Net neutrality is holding service providers back from investing in their fibre networks, according to Chris Dedicoat, Cisco's president for Europe, the Middle East and Africa.

Speaking in a press Q&A session at Cisco Live Europe yesterday, Dedicoat called for a balanced set of regulations that will allow service providers to invest in broadband – particularly fibre optic networks – and provide differentiated services over that fibre.

Net neutrality is the principle that all web traffic should be treated equally. This means that telecoms companies cannot offer different rates to broadband consumers based on content or service type. However, there are no clear legal restrictions against these practices.

Dedicoat explained that, before investing in fibre, service providers have to demonstrate to their shareholders that they are able to deliver a return on that investment. However, net neutrality prevents them from delivering “differentiating services,” using traffic management tools to prioritise the delivery of some types of content over others.

“I think that there's components of net neutrality that work, but I think you've also got to allow service providers to make investment,” he said. “Broadband isn't DSL; broadband is fibre, and if we're going to be able to create more efficiency in health services, we need bandwidth from the home as well as bandwidth to the home.”

Net neutrality is a subject of hot debate around the world. Most telecoms operators say they should be free to develop new business models, free from any “restrictions” other than commercial agreements. However, content providers warn that web throttling could harm services, and create a two-tier Internet.

In November last year, the media regulator Ofcom said consumers should be kept fully informed about the ways broadband providers deal with online congestion. Ofcom noted that traffic management can be beneficial in some circumstances – for instance to protect safety-critical traffic – but service providers must not seek commercial gain.

“How ISPs control access to the internet affects us all and it is important that we are able to understand how our access might be restricted,” said Ofcom Chief Executive, Ed Richards. “Ofcom is now looking to the ISPs to ensure that transparent information is available, and will consider intervening if it does not see improvements.”  

Stakeholders in the United States are also grappling with the issue. The US Senate recently voted against a Republican measure that would have overturned net neutrality rules passed by the US Federal Communications Commission, which prohibit wired broadband providers from selectively slowing or blocking web content and applications.

Opponents of the bill argued the rules are needed to protect internet users and startups against discriminatory practices by a shrinking group of broadband providers.