How Competition Drives Discrimination: An Analysis of Broadband Traffic Management in the UK

30 Pages Posted: 2 Apr 2013 Last revised: 9 Aug 2013

See all articles by Alissa Cooper

Alissa Cooper

University of Oxford - Oxford Internet Institute

Date Written: August 2013

Abstract

As global broadband Internet adoption has expanded, few telecommunications policy issues have been as contentious as that of net neutrality. The debate has concerned itself with a number of broadband Internet service provider (ISP) behaviors, including discriminatory traffic management – differential treatment of network traffic associated with different Internet applications for the purpose of managing the performance of the network. One of the central questions in both policy and academic debates concerns the extent to which competition between network operators serves to deter discriminatory behavior, including discriminatory traffic management.

The fixed-line broadband market in the United Kingdom provides a rich case study for understanding the relationship between competition and network discrimination because it has seen both widespread discriminatory traffic management and intense competition. In recent years, more than 75% of UK residential lines have been subject to some form of discriminatory traffic management, most often rate limits on peer-to-peer applications. At the same time, Britain has enjoyed one of the most competitive broadband markets in Europe, with the majority of households served by at least four wholesale broadband providers and dozens of retail providers.

This paper explains the empirical findings of a qualitative traffic management study covering the UK fixed-line broadband market from the mid-2000s to 2011. The study is based on 33 elite interviews with engineering and policy executives from the country’s largest ISPs, the telecommunications regulator (Ofcom), and the government; participant observation of a traffic management research team within a large ISP; and documentary analysis of public materials written by a variety of stakeholders.

The study finds that the UK’s wholesale market structure for DSL, the intense effects of competition, and a regulatory culture of permissibility combined to foster a British broadband landscape in which discriminatory traffic management became pervasive. The nature of peer-to-peer and other high-volume applications provided incentives for DSL operators to limit those applications during the early years of broadband adoption, while early experiences with complex application-specific management on cable networks inspired cable operators’ preferences for simpler application-agnostic solutions. Over time, competitive pressure, a low risk of backlash from customers, and Ofcom’s insistence on both the market’s disciplining power and the necessity of peer-to-peer management firmly ingrained discriminatory traffic management as an acceptable practice industry-wide. As a result, both DSL and cable operators toward the end of the decade rationalized its adoption and extended its use in new ways. The key exception was the DSL operator and television giant Sky, which used lack of traffic management as a product differentiator and found other ways to pay for the costs associated with its customers’ unfettered traffic demand. Overall, rather than serving as a deterrent, competition inspired the adoption and expansion of discriminatory traffic management in the UK.

Keywords: net neutrality, traffic management, competition

Suggested Citation

Cooper, Alissa, How Competition Drives Discrimination: An Analysis of Broadband Traffic Management in the UK (August 2013). TPRC 41: The 41st Research Conference on Communication, Information and Internet Policy. Available at SSRN: https://ssrn.com/abstract=2241562 or http://dx.doi.org/10.2139/ssrn.2241562

Alissa Cooper (Contact Author)

University of Oxford - Oxford Internet Institute ( email )

1 St. Giles
University of Oxford
Oxford OX1 3PG Oxfordshire, Oxfordshire OX1 3JS
United Kingdom

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