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Internet Censorship, 10Mbps USO and More – Digital Economy Act to Pass

Wednesday, April 26th, 2017 (4:55 pm) - Score 3,282
big ben, london uk parliament

The Digital Economy Bill 2017 has today effectively been approved by both houses of parliament, which means positive changes for UK broadband connectivity (10Mbps USO, compensation etc.). On the other hand the internet faces more censorship and a proposed 30Mbps USO was dropped.

The new legislation is not the first to share the ‘Digital Economy‘ title and indeed the previous attempt in 2010 was arguably much more controversial, not least due to its inclusion of significant broadband service restrictions for persistent Internet copyright infringement (thankfully that aspect never saw the light of day).

Similarly the new bill, which is now destined to become an Act after parliament all but approved it this afternoon as part of the “wash up” process prior to the imminent General Election on 8th June 2017, is another quirky mix of pros and cons but most of it has survived; partly due to a lack of effective opposition to some of the more contentious aspects (e.g. internet censorship).

The act covers a multitude of different areas, such as measures to help improve national broadband infrastructure and changes that will give Ofcom greater powers to collect extra information from ISPs and to then share that information with third-parties for the benefit of consumers (i.e. extra detail on local broadband speeds and coverage etc.). We’ve summarised the biggest changes below.

New Digital Economy Act 2017 Measures

* 10Mbps Universal Service Obligation (USO) for Broadband

The USO establishes a legally-binding minimum level of broadband service that the chosen suppliers must be able to deliver upon request (e.g. KCOM in Hull and BT across the rest of the UK). Previously the USO only supported a basic copper telephone line and very basic (dialup) Internet access, while the new USO requires a minimum download speed of at least 10Mbps to be delivered (well above nearly all other EU states).

Most of the new USO will be delivered via enhancements to existing fixed line technology (e.g. Long Reach VDSL / FTTC), although it’s possible that inferior Satellite technology could also play a role. The Government’s Broadband Delivery UK programme is expected to bring fixed line “superfast broadband” (24Mbps+) to 97% of the UK by 2020 and so the USO’s primary focus will be on tackling the final 3%.

The House of Lords had recently managed to vote through a much tougher 30Mbps USO (here), which could have cost up to £2bn to implement (the 10Mbps target had a lower price tag of up to £1.1bn) but as we predicted this has now been dropped (it’s unlikely that they could have delivered 30Mbps by the original 2020 target, particularly given the lack of ISP support and slow roll-out in rural areas).

However a new mechanism has been introduced that will allow the Government to raise the USO’s minimum speed beyond 10Mbps in the future, albeit only once 75% of households have upgraded to a “superfast broadband” service. The Government will now need to run a final public consultation on the design of the USO, when they will set out its final specifications and approach to funding.

* Internet Censorship

The law introduces new measures that are designed to protect children by preventing them from being able to access “adult content” online. Under this system the British Board of Film Classification (BBFC) will be given the power to force Internet Service Providers (ISP) into restricting access to adult sites (e.g. porn) that fail to put “tough age verification measures” in place.

However the UN has warned that this approach lacks “data sharing safeguards” and may damage the vital “right to privacy and the right to freedom of expression” (here), not to mention that anybody who wants to circumvent such censorship will still find it very easy to do so.

* Automatic Compensation for Broadband Faults

Ofcom are working alongside the Act to build a new system that will automatically compensate broadband customers for service faults that result in a total loss of service for longer than two full working days (here).

The new law supports this requirement, although the regulator still has the tricky job of designing a system that’s reliable (not all connection problems are the ISPs fault), compensates fairly and which doesn’t result in consumers facing a price hike in order to cover the extra costs involved with its implementation. The latter may be unavoidable.

* Measure to Tackle SPAM (Junk Marketing)

A new Direct Marketing Code (DMC) is being introduced that will make it easier to prosecute firms that breach the direct marketing rules. In theory this should make it easier to tackle SPAM by ending all the controversial issues with respect to Direct Marketing (e.g. whether there should be “opt-in” or “opt-out“), the meaning of “consent” in the context of marketing and so forth.

