Virgin Media O2 calls for net neutrality reform to prioritize AI traffic

Network slicing and traffic prioritization are technically viable but legally constrained, limiting the commercial potential of 5G standalone networks. If Virgin Media O2 succeeds, it would mark a shift toward a multi-tier internet model where ISPs can monetize premium delivery for high-bandwidth AI and streaming services. For the broader ecosystem, this could lower latency for real-time video and cloud gaming but risks creating "fast lanes" that favor deep-pocketed services. Watch for the U.K. government's Mobile Market Review response, which will signal if regulators are willing to deviate further from historical open internet principles to spur infrastructure spending.

The push by Virgin Media O2 aligns with a broader European movement to recalibrate network regulations. In January 2026, the European Commission unveiled the Digital Networks Act (DNA), which aims to harmonize connectivity rules across the bloc. While the DNA maintains basic net neutrality, it introduces mechanisms to clarify rules for innovative services and increase legal certainty for traffic efficiency and IP interconnection (per European Commission, January 2026). However, the proposal has faced criticism from digital rights groups like epicenter.works, who argue that removing key legal recitals could dismantle nearly a decade of open internet protections and enable paid prioritization (per EDRi, February 2026).

Within the U.K., regulator Ofcom has already begun relaxing constraints. In October 2023, Ofcom revised its guidance to provide ISPs with more operational flexibility for managing high-volume traffic and emerging services like virtual reality. By March 2026, the U.K. government extended its 5G Innovation Regions program to further explore advanced wireless use cases in transport and manufacturing, totaling over £10 million in additional funding (per DSIT, May 2026). Parallel research from the GSMA in May 2026 indicates that Europe faces a €205 billion investment gap to meet its 2035 connectivity targets, with roughly €28 billion specifically needed to support AI-based innovation, further fueling arguments for pro-investment regulatory shifts.

Critiques of these shifts persist among consumer advocates. Following the release of the Virgin Media O2 study in July 2026, analysts at Broadband Genie warned that such deregulation could result in a "two-tier internet" where service providers act as gatekeepers, potentially disadvantaging smaller businesses that cannot afford to pay for prioritized access (per TelecomTV, July 2026). These debates come as U.K. mobile operators continue substantial infrastructure work, including the planned summer 2029 sunsetting of 2G networks to redeploy spectrum for 5G services (per Broadband TV News, July 2026).