The EU And Telecoms (Part 2)

Following from part 1 we continue with part 2 where we explore more fully EU telecoms regulations and its current situation especially regarding Flexcit.

As happens in other areas of EU competence, laid down by the treaties, member states must adhere to the telecommunications chapter of the EU acquis and are bound together by network governance and by harmonisation measures as a consequence. These span shared policies and legislation, implementation and regulation, standards and the accreditation of qualifications.

It’s interesting that what is often overlooked is the EU is a project not yet finished. It currently remains a work in progress following the engrenage (gearing) principle the well established method to engineer another leap forward in integration, the slow, salami-slicing approach adopted by Jean Monnet.

This principle has the consequence that while it continues a process of hollowing out member states competences and trying to move them up to EU level that there often occurs a period of absence of any competence at all. In this we are reminded of Booker’s comment on a criticism of evolution:

Years ago…Attenborough himself [claimed] to ‘prove’ Darwin’s theory by showing us a mouse and a bat, explaining how one evolved into the other. He seemed oblivious to the obvious point that, as the mouse’s forelegs evolved by minute variations to wings, there must have been a long period when the creature, no longer with properly functioning legs but as yet unable to fly, was much less ‘adapted to survive’ than it had been before.

For the regulation of network industries there have been delegations of powers by governments of the member states to EU institutions, notably to the European Commission (EC), but also to their own domestic National Regulatory Authorities (NRAs). This was somewhat ad hoc and piecemeal in the 1980s and 1990s, however from the 1999 Electronic Communications Services review (COM(1999) 539 final, 10.11.1999) the intentions and the outcomes increasingly concentrated on a more systematic approach.

Yet there continues to be considerable variations between member states which the European Commission and the European Parliament sought to reduce the disorder and to complete the single market for telecommunications.

As we previously noted the UK regulator Ofcom – determined to breakup BT’s monopoly further – used competition law powers under the Enterprise Act 2002 – itself a result of EU Directives – to come to an agreement with BT over a separate network access division called Openreach which would offer its wholesale products on an equivalent basis to both external customers and itself.

The establishment of Openreach and its relationship to external customers at the time was unique to the UK within the EU and its experience was studied by regulators in other European countries who experienced similar competition problems arising from the presence of a large incumbent telecommunications operator, such as France Telecom.

Viviane Reding, the European Commissioner who in 2006 was in charge of telecommunications regulation, took inspiration from the UK in forcing the “structural separation” of incumbent telecom operators into service and infrastructure divisions across the European Union.

With this in mind Reding unveiled proposals aimed at not only extending competition among telecom operators, but also the the idea of one single EU wide telecom regulator, to act as an umbrella organization for Member States’ national regulators. Reding’s proposals became the “review of EU Telecom rules: Strengthening Competition and Completing the Internal Market” which argued that:

“The most effective way to achieve a real level playing field for telecom operators across the EU would of course be to create an independent European telecom regulator that would work together with national regulators in a system, similar to the European System of Central Banks. In such a system, national regulators would continue to act as direct contact points with operators and could directly analyse the market. At the same time, a light European agency, independent from the Commission and from national governments, could ensure by guidelines and, if necessary, instructions that EU rules are applied consistently in all Member States.”

Here Reding sought to achieve “a real level playing field” by tackling what she called the three issues; Firstly the need for more internal market integration for a more effective use of radio spectrum. Falling back on the traditional EEC/EU arguments of fish, pollution or ‘climate change’ which knows no country boundaries as a reason for extending EU competences Reding relies on this regarding spectrum:

Radio spectrum itself knows no borders, but it is managed at national level, normally in an administrative, bureaucratic way that creates scarcity by prescribing in detail what every part of the spectrum may be used for in that Member State.

I also believe that we need to put the idea of a European spectrum agency on the table…we have to recognise the competitive disadvantage the EU faces because, instead of having one single regime for spectrum management and spectrum licensing, as they do in the US, we have 25 different ones.

Reding also argued that with the “switch from analogue to digital TV there is a one off opportunity to re-use the analogue frequencies for new technologies”. The second issue she addressed was better regulation:

“…a more consistent application of the EU telecom rules”. In the telecom sector, where neither technology nor economic interest nor consumer behaviour know national borders any more, I see a clear, long overdue need to make the internal market a reality also in regulatory terms”.

