification of the provision are still in the air, with Government set to consult again on the USO in the coming months.

The proposed ‘age verification system’

The Digital Economy Bill also delivers on the Conservative Party Manifesto commitment to ensure age verification on websites that provide pornographic content. Whilst not originally targeted at ISPs, the provisions have become hugely important as the Bill has progressed. The Bill will require commercial pornographic websites to age-verify, with sanctions for those who do not comply. Originally, Government had looked to solely sanction these websites by targeting their ancillary providers, and depriving the sites of revenue streams. However, during the course of the debate over the Bill, MPs began to push for ISP blocking as a back-stop for non-compliant websites and the Government introduced ISP blocking provisions.

This issue is still very much live, as the Bill progresses through the Lords. The detail of how this provision will be implemented is hugely important for many ISPs, and whilst Labour and the Lib Dems pushed Government during Lords Committee Stage for more detail around how the regulator will operate, Government have pushed back the detail on this to Report Stage.

Changes to Ofcom’s General Conditions

In general, the changes only reflect small amendments. However, Ofcom have recognised that the Conditions have failed in several key areas, including complaints handling. Ofcom are proposing a new code that contains:

  • Strengthened provisions on the transparency of the complaints process
  • The provision of information to consumers at different stages of the process
  • More effective signposting of access to ADR when complaints become deadlocked
  • Improved record-keeping and monitoring requirements for communications providers

Whilst broadband already has an extremely robust complaint handling system, recent consultations by Ofcom have implied that they believe the system needs an overhaul, thus they may look to go further in this area.

Government support for ‘full fibre’

In the Autumn Statement Government promised £1bn of new funding for digital infrastructure including £400m investment for a new Digital Infrastructure Investment Fund, at least matched by private finance, to invest in new fibre networks over the next 4 years. They also introduced a new 100% business rates relief for new full-fibre infrastructure for a 5 year period from 1 April 2017 and consulted on extending fibre networks this month. This represents a new direction in policy and is a huge opportunity for those rolling out their own fibre networks.