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.

The EU And Telecoms (Part 1)

With this piece, in part 1, we turn our sights on the EU’s complex role in member state telecommunications regulation, with emphasis on the UK. The above graph gives some indication of the intricate nature of telecommunications regulation within the EU and the partial subservient relationship for a member state such as the UK.

As can be seen above (click to enlarge) the UK’s main regulator Ofcom has direct relationships with EU bodies which bypass UK ones, as well as having interaction domestically. The EU and UK regulatory structures increasingly are indistinguishable from each another.

Yet also the bewildering emergence and relentless progress of technology means we will also see that EU has only become a partial player in what is increasingly a global regulatory industry. This becomes evident when we consider that even within Europe itself where many functions are regulated beyond the EU.

An earlier example can be seen acutely with the establishment of the mobile phone standard GSM in the 1980s. GSM, with very little if at all EEC/EU involvement, was an illustration of European nation state co-operation and subsequently the GSM standard became a global success story.

The GSM agreement was reflected in the long standing establishment of non-EU bodies include the European Telecommunications Standards Institute (ETSI) and the European Conference on Posts and Telecommunications (CEPT).

Despite the existence of non-EU bodies it is with no surprise, due to the inherent cross-border nature of telecommunications, that the EU saw the sector as an opportunity to use the growth of telecoms to try to facilitate ‘ever closer Union’ further.

Pre-Maastricht the EEC had attempted to use the Terminal Equipment Directive (88/301/EEC) – issued under Article 90 of the Treaty of Rome – to force the liberalisation of telecoms including the satellite and mobile markets. Despite Member States objecting on the basis it was outside the EEC’s own competences (satellite communications for example have military implications) the ECJ after 30 months of legal wrangling upheld the Directive.

Naturally the solution for the EEC (EU) to such legal wrangling was to make communications a competence via a Treaty. Thus not long after, we see the clear intentions of the EU’s ambitions when in the Maastricht Treaty (Article 129 D) it for the first time gave the EU competence in the field of telecommunications (my emphasis):

The Maastricht Treaty gave the EU the task of establishing and developing trans-European networks (TENs) in the areas of transport, telecommunications and energy, in order to help develop the internal market, reinforce economic and social cohesion, link island, landlocked and peripheral regions with the central regions of the Union, and bring EU territory within closer reach of neighbouring states.

Even in the early 1990s telecommunications, which for obvious reasons was becoming a globalised industry, increasingly relied on global bodies to set global standards for convenience. The EU though envisaged the sector more as a mechanism and means to facilitate its own political union – despite the example of GSM and mobile technology where nation states had led and the EU had merely followed.

Typically then we saw in the early 1990s the EU arguing in favour of more telecommunications liberalisation with a view to completion of the internal market with an EU wide regulator. Emboldened by new powers in Maastricht led to the EU Commission launching a strong push to adopt a common strategy for the creation of a European information society driven by a European information infrastructure. In 1993, the Council of Ministers (EU) agreed to fully liberalise voice telephony services by 1 January 1998:

[The EU Commission] it is asking the Council to decide  on a number of principles contained in the Commission communication, in particular:

   –  the complete liberalization of services;
   –  a transitional period ending in 1998
   –  a precise schedule  in two main stages with a consolidation
      phase (1993-1995)  and a phase of gradual opening up to
      competition  (1996-1998);
   –  the role of infrastructures.

Following  its discussion,  the Council  instructed the Permanent Representatives Committee to continue work on this dossier with  maximum efficiency,  in order to enable the Telecommunications Council convened for 16 June to arrive at an agreement.

In addition the European Council meeting of December 1993, in its Presidency Conclusions considered a European Commission policy paper – European Commission White Paper, Growth, Competitiveness, Employment – The Challenges and Ways Forward into the 21st Century, 1993 which argued:

The Community needs an adequate frame-work for the developing of new market opportunities. In Europe some sectors are traditionally the exclusive preserve of non-market services or public utilities, in particular when it comes to the fulfillment of public needs. Reforms aiming at separating the different functions of public authorities with regard to the supply of such services as producer, purchaser and regulator, in sectors such as health care, telecommunications, etc. should enable the needs of users to be better served at less cost for public finances and with market creation potential .

The Presidency Conclusion on behalf of Member States accepted the EU Commission White Paper noting:

A more decentralized economy, given the growing importance of the local level; the economy needs to be geared to the possibilities offered by the new technologies…

…the trend towards a decentralized economy, which has been made possible by new information technologies, must be encouraged….The European Council asks the
Commission to examine ways of achieving this objective.

Thus the European Council requested a report be prepared for its 1994 Corfu meeting by a group of prominent persons on the specific measures to be taken into consideration by the Community and the Member States for the infrastructures in the sphere of information.

Such a group ‘of prominent persons’ became known as the ‘High Level Group on the Information Society’ – organized by the Commission and chaired by the then Commissioner for the Internal Market and Industrial Affairs (soon to become the Commissioner for Industrial Affairs, Information and Telecommunications Technologies), Martin Bangemann – a former leader of the German Free Democratic Party (FDP).

By 1994 the High Level Group on the Information Society produced a report for the 1994 European Summit; “Europe and the Global Information Society: Recommendations to the European Council” a report which became widely known as the Bangemann Report and was adopted by the European Council, Corfu, June 1994.

The report urged the European Union “to put its faith in market mechanisms as the motive power to carry [Europe] into the information age. This meant that actions must be taken at the European level and by Member States to strike down entrenched positions which put Europe at a competitive disadvantage.”

The report proposed “fostering an entrepreneurial mentality to enable the emergence of new dynamic sectors of the economy; [a means of developing] a common regulatory approach to bring forth a competitive, Europe-wide, market for information services.”

It then noted:

In addition to its specific recommendations, the group proposes an action plan of concrete initiatives based on a partnership between the private and public sectors to carry Europe forward into the information society.

The Bangemann Report was to have a very significant and lasting influence on the framing of subsequent EU policies for Information and Telecommunications Technologies (ICT) research and communication services. For many years following its publication the report was repeatedly cited as a kind of “Bible” by Commission documents and officials on a very wide spectrum of industrial and social policy initiatives. For example it was explicitly invoked as a framework for an important 1994 document setting out a new strategy for the audio- visual sector in the EU single market context and another paper in 1994 titled ‘Europe’s way to the Information Society: An Action Plan‘.

Yet despite its significance within EU circles the Bangemann report was out of date almost as soon as it was written. It had largely ignored the emergence of the internet and what it did acknowledge was to highlight its basic lack of understanding and knowledge. Consequently it expressed a level of discomfort – page 27 (my emphasis):

Internet is based on a world-wide network of networks that is not centrally planned. In fact nobody owns Internet. There are now some 20 million users in more than 100 countries. The network offers electronic mail, discussion forums, information exchange and much more. Internet is so big, and growing so fast, that it cannot be ignored. Nevertheless, it has flaws notably serious security problems. Rather than remaining merely clients, we in Europe should consider following the evolution of Internet closely, playing a more active role in the development of interlinkages.

In the meantime, while largely failