The UK is set to overhaul electronic communications legislation and bring it up-to-date and in line with new European legislation – whatever happens on Brexit.
The UK is set to overhaul electronic communications legislation and bring it up-to-date and in line with new European legislation – whatever happens on Brexit. But the ink isn't dry. Network and service providers have plenty of opportunity to shape the UK's future policy, legislation and regulation and now is the time to start planning how…
The speed of change continues to accelerate, like runners on a treadmill, regulators are running faster to keep pace. This article provides just a snapshot of the future changes.
Following what seems like a marathon run by European institutions, new legislation including the Directive establishing a new European Electronic Communications Code (the Code) passed into law in December 2018.
Here in the UK, hot on the heels of their Future Telecoms Infrastructure Review, DCMS have published a consultation on their Statement of Strategic Priorities for telecommunications and the management of radio spectrum.
What does this mean for the UK's network and service providers?
These European and domestic measures are intimately linked, together setting the ground for new UK rules for an array of measures encouraging infrastructure investment in high speed data networks, ensuring efficient use of spectrum and protecting consumers, particularly the vulnerable.
EU member states have until end of December 2020 to transpose the new Code into national law. Whatever happens on Brexit, the UK Government has indicated its intention to appropriately implement it too.
DCMS' strategic priorities cover the Government's commitment to: (1) world-class digital infrastructure for the UK; (2) safeguarding telecommunications consumers, especially the vulnerable and disengaged; and (3) ensuring the UK's telecoms networks are resilient and secure.
Depending on Brexit, this may be achieved through secondary legislation, but we predict the Government will seize the opportunity to also deal with other unfinished digital business and introduce a new Communications Bill, especially if their strategic priorities are frustrated by existing restraints.
If Brexit triggers a general election and Labour win, we may also see a move to break up "data monopolies", by which Labour means the major digital platforms.
One of the main drivers for new regulation is society’s demand for greater and greater connectivity. Not only do we want to be able to send and receive larger and larger amounts of data faster and faster, but we also want to connect more and more devices.
Cloud computing, remote digital assistants and the Internet of Things are already here. Autonomous vehicles are on their way. More applications and uses will follow. To enable the ever increasing volume of data to move across our converging fixed and mobile networks quickly and securely requires the infrastructure to transmit and receive it and space on the radio spectrum across which it can flow.
The European Commission estimates that €500 billion of infrastructure investment – largely for fibre networks – will be required across Europe up to 2025 to meet our growing demand. And new 5G technologies will need newly freed-up spectrum to be auctioned off.
While previous regulation focused on ensuring consumers had access to good quality services at competitive prices – giving limited thought to ensuring long term investment in new networks and technologies – the Code and strategic priorities seek also encourage infrastructure investment.
It is not only regulators who struggle to keep up… as technology develops and changes, becoming more complex, some consumers are unable to engage and risk being left behind. Often these people are vulnerable, who end up paying more for simpler services.
To help us all engage, including vulnerable consumers, the Code introduces new measures to ensure we are provided with the right product and contract information, at the right time, so that we can easily understand what we are buying, navigate the market more efficiently, and make better decisions, for example, access to tools allowing comparison of quality, prices and tariffs based on a customer's own usage data. Consumers will be given easy methods to switch operators, and firms will have to provide compensation if a switch takes too long.
Where the market does not work well and some consumers suffer harm, regulators will be tasked with tackling poor industry practices and improving consumers' experience.
As engaged consumers share more and more data, over ever more connected devices, regulators will also be tasked with ensuring our data remains confidential and that the networks carrying our data are resilient, secure and always available.
And, as we move away from legacy copper-based public switched telephone networks, to new fibre and 5G high speed data networks, regulators will be tasked with ensuring those who only want a plain old telephone service do not suffer and will continue to have an equivalent service at a similar price.
The Code even provides for a new ‘reverse emergency call’ service from June 2022, requiring operators to be able to alert customers by text message about any imminent serious emergency or disaster.
Following Brexit the Government could go further than the Code requires, and use a Communications Bill to introduce measures controlling social media networks. For example, introducing regulatory measures to limit access to harmful content that promotes suicide or encourages gang or knife violence, or controls fake-news.
Contributing to the European goal of a true Digital Single Market, the Code aims to harmonise telecoms regulations across all member states.
Breaking down cross-border barriers could pave the way for national providers to become pan-Europe champions. Enabling unified services across Europe, supplied by a smaller number of larger operators. This could bring investment, efficiency and innovations gains, allowing the EU to better compete on the world stage. But this seems a distant prospect given the fragmented state of the European market, with ARPUs perhaps a third of those in the US.
As consolidation, may bring economic and consumer benefits, it is unlikely the UK Government will want to forgo this opportunity… no matter how distant. The challenge will be how to ensure UK champions succeed post Brexit.
As for the immediate future, the European rules set a new cap on the cost of intra-European calls and texts: from 15 May 2019, you’ll pay no more than €0.19 for a phone call and €0.06 for a text message wherever you are in the EU. If we have a disorderly Brexit, to protect UK telecoms companies from one-sided wholesale pricing regulation, the UK will not mandate its providers comply .
The so-called FAANGs – Facebook, Amazon, Apple, Netflix and Google – were merely a gleam in policy makers' and regulators' eyes back in 2002 when the existing European legislative framework for the telecoms industry was first established. As a result, they are widely regarded as having been able to benefit from legislation that was ill fitted to regulating digital platforms and the monetisation of data.
The big challenge now is working out what is an appropriate form of regulation. Do Labour's proposals on breaking up "data monopolies" represent the best way forward or can we entrust the new regulatory framework to be more focussed and precise in its regulatory interventions?
The Finance Bill later this year will seek to introduce a new 2% sales tax targeting search engines, social media platforms and online market places. Could a new Communications Bill be the vehicle the UK Government uses to rein the FAANGS in further?
Among other provisions, the Code will ensure that providers of personal communications services over the internet, such as Skype or WhatsApp, will be subject to rules similar to those that applied previously only to traditional telephony operators. For example, they will have to ensure that:
Could a new Communications Bill be the vehicle the UK Government uses to rein the FAANGS in further?
The pace of change in technology is accelerating, and the regulatory treadmill continues to spin, especially for the UK, as we move closer to exiting the EU. Now is the time to pull on your trainers and get running, before the ground rules for electronic communications is fixed for the next 5-10 years.
The broad principles may now have been established, but there is still plenty of scope to influence the detail during the current Statement of Strategic Priorities consultation (which closes on 27 March 2019) and the consultations that are bound to precede any UK Communications Bill. If your business is likely to be affected, now is the time to plan how to engage.
This publication is intended for general guidance and represents our understanding of the relevant law and practice as at February 2019. Specific advice should be sought for specific cases. For more information see our terms & conditions.