In reality this will probably end up being about as effective as previous measures against the Internet scourge (i.e. not effective at all). Most spammers don’t care about consent or the law and are notoriously difficult to stop or track down. Only a globally agreed and properly enforced law will begin to change this.

* 10 Years in Jail for Internet Piracy (Copyright Infringement)

The law also toughens the sentencing options for people who infringe copyright laws online, such as by introducing a 10 year jail sentence. The Government claims that they are not trying to impose prison sentences for minor infringements like P2P file sharing, although critics argue that the wording of the bill is open to interpretation and could be “exploited by unscrupulous companies” (here).

* Revised Electronic Communications Code (ECC)

The ECC rules have been revised in order to make it cheaper and easier for telecoms and broadband developers to both access and build on private land (e.g. rural farms), although this involves a “major change” to the way land is valued and that hasn’t gone down too well with private land owners (here).

However the new Code rights will only apply to contracts signed after the law has come into effect, and will not apply to existing contracts retrospectively, although transitional arrangements will be needed in some cases as old contracts expire. It’s possible that further work may be needed before all of the finer points of detail can be agreed.

* Powers to Limit Appeals Against New Regulation

It’s long been felt that big mobile and broadband providers have hampered pro-consumer measures by tying Ofcom up with long and costly legal challenges. As such the Government has been working to make it harder for such operators to object to the regulator’s decisions on mere technicalities, while also making the appeals process itself cheaper and shorter for everybody.

The change removes the requirement for appeals cases to be decided “on the merits“, instead requiring the Competition Appeal Tribunal (CAT) to apply the same principles as would be applied by a court on an application for judicial review. This would effectively ensure that the merits of the case are “duly taken into account“. The change will ensure that the requirements of Article 4(1) are met but not exceeded, while also ensuring that industry’s rights of appeal are protected.

Nevertheless big operators fear that such changes will also make it easier for Ofcom to implement measures that contain mistakes or incorrect assumptions.

* More Information Sharing

Ofcom has gained new powers that will allow them to collect or demand more information from broadband ISPs and mobile operators. This in turn could be used to help produce more useful information, such as greater address-level detail on local broadband speeds, service quality or internal statistics about consumer complaints. The regulator can use this to check whether providers are keeping to their promises.

The new act is ultimately just a legislative template and a number of the above changes will still require further consultation before the final details can be agreed. For example, Ofcom are still consulting on the final design of their new system for automatic compensation and the Government will also need to do one for the USO etc.

Matthew Hancock MP, Digital Minister, said:

“Lords amendment 1 [30Mbps USO and 2Gbps for all aspiration] challenges the Government to be more ambitious on universal digital connectivity. The universal service obligation forms part of our plan to deliver better connectivity, helping to ensure that everyone gets decent broadband and no one is left behind.

However, we have serious concerns about whether the amendment is deliverable. As drafted, it is counterproductive to the implementation of a USO, because of the risk of legal challenge and the delay that that would cause. We are legislating for the USO under the EU telecoms legislative framework, under which a USO is intended to ensure a baseline of services where a substantial majority has taken up the service but the market has not delivered, and where users are at risk of social exclusion.

According to Ofcom’s latest data, in 2016, take-up of ultrafast broadband with a download speed of 300 Megabits per second and higher was less than 0.1%, so we are nowhere near being able to demonstrate that the majority of the population have access to full fibre with a download speed of 2 Gigabits per second. We therefore cannot accept Lords amendment 1, and we are not in a position of a substantial majority having taken up superfast broadband.

I do, however, support the ambition of better, faster, more reliable broadband, so the Government propose an amendment in lieu that requires any broadband USO to set a download speed of at least 10 megabits per second, and requires the Government to direct Ofcom to review the minimum download speed in the broadband USO once superfast take-up is 75%. That gives the assurance that any USO speed will be reconsidered once a substantial majority of subscribers are on superfast.”

