BT is to create a service to cache popular (read: streaming video) content locally.
I have written in the book and elsewhere that 'positive' net neutrality should restrict itself to ensuring
[a] there is a big unrestricted Internet pipe to each home, as advertised, preferably with a 'minimum speed' guarantee;
[b] that those ISP-content agreements using a fast lane (what the FCC seems to call 'special access') are based on fair, reasonable and non-discriminatory (FRAND) terms.
FRAND has a long history in competition law and patent law, and is used where a wholesale input is an essential facility (amongst other things). Wholesale ISPs seem to fit that bill, at least in the UK where for most retail customers its BT or nothing.
Now that will make many people shout that local cacheing is NOT net neutrality - that's right, its not, even though Content Delivery Networks are not truly local, and therefore Google argues they don't breach the principle as long as they are offered on a FRAND basis. What matters to me is transparency, non-discrimination and a good and increasing basic service. It would be wonderful if bandwidth increased to make monthly caps and local cacheing irrelevant.
I recognize the potential permanence in the Content Connect service, that having succeeded in creating a new revenue stream and stopped ISP investment in further unbundling, BT Wholesale could then sit on its laurels and declare the bandwidth war over. That is where regulatory action will be required - Ofcom has sat on its bottom and declared that functional separation created incentives for investment long enough - it would then need to make arrangements to ensure long-term backhaul investment not based on current and anticipated needs and UK content players, but future needs which will be broader and more ubiquitous (it laughably calls VDSL 'super-fast broadband' when fibre roll-out is near non-existent).
Yes, it won't do that. That's why we need a more actively involved government - if it recognizes BT Wholesale is the only game in town, perhaps it might do something about it (NOT ignoring fibre to the premises while plugging its pension hole!).
Overall, the change to BT Content Connect should achieve one marvellous outcome - by stymying alternate investment in UK backhaul, it will show that we live in a monopolized environment in the UK. That will at least result in backsliding in global league tables and might eventually persuade government to do something. If not the nuclear option, its the option most likely to show that wholesale competition is dead.
So lets see the debate begin!