The third proposal was that there should be no “regulatory holidays” in the face of technological advances and with the liberalisation of the telecoms market should come “structural separation”:

Structural separation means that telecom regulators could require a dominant operator to provide non-discriminatory access to all operators by separating infrastructure provision from service provision to a greater or lesser extent. Today, the EU rules in force do not foresee structural separation as a regulatory remedy on the telecom markets. But I see that the United Kingdom, which has opted for a form of structural separation at national level, has made good experiences with this remedy. 

Her legislative proposal was for a European Electronic Communications Market Authority (EECMA) in which the EC sought a formal cooperation structure to remedy the lack of coherence within the internal market, which included “a fragmentation of European markets” and the absence of mechanisms for authorising cross-border services (e.g., mobile and IP-based services).

This proposal was significantly reshaped by the Parliament (which increased its own influence as a consequence) and the Council and, via Regulation (EC) No 1211/2009, became the Body of European Regulators of Electronic Communications (BEREC):

The main objective of this body is to enhance cooperation among national regulatory authorities (NRAs) and to strengthen the internal market in electronic communications networks.

BEREC consists of NRAs members where each is nominated per Member State. (NRAs from the European Economic Area (EEA) States only have observer status and are represented “at an appropriate level”). Thus BEREC consolidated the “official” status of NRAs despite having no democratic credentials.

BEREC itself conducts its business in secret and it attempts to justify this by claiming that there is often a special requirement to avoid public scrutiny and stakeholder involvement. We can see this secrecy, or ‘independence’ officially laid out under Regulation (EC) No 1211/2009 Article 4: Composition and organisation of BEREC:

The members of the Board of Regulators shall neither seek nor accept any instruction from any government, from the Commission, or from any other public or private entity.

In addition, there is a lack of clarity whether its decisions and opinions can be challenged in the EU courts alongside that it is unaccountable before the EU parliament, giving it a democratic and judicial deficit. Even the mechanism for engagement with BEREC is through consultations on terms determined by the organisation itself.

Aside from BEREC, further complications in European telecoms governance arise from earlier attempts at European harmonisation mechanisms via European Regulatory Networks (ERNs).

ERNs were established particularly with network sectors in mind; designed to respond to the multiplication of regulators and their uneven development. ERNs were an attempt to address by the need for greater co-ordination in implementing  regulation by member states. 

However within the institutional design of ERNs lies their genesis. Their design reflects acutely the difficultly of trying to move from national governance to one of supranational governance. Having been given grandiose tasks, the European Commission and national governments still maintained many powers. Here then we see the creation of double delegation, with powers “delegated up” from the NRAs and “delegated” down from the EU with the inevitable result of dissatisfaction:

The EU’s ‘double delegation’ to IRAs and the EU Commission has led to major and as yet unresolved problems of coordination and implementation.

Thus this means that ERNs can be seen as a ‘second best’ method of dealing with implementation of EU regulation; a compromise between EU ‘colleagues’ pressing for greater European integration and those member states, especially national governments, reluctant to endorse it fully. The compromise inevitably means that while more uniform regulation by coordinating approaches and functions was the intention, there has been little evidence of success in harmonisation and no attempts even to measure the effectiveness of the measures.

But within ERNs remains legacy EU regulatory telecoms governance that sits alongside and is distinct from BEREC, and this is apparent in the various EU bodies such as the Radio Spectrum Committee (RSC);

The Radio Spectrum Committee (RSC) is responsible for specific technical measures required to implement the broader Radio Spectrum Policy. The RSC is composed of Member State representatives and chaired by the European Commission.

Established by the 2002 Radio Spectrum Decision (676/2002/EC), the Radio Spectrum Committee (RSC) is assisting the Commission for the development of technical implementing decisions to ensure harmonised conditions across Europe for the availability and efficient use of radio spectrum.

…and the Radio Spectrum Policy Group (RSPG) which enables Member States, the Commission and stakeholders to coordinate the use of radio spectrum.

Here we can see that unlike the secret nature of BEREC, bodies such as the RSC and the RSPG within ERNs involve extensive consultation amongst all stakeholders, which include “regulatory authorities and the ministries having responsibility for radio spectrum related matters in each Member State”, manufacturers, network operators and users.

RSC and RSPG are also part of the comitology process which allows the Commission to discuss its proposals with national administrations before implementation in order to ensure that any measure is optimised to the various national situations. Thus under these rules the following associations are permitted to be consulted:

Consumers:
The European Consumer Organisation (BEUC) – which brings together 40 European consumer organisations from 31 countries (EU, EEA and applicant countries). 

International Telecommunications Users Group INTUG – an international association of business users of telecommunication.

Operators:
European Communities Trade Mark Association ECTA – which in addition to having close links with the European Commission and the Office for Harmonization in the Internal Market (Trade Marks and Designs) (OHIM), ECTA is recognised by WIPO as a non-Government Organisation (NGO).

European Telecommunications Network Operators’ Association  ETNO – who are pan-European operators and has been the voice of Europe’s telecommunications network operators since 1992

GSM Association GSMA– is an association of mobile operators and related companies devoted to supporting the standardising, deployment and promotion of the GSM mobile telephone system.

Manufacturers:
Digital Europe

We can see therefore that even under EU telecoms governance and the comitology process there is extensive consultation with international associations. A further example can be seen with the European Conference on Posts and Telecoms (CEPT). CEPT extends far beyond the EU, including the countries of the former USSR and currently includes 48 countries in its membership.

And it is with international relationships with the EU we will examine further in part three. But first we will look at the EEA agreement where although there is commitment to adhering to the EU telecommunications acquis there is more flexibility with regard to the implementation as per the EEA agreement.

And it’s with the EEA’s relationship regarding telecoms and the EU where we turn our attention to next.

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Guess Me Weight

Following on from our previous post we see an interesting example of Ofcom’s wide brief, with a “guess your weight” competition held in central London yesterday. Protesters took rather unusual measures to highlight their objections to an amendment made to the 2003 Communications Act.

This amendment meant that any paid-for pornography bought online will now be regulated by the same guidelines set out by the British Board of Film Censors (BBFC) as DVDs sold by sex shops, which involves a number of sexual activities, produced by UK film makers, being banned for online broadcast.

As the Telegraph notes:

The new rules were brought in after the Department for Culture, Media and Sport decided that the laws relating to DVDs and online paid-for video porn were inconsistent.

DVDs are regulated by the BBFC, while online porn is regulated by the Authority for Television On Demand (ATVOD) and Ofcom. With the rise of VOD, the DCMS concluded under 18s would be able to access R18 content.

Providers of what is known as On Demand Programme Services (“ODPS”) are required by law to notify ATVOD before the service begins, and to advise ATVOD if the service closes or undergoes significant changes.

Despite calling itself an “independent co-regulator” it comes as no surprise to learn that the Authority for Television On Demand (ATVOD) is another example of the complex mixture of Ofcom approved and EU financed regulatory structures:

On 18 March 2010, Ofcom delegated certain of its functions and powers in relation to the regulation of On Demand Programme Services to ATVOD by means of a formal designation. The designation included provision for a review of the arrangements after two years. Accordingly, on 22 March 2012 Ofcom launched such a review and on 15 August 2012 issued a statement confirming the Designation with amendments to give ATVOD greater operational freedom.

And while service providers must pay a fee to ATVOD in relation to each On Demand Programme Service, the fees which are charged by ATVOD are the subject of a public consultation each year and are approved by Ofcom.

We see yet another cosy alliance between those which sit on, and have previously sat on, boards across the great number of Ofcom approved regulators.

For example we see that Ruth Evans is the independent ATVOD Chair, and has previously sat on the Deputy Chair of the Office for Communications Consumer Panel for five years and on the Board Director of PhonePay Plus, which regulates premium rate services in the UK.

The Deputy Chair, Nigel Walmsley, was until recently a Council Member of the Advertising Standards Authority, and the Chairman of the Broadcasters Audience Research Board (BARB), and Pete Johnson, the Chief Executive Officer was previously Head of Policy and Business Development at the British Board of Film Classification.

Independent Board Member Robin Foster’s profile describes him as having:

… previous experience as a strategy partner at Ofcom, helping to establish Ofcom and playing a key role in Ofcom’s first major strategic reviews of public service broadcasting, telecommunications and spectrum.

Then ODPS have to consider the universal guidelines on child internet safety issued by the UK Council for Child Internet Safety (UKCCIS).

Ofcom is not ATVOD’s only focus as it notes itself:

Under the terms of its designation as the appropriate regulatory authority for editorial content in On – Demand Programme Services (“ODPS”), one of ATVOD‟s designated functions is to ensure that Service Providers promote, where practicable and by appropriate means, production of and access to European works (within the meaning given in Article 1 (n) of the Audiovisual Media Services Directive („the Directive‟) (section 368C(3) of the Act) 

Thus those protesting might be interested to know that Westminster is largely impotent in this case. The dominating factor, which unsurprisingly the Telegraph fails report, is laid bare in the Statutory Instrument in the Explanatory Notes (page 3):

The Audiovisual Media Services Regulations 2009(a) and 2010(b) implement Directive 2007/65EC of the European Parliament and of the Council amending Council Directive 89/552/EEC on the coordination of certain provisions laid down by law, regulation or administrative action in Member States concerning the provision of audiovisual media services(c) (“the AVMS Directive”).

And EU Directive 2010/13/EU (Audiovisual Media Services Directive) states:

It is necessary, in order to avoid distortions of competition, improve legal certainty, help complete the internal market and facilitate the emergence of a single information area, that at least a basic tier of coordinated rules apply to all audiovisual media services, both television broadcasting (i.e. linear audiovisual media services) and on-demand audiovisual media services (i.e. non-linear audiovisual media services).

Confirming once again the UK’s submissive role as a European Union member state.

Oftel, Ofcom And BT

With this piece we seek to explore the nature of the regulatory structure of telecommunications within the UK as illustrated in the above diagram. The intention is an attempt at simplicity which is to look at national, EU and international regulation in turn.

However problems emerge in the sense that such dividing lines don’t truly exist – the EU for example is a fundamental part of the UK government, as is international governance. This becomes especially so with telecommunications. An example is that the Body of European Regulators for Electronic Communications (BEREC) has a direct relationship with the UK regulatory body The Office of Communications (Ofcom) as do indeed EU bodies such as COCOM.

So while we wish to deal with each in turn as an attempt to illustrate clearly the very complex world of telecommunications, we appreciate that there is a very fine line to be drawn between attempting simplicity and being inaccurate. With this in mind the above picture showing the EU as a separate ‘cloud’ and the following piece should be viewed with EU and international governance in mind, and as a consequence much overlap will occur over the next few pieces.

Yet even on just a domestic basis regulation is continually being updated, the above diagram was relevant until April 2014. The Enterprise and Regulatory Reform Act 2013, merged the ineffectual Office of Fair Trade and Competition Commission (established in 1999) to create the Competition and Markets Authority (CMA) meaning the diagram now looks more like this below:

Further domestic complexity was brought to the fore by the Scottish independence vote; that despite political and legislative devolution to Wales, Scotland and Northern Ireland, there aren’t any formal mechanisms which involve the devolved legislatures with representation in telecoms governance and oversight.

Governance at a global, EU, ministerial and and regulator levels exclude representation from the UK’s four nations. For example in the Scotland Act 1998 which established a devolved Scottish Parliament, telecoms was kept as a “reserved” matter – a constitutional term meaning that it was to be decided by the UK Parliament as per Section C10:

  1.     Telecommunications and wireless telegraphy.
  2.     Internet services.
  3.     Electronic encryption.

With Scotland rejecting independence recently, telecoms regulation remains a democratic challenge within the UK. Ofcom appointed the Advisory Committee for Scotland (ACS) to advise Ofcom “about the interests and opinions, in relation to communications matters, of persons living in Scotland.” However as only an advisory committee it sits to one side, unelected and unaccountable. The same lack of ‘devolution adjustment’ also applies to Wales and Northern Ireland. This could be consider unsatisfactory when telecoms across the UK have different needs with regard to rural location, broadband and 2G, 3G 4G mobile phone access.

Thus not unsurprisingly, with this in mind, the demand for an independent Scotland to have a say in telecommunications regulation was made in its White Paper, Scotland’s Future – Your Guide to an Independent Scotland (page 276):

The government of an independent Scotland will have the powers to properly prioritise the needs of rural Scotland in relation to telecommunications…

Scotland’s dissatisfaction with regard to a lack of representation laid bare on page 311 (my emphasis):

We have also felt the impact of other decisions in communications policy that did not take account of Scotland’s circumstances. When 3G mobile licences were auctioned in 2000, an initial coverage target of 80 per cent of the UK population was set. This was increased to 90 per cent of the UK population in December 2010. Despite the efforts of the Scottish Government, a distinct Scottish target was not set. Currently, 3G coverage in Scotland is the lowest of the four UK nations, reaching only 96 per cent on the most optimistic estimates. 

Furthermore, there is a disparity between urban and rural Scotland. Coverage in rural Scotland drops to as low as 92 per cent, demonstrating that there will always be poorer coverage in rural areas unless these areas are given priority in allocating licences.

A contrast could be considered between the lack of telecoms representation by Scotland within Ofcom and with Ofcom’s broadcasting responsibility – where the BBC, with its Audience Council Scotland, has a representative member for Scotland on the BBC Trust which is currently Bill Matthews.

To explain Ofcom’s lack of coherence we can see that one of the notably observations taken from the above graph as indicated by the arrows is that in terms of its relationships with other interested regulatory bodies Ofcom has a prominent central role to play in UK communications regulation. But it is a role that is always inconsistent.

The lack of consistency has been a consequence of a lively mix of ever evolving nature of technology, of the growth of “regulator watching” and of the ever integration of the EU and international considerations.

Domestically the implementation of privatisation of previously nationalised industries under Margaret Thatcher led to a growth of “regulator watching” with often mixed success for the customer, and this was particularly apparent in telecoms.

Ofcom’s predecessor was the telecoms regulator Oftel. Oftel was established under the 1984 Telecoms Act  which had privatised the telecoms market, known as the “Abolition of British Telecommunications’ exclusive privilege”. It was the first major privatisation by the then Conservative government.

Oftel was often accused, particularly towards the end of its regulatory life, of being very sympathetic to BT and with good reason. BT’s relationship with the regulator Oftel was one of “coercive-diplomacy” rather than a telecoms company being more subservient to an assertive telecoms regulator.

The relative impotency of Oftel largely stemmed from BT remaining intact instead of being broken up; a decision which reflected the government’s view on maximising proceeds from shares and future tax revenues on what was the world’s biggest telecommunication company. But by remaining effectively as a monopolist telecoms company BT had every incentive to exclude competition by refusing interconnection between networks or threatening competition by fixing interconnection charges as high as possible.

So what followed was “coercive diplomacy” between the powerful monopolistic BT and its less powerful regulator. This somewhat uneven conflict was particularly encouraged by modifications to BT’s operating licenses. BT was entitled to reject licence modifications proposed by Oftel under Section 12A of the 1984 Telecoms Act.

Thus despite privatisation, many difficulties were experienced by other companies attempting to enter a market wholly dominated by BT, particularly with its inherent well established infrastructure. A problem acknowledged by Oftel itself in its 1st report of 1984:

BT is competing in a large number of spheres of activity in the telecommunications industry from a position of significant strength, resulting from such factors as its established reputation and its established customer base supported by a selling organisation of extensive scope. Understandably many organisations have been apprehensive about the possibility of effect competition in this situation.

Problematic regulation and promotion of competition could also be seen when Mercury (Cable and Wireless) obtained its licence in 1985.

According to condition 13.1 of BT’s licence at the time, any competitor which had been licensed had to enter into a connection agreement with BT to run a connectable system and therefore needed connection to BT’s network. BT’s reluctance to succeeded a measure of market share became apparent in 1985 when Mercury and BT had failed to agree terms for a connection contract.

So Mercury applied to the Director General of Telecommunications (DGT) to make a ruling under the conditions 13.5 and 13.6 of the BT licence. However while the outcome eventually favoured Mercury, who had incurred significant financial costs, the difficulties of overcoming BT’s market place dominance meant that UK privatisation of telecommunications remained little more than a duopoly until the early ’90s.

BT’s dominance as underpinned by Section 12A meant it could bypass Oftel by threatening to force the issue to go for consideration by the then Mergers and Monopolies Commission (MMC) – a body which was eventually replaced by the Competition Commission in 1999, (given further powers under the Enterprise Act 2002) and then itself replace by the CMA.

By going to the MMC then open up the possibility of third party challenges to the cosy and convenient alliance of both BT and Oftel. Thus at the time Section 12A gave both strong incentives to negotiate terms to avoid uncertainties outside the charmed world of telecommunications that a third party may induce. The threat of a big stick in the guise of MMC gave each party a mechanism which could be used to bear down pressure on the other.

As a result Oftel was to suffer from “regulatory capture” by BT, eventually becoming as a regulator unfit for purpose. A successor was needed to further open up the telecoms market to competition. That came in the form of Ofcom whose prominence as the major regulator was established by The Communications Act 2003 (TCA)

Yet it was less Oftel’s failings as a regulator that led to its demise but more a need to implement a number of EU directives into UK law which resulted in the Communications Act – EU Directives which unsurprisingly sought to further harmonise communications regulation across the European Union under the guise of modernisation but naturally implied a further step towards EU integration. Such EU Directives included; Directive 2002/19/EC, Directive 2002/21/EC, and Directive 2002/22/EC.

Using these EU Directives the then Labour government established Ofcom which inherited the duties of five separate other former regulators – the Broadcasting Standards Commission (BSC) the Independent Television Commission (ITC), Oftel, the Radio Authority and the Radio Communications Agency.

Out of the TCA Ofcom became a “super regulator” and it comes as no surprise given Ofcom’s inheritance that it was criticised for having “a too wide a brief“. Not for the first time this was less a reflection of EU law and more the habitual enthusiasm of UK governments to gold plate EU law. Thus we have to query whether the initial establishment of Ofcom needed such a wide brief to comply with EU law or whether it was the political nature of the then Labour government which had unwelcome habit of reliance on big state solutions.

However it was not only the wide ranging powers that posed Ofcom problems but the inconsistency of those powers. Despite inheriting the briefs of the ITC, BSC and the Radio Authority it became clear that Ofcom was to have limitations in certain areas for domestic political reasons.

During the Parliamentary debate in 2002 on the Telecommunications Bill, Labour MP, Secretary of State for Culture, Media and Sport, Tessa Jowell argued in support of the Bill that:

Finally, part 5 gives Ofcom tough competition powers to act concurrently with the Office of Fair Trading. Ofcom will be able to use general competition powers, but we are also retaining, very importantly, sector-specific competition rules for broadcasting—a vital part of protecting markets that do not deliver key policy objectives purely by leaving them to competition alone. Ofcom will have flexibility to use sector-specific powers, but it will not use them where it would be more appropriate for it to use general competition powers.

Reading carefully Tessa Jowell’s statement indicates very clearly that the BBC was not to be fully within the remit of Ofcom a single independent regulator for the UK’s broadcast media. From the outset its creation is fatally flawed as long as the biggest and most powerful broadcaster is not fully under the supervision of the independent regulator for the UK communications industries.

Other issues which became apparent with the TCA 2003, as is typical of the UK’s relationship with the EU, was that it took advantage of EU legislation as an excuse to go further with lawmaking and introduce other controversial parts. An example being, Section 127 of the Act 2003 which makes it:

…an offence to make improper use of a public electronic communications network such as grossly offensive, indecent, obscene, menacing or annoying phone calls and emails.

This was used notoriously used against Paul Chambers who joked on Twitter that he would “blow Doncaster airport sky high”, a charge which he was subsequently cleared by the Supreme Court in London.

With Ofcom we can see that a consequence of a national regulatory body emboldened by new powers is that they purse paths different from government national bodies unhindered. In the UK this was reflected by Ofcom’s decision in 2003 having been established by the TCA 2003, in response to the telecommunications market developing rapidly, to conduct what it called a ‘root-and-branch’ strategic review of the regulatory regime.

Unlike its predecessor Ofcom, determined to breakup BT’s monopoly further, concluded in 2005 a major strategic review of the fixed telecommunications sector by using its separate powers under the Enterprise Act 2002 – itself a result of EU Directives. The objective of the review was to determine whether the sector was suffering from competition problems of such a persistent nature that they could not easily be remedied using Ofcom’s specific market review powers under the TCA.

The outcome of the strategic review meant that BT offered a host of undertakings to Ofcom by which it agreed to set up a separate network access division called Openreach (a so-called “BT group business”) and also to offer its wholesale products on an equivalent basis to both external customers (Cable and Wireless, Carphone Warehouse etc) and its own downstream divisions. The undertakings have brought about a fundamental shift in the way in which BT had conduct business with all its customers, meaning all were now on a more equal footing in terms of wholesale access.

Thus despite the EU inspiration behind TCA and the Enterprise Act, from a regulatory perspective, the establishment of Openreach and its relationship to external customers is currently unique to the UK and is being actively studied by regulators in other European countries who experience similar competition problems arising from the presence of a large incumbent telecommunications operator.

The term “super-regulator” though does not mean Ofcom is the only regulator when it involves telecommunications, there are at least sixteen others and the list below demonstrates with great clarity the criticism that Ofcom has a brief which is too wide, and a reflection of the diversity of telecoms: it has its tentacles everywhere:

1)   Advertising Standards Authority (ASA)
2)   Telephony Preference Service (TPS)
3)   Ombudsman Services
4)   Communications and Internet Services Adjudication Scheme
(CISAS)
5)   PhonepayPlus
6)   Internet Watch Foundation (IWF)
7)   UK Council for Child Internet Safety (UKCCIS)
8)   UK Safer Internet Centre
9)   Child Exploitation and Online Protection Centre (CEOP)
10) NICC – UK home of network interoperability standards
11) Go On UK – “empowering everyone in the UK to reach their digital potential”
12) NGN UK – dormant now part of OTA
13) Office of the Telecommunications Adjudicator (OTA)
14) Gambling Commission
15) Information Commissioner’s Office
16) British Board of Film Classification (BBFC)

Not surprisingly with sixteen different organisations we have a complex mixture of Ofcom approved and EU financed regulatory structures. An example of the myriad structure can be found with the Internet Watch Foundation which came to media attention when it censored a Wikipedia page over an entry regarding an album cover by the German band The Scorpions. Here we see a registered charity, which works very closely with Ofcom (although Ofcom has no powers to regulate the internet) and receives EU funding. Susie Hargreaves the Chief Executive has also joined the BBFC’s Consultative Council.

Further evidence of the diversity and Ofcom’s overreaching remit comes via the Advertising Standards Agency which describes a system as being one of “co-regulation of broadcast advertising” – it is self-regulation within a co-regulatory framework. It is underpinned by an enabling statutory instrument, The Contracting Out (Functions Relating to Broadcast Advertising) and Specification of Relevant Functions Order 2004 and a formal Deed between Ofcom and the ASA (Broadcast), BCAP and Basbof.

Interestingly Ruth Sawtell who is on ASA Council is also a non-executive director of PhonepayPlus, the regulator of premium rate telephone services.

In addition to the hydra nature of Ofcom, and its regulatory offspring, telecommunications are also responsibilities imbued within various government ministries and the agencies for which they are responsible, requiring within government itself a need for coordination as the table below illustrates (click to enlarge):

Thus it’s apparent that even on a domestic basis telecoms regulation is diverse, overlapping and often incoherent. In the next piece we will move our focus away from domestic regulatory structures and turn our sights on the EU’s role in UK telecommunications regulation.

Black Spots, Not Spots And Shadows

There’s an interesting piece in the Telegraph from Monday regarding mobile phone coverage in the UK. Despite that during the 1980’s the UK, along with other European nations, were leading the way in GSM standardization, rollout of subsequent technologies such as 3G, since telecoms has become an EU competence, has been less than satisfactory:

There is little more debilitating in a supposedly digital world than the mobile black spots that still plague so many parts of the UK. These are the areas where mobile phones don’t have a signal, and where it is therefore impossible to make voice calls or send texts. Almost as bad are the even larger areas with no 3G reception (let alone 4G, of course) and where it is therefore impossible to access the internet from smartphones or tablets on the move.

It’s certainly no secret that UK mobile phone 3G coverage is poor in many areas of the country, particularly in comparison with other countries. Cornwall for example which is a popular tourist destination has long suffered with sub-standard coverage – Orange (now part of EE) being one of the only operators for some time to attempt to provide a decent mobile signal. An article in Tech Advisor from May this year expressed a view that in general 3G coverage in the UK was “embarrassing”.

OFCOM, under The Wireless Telegraphy Act 2006 required that by June 2013 the four mobile phone license holders meet and maintain a 90% population 3G coverage, three providers met the target with only Vodafone missing its target by 1.4% by the deadline – only to meet it this year.

Yet despite the 90% coverage claim there are reasons why 90% coverage doesn’t really mean that at all. To achieve coverage of 90% of the population the networks only really need to cover the most populated areas of the country, leaving rural areas scorned. As the Guardian noted in December 2013:

Today, 80% of the population can get a signal from all of the four operators – EE, O2, 3 and Vodafone – but geographically it remains very patchy, with just 21% of the landmass being served by all four. Nearly 23% of the UK has no 3G at all, and in nearly 13% of the country making any kind of mobile call is impossible.

The lack of 3G coverage begins to matter when we consider that with the growth of smartphones, data and the demand for broadband is far outstripping voice as the main means of communication on the move. The graph below (click to enlarge) from the Ericsson Mobility Report, released in June 2013 illustrates this acutely:

At this point we could be mischievous and, using the criteria set in terms of coverage based on population by OFCOM, compare the UK with North Korea which since 2011 has had a 3G coverage of 94% in terms of population served. On this basis it could be argued that North Korean mobile coverage is better than the UK’s. The North Korean network (Koryolink) is provided by the Egyptian international telecommunications company Orascom, with officially 10% of North Koreans (2 million) being subscribers, though the figure may be much higher due to the practice common in poorer countries of renting phones out to family and friends to share the costs.

With poor coverage in the UK it is understandably that the government is keen to improve 3G coverage at the very least. This though has prompted what appears to be a dispute in government between Sajid_Javid of the Department for Culture, Media & Sport arguing for better UK coverage

I’m determined to ensure the UK has world-class mobile phone coverage as investment in infrastructure will help drive this government’s long-term economic plan.

It can’t be right that in a fifth of the UK, people cannot use their phones to make a call. The government isn’t prepared to let that situation continue.

…and the Home Secretary, Teresa May, who seems to be unwilling to reveal “not spots” as reported by the Times (£):

A confidential letter from the home secretary, seen by The Times, advises that plans by Sajid Javid to make mobile phone companies improve their coverage threaten to damage the ability of intelligence agencies to thwart plots.

With this in mind we probably for security reasons shouldn’t mention that a notable “not-spot” is RAF Menwith Hill with its oversized golf balls in North Yorkshire:

Here, and in surrounding areas, mobile phone coverage drops off the end of a cliff. No mobile phone signal is usually possible when close by.

One of the proposals by the government to counter the lack of 3G coverage, (and not unsurprisingly a top down ‘solution’) is new legislation to force “providers to introduce network roaming across Britain, ensuring that customers automatically switch networks when they have no signal from their usual provider”:

National roaming – phones would roam onto another network’s signal when theirs was not available. This is similar to what happens when you’re abroad.

Infrastructure sharing – mobile networks would be able to put transmitters on each other’s masts.

But again this demonstrates that technology is simply marching on far ahead of regulators and government. Not only costing the sharing of private mobile networks will be a nightmare, by the time any kind of legislation is invoked technology will have moved on.

With the release of the new Apple’s iPad Air 2, is the emergence of a programmable SIM card (backed by standards set by the ETSI) which will allow users to switch mobile network providers and plans at the touch of the button which could be the first step towards freeing mobile devices from restrictive mobile contracts, allowing users to switch carrier just by selecting an option in settings.

Thus government legislation may prove to be unnecessary…