The Act also includes some other recent changes, such as one that will work to maintain the Crown Guarantee for members of BT’s Pension Scheme (BTPS) as part of Openreach’s “legal separation” from the main group (here).

Admittedly some will say that this legislation has been rushed and that’s certainly true for some elements, such as the more aggressive Internet censorship changes that were shoehorned into the bill and with hardly any prior debate. However many of the other aspects, such as the USO, have had a lot of time for debate.

We should point out that the bill also covers various other areas, such as new rules for regulating Dynamic Spectrum Access (DSA) to support technologies like “white space” wireless broadband, improvements to the mobile switching process and new powers to financially punish mobile network operators if they fail to deliver on a coverage obligation; among other things.

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Mark Jackson
By Mark Jackson
Mark is a professional technology writer, IT consultant and computer engineer from Dorset (England), he is also the founder of ISPreview since 1999 and enjoys analysing the latest telecoms and broadband developments. Find me on Twitter, , Facebook and Linkedin.
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32 Responses
  1. MikeW

    Interesting provision to reconsider the USO speed when we have 75% takeup of superfast speeds.

    It nearly sets the idea that the USO speed ought to be somewhere around the 75th percentile of actual speeds.

    Right now, the actual 75th percentile is … 9Mbps.

  2. Billy

    So when the 10Mbps USO finally arrives, will I :-
    (a)get 10Mbps for the same price as I’m paying now for 3Mbps?
    (b)still be able to have 3Mbps or will upgrading to 10Mbps be compulsory?
    (c)be compelled to pay extra for something I see no value in?

    My irc won’t benefit from a speed increase, neither will my email. My surfing habits may change when I’m not actively avoiding bloated websites, but I’ll be buggered if I want to pay more to see flashing adverts in full HD.

    I remember the days when ‘hello’ required 5 bytes, and then someone decided that ‘hello’ had to be a 50kb gif; and now ‘hello’ has to be in 4k hd @ 60fps. Using bandwidth just for the sake of it is not something I subscribe to.

    Or maybe I’m just a moaning old bugger.

    • JustAnotherFileServer

      The point of the 10Mbps USO is so that it’s the minimum speed provided.

      If you don’t like ads then you could always use ad blocking software.

      The USO is mainly for people who would like to get into the 21st century with the internet, but can’t.

    • MikeW

      I disagree with @JAFS. At least I think I do.

      The existence of a 10Mbps USO means someone has to supply that service if you choose to order it, but it doesn’t force you to have to order it, and it doesn’t force every service to have to live up to that level. Whoever offers USO will have to make it available at an “affordable” level, but there’s no guarantee that it will be the same as your current service.

      Companies offering a USO-compliant service will still have to compete with exchange-based ADSL and ADSL2+ services that offer lesser service levels.

      Stay with your current service if you’re happy. Until they stop providing it…

    • JustAnotherFileServer

      @MikeW I think you’ve got a bit confused what the USO is and for. I will give an example of what it is and what it’s for.

      Example: If you live in a rural area and you want to get broadband, but only dialup is available. The USO would mean that the internet provider would have to provide an internet connection at a minimum of 10Mbps.

      I hope that makes it clear for you.

    • MikeW

      No, it doesn’t mean that.

      It means you have the right to ask for a USO-matching service if you want it (though from whom is an undefined point as yet) and are willing to pay for it, which might involve you paying ECCs.

      But it doesn’t stop a provider from offering a lesser service, and letting you choose that if you wish.

      The USO adds a new choice, possibly at a cost. It doesn’t take the old choices away.

      Hope you enjoy this clarification.

    • You’re both right, although the actual detail won’t be set in stone until the Government’s final public consultation.

    • Steve Jones

      A USO means that somebody will be legally obliged to provide a service to that minimum lvel if it is ordered but, almost certainly subject to caveats. One might well be a cost cap (as there is for a voice line) and it would be subject to extra charges to the customer to cover any difference. It may well be that the cost surcharge is such that for a few premises it will never be viable (as is the case with voice lines to very remote properties).

      There is another issue, and that is, precisely who will be charged with the legal responsibility for the USO. For MPF/LLU lines (in all but the area covered by KCOM) it’s BT in the form of Openreach. They are expected to deliver a line (up to the cost cap) and cover the cost through cross-subsidisation from cheaper to service areas. That could be done, as when BT was sold off, it was complete with a near-universal copper network. That obligation remains.

      Broadband is rather different. Whilst the copper network existed, there was no “deep” universal fibre network, and that which has been installed (BDUK subsidised apart) was implemented using a purely commercial model with a very high proportion of that coverage area running into direct competition from VM (and a smattering of altnets). There really isn’t some great pool of excess profit that can justify forcing BT to install fibre to relatively remote properties (and there will be even less if/when Ofcom impose price controls on FTTC). In any event, provision of fibre to remote premises will bust any sensible price cap, so would be meaningless.

      BT have offered to cover the 10mbps USO, but only really on their own terms. That is using LR-VDSL which essentially means throwing ADSL (BT & LLU) off those cabinets. However, such an approach to a USO will still leave a small, but significant minority of premises which can only reasonably be served by fibre save a few where fixed wireless might work. Those will breach the cost cap.

      The alternative would be for the USO to be fulfilled by some for of public body which would be subsidised using either public money or money raised from levies on operators. That body would then commission solutions from commercial or, maybe, voluntary bodies.

      The USO would not, of course, fall on the great majority of service providers who would be in no position to cross-subsidise services. In practice, the only potential candidate is BT – every other provider will keep their head down.

      So the unanswered questions are – the BT proposal apart (which really can’t be pushed past 10mbps on technical grounds for the more remote due to technical limitations) – who will have to meet the USO, who will pay for the meeting of it, and what will be the limitations. Without those being dealt with, then nothing much will happen.

    • wireless pacman

      You are missing one very important point here Steve and that is that the politicians most likely won’t understand a word of the excellent points you have made – and will care even less! 🙂

    • MikeW

      All valid points, Steve.

      They weren’t intended to be answered by this particular bit of legislation, though. They have been handed off to Ofcom, for them to try to create some meaningful pseudo-market for USO services.

      As you predicted, no provider has shown any willingness to be part of that marketplace apart from BT … but perhaps that is because BT announced that they are willing to do it FoC, subject to the odd condition.

      Presumably anyone who was minded to take part in providing a USO can predict that Ofcom will give way on those conditions.

      The question – for the Ofcom study, not this legislation – is whether Ofcom chooses to cave in and accept BT’s offer, or whether they choose to force competition into the a USO marketplace even when no competition looks likely.

      When Ed Vaizey was in charge, I would have predicted that BT’s offer was accepted.

      With Matt Hancock in charge, I would predict the opposite – as he subscribes to the “competition solves everything” school of thought.

      Who will be in charge in 2 months? Which direction will Ofcom head? Tune in to the next episode of SOAP!

    • Billy

      So I’ll take that as a maybe.

  3. mark

    Where to begin with age verification, first all it will do is help 2 new kinds of criminal, 1st being pirates who already don’t care about the law and will find new ways to stop there site being bocked, 2nd it will be a gold mine for fraudsters to set up a fake site to get your security information, and smaller sites who do comply won’t be trusted as a result. The wrose wing is the UK is not the only country thinking about this

    http://m.xbiz.com/news_piece.php?id=218246

  4. Dave

    So does this mean with the USO after 2020 I still will not be able to get a usable broadband band service at affordable price. (Satellite is not affordable broadband and is a different type of service)

    • NGA for all

      Dave, This originated as a political goal, so the 10Mbps will be blagged by any means possible, including satellite, fixed wireless, mobile broadband, and in the circumstances that is all that is likely to happen, as Ofcom are passed the parcel to implement.

      What might be better after £1.7bn of subsidies being made available for a fibre build is to establish the right of reasonable request for a direct fibre service, using the Capital Defferral owed, and the underspends and capital balances held by LA to progress a deeper fibre rollout.

      The limitations of 10Mbps is like the limitations of 2Mbps, it accepts the attenuation limits of copper, when BDUK/BT are now proving they can deliver fibre access deep into Gwynedd, Cumbria, Herefordshire with the budgets to do much more if the will is present.

      This 10Mbps USO at this time looks a hindrance to a process that can go much further. Better I think is establishing the basis of a reasonable request for direct fibre access and build that into the current WLA consultations while BBUK/BT development FoD2.

  5. dragoneast

    It’s amazing the way the UK runs as far as it can away from ID cards which are, in its opinion, an unacceptable infringement of liberty; but will adopt any other means of control, however intrusive, convoluted, expensive or ineffective, and then spread it around like confetti!

    Just as the legislators carry on trying to catch up with their own shadows. Fortunately the real world is (usually more than) one step ahead.

  6. Chris

    How on earth is the censorship supposed to work? As somebody with only a passing interest in adult sites I don’t care about that aspect. What I care about is the potential for misuse of data and fraudulent activities that could result. Could this be Ashley Madisson all over again? Anyway, many people will use VPNs and proxies, kids in particular are resourceful.

    BM

  7. h42422

    Rejecting 30Mbps was probably the right call. Initially I thought otherwise but have been doing some rethinking.

    Definitely 10Mbps is not good enough for 2020. However, most of those suffering below 10Mbps speeds are either long rural lines or urban EO lines. For rural locations, 30Mbps would probably have been better as it would have in practice removed satellite from options.

    For urban EO lines, there is much hope after this. There is no technology that would allow upgrading of a 2Mbps EO line to a just about 10Mbps line. Instead, they will have to do either network rearrangement and provide a cabinet or do FTTP/FTTB. Any of these options will in practice provide much more than 10Mbps.

    Had USO become 30Mbps, they would have had lots and lots of long FTTC lines that could be upgraded with cheaper technologies, (LR-VDSL, maybe others) without laying an inch of new cable. They would have just prioritised these low hanging fruits and started the work from there, leaving those suffering from slowest speeds now to wait years and years more. No one could argue OR is doing the wrong thing as they would be busy working towards the goal.

    In my opinion, priority now should be in 1-2 Mbps lines instead of 24 Mpbs lines. Eventually these need to be upgraded as well, but I think those of us with the lowest speeds have suffered long enough, and those with 20-30Mbps lines can now wait a couple of years instead before becoming a priority.

  8. Dave

    I am totally confused. What’s the point of the USO if satellite is a option!

    • NGA for all

      When a political party dreams up a headline around a budget statement, then it gets converted into something that can be kicked into touch. The USO in this form is one of those, but it can become a hindrance as someone can say problem solved.

      It is like Parliament calling for the breakup of BT when they get frustrated with the lack of transparency around the BDUK contracts. They get Ofcom doing something which does not materially change the incentives to invest, while Ofcom and Parliament then avoid looking at explaining why BT promise of £2.5bn investment is now £1.5bn – see annex 8 assessment of BT’s fair bet -WLA consultation, and how subsidy was switched from rural to urban… perhaps temporarily if the gap funding principle is applied and clawback is brought forward early.

      These are not good episodes for those advocating UK Parliamentary control, as it shows Parliament does not have the appetite or time for detail to get control.

    • Bob

      If “usable” broadband is really a modern day necessity then people on slow broadband will jump at the chance for satellite. The starving man doesn’t turn down a bowl of porridge because he’d rather have a fry up.

      Of course, 10mbps is not really a necessity. The fact that nearly a quarter of the population don’t even want a broadband service of any kind is evidence of that.

      There’s no real viable use case for residential broadband *needing* to be more than 10mbps anyway. You can’t tell me multiple streaming 4k video is an essential. In fact video streaming of any kind is not an essential. There are those of course that would “like” to have fast broadband in lieu of proper parenting. There are those that would *like* run a business on the cheap, or to download multiple parallel torrents, etc etc… none of these are essentials.

      The acid test question to anyone complaining they are on slow broadband, and that it is absolutely essential to them, is why do they not move house?

    • GNewton

      @Bob: You haven’t fully developed your point. Neither gas, nor electricity, nor voice telephony are needed, most people used to get by just fine without them in the past centuries.

  9. Tom Bartlett

    Bob, you say we don’t need 10Mbps, then go on to say there’s no viable case for more than 10. Make your mind up!

    Moving house isn’t such a bad idea though since its probably going to take a decade to get LR-VDSL up and running, whilst the house devalues due to it’s lack of connectivity.

    Maybe we can sell our houses to the quarter of the population that doesn’t want broadband?

    • Bob

      Tom, I have made my mind up. Broadband should not be legally considered a universal service, because clearly it is not essential. 25% of the population survive perfectly well without broadband. However, I do not believe anything more than 10 is *needed* and there is no use case to demonstrate that need. It is a subtle difference, so you may not have caught it first time around.

      It is curious how the human mind works, though. I assume you moved in to your house and you were terribly happy with the situation you had at that point with little or no connectivity. You must have been otherwise you wouldn’t have moved there. You are now pr unhappy, not because your situation has deteriorated (I assume), but because other people have something you don’t have, that you now feel you must have.

    • MikeW

      You might want to rethink that 25%…

      Ofcom’s CMR report reckoned that households with fixed broadband had gone from 78% to 79%, 2015 to 2016.

      However, they also reckoned that 86% of all adults had internet access at home, and there was only 10% who didn’t expect to get access this year.

      The number surviving without internet access is ever dwindling.

    • dragoneast

      I’d suggest the number of us who would survive without broadband is rather higher than 25%? It’s those that wouldn’t that are the problem, perhaps? Until recently, apparently, adaptability was always the key to survival; for all the animal kingdom. Broadband might well be nice to have, at least for the time being; it’s not the same as essential. I deal with a fair number of people across the world, and I’m always surprised at how often their available broadband speeds runs in direct inverse proportion to their ability and utility.

      But of course if all we want out of life is bragging rights . . . just a shame when we miss out on everything else in life. But, of course, for the inhabitants of this site there is nothing else in life!!!

    • Tom Bartlett

      How can someone brag about 10Mpbs?

    • dragoneast

      I had a 10Mbps service a couple of years ago. And was surprised how much I could do with it. (I’ve had friends too who were proud of their 2Mbps service). We’re all doing rather better these days, but not least we are helped by having learned how to make the best use of our connections when they were more limited. Beauty, as always, is in the eye of the beholder. Top speed isn’t everything, no more than in any other aspect of life. As most of us, anyway, learn when we grow up.

    • MikeW

      Nothing since has felt quite like the freedom of that first 2Mbps link.

    • Tom Bartlett

      So you guys are all faster than 10? What a surprise!

    • MikeW

      What are the odds of that, eh?

      Oh, I know … nearly 97%.

      We certainly shouldn’t forget the remainder, but websites like this aren’t just populated by the people who haven’t yet reached 10Mbps.

  10. fastman

    NGA — more disinformation — They get Ofcom doing something which does not materially change the incentives to invest, while Ofcom and Parliament then avoid looking at explaining why BT promise of £2.5bn investment is now £1.5bn – see annex 8 assessment of BT’s fair bet -WLA consultation — just you cant see the other 1m doesn’t mean its not there or been spent

    you don’t see electicity but I wouldn’t suggest jumping on the 3rd rail !!!! ti see if its live

  11. MikeW

    It looks like the bill has received royal assent now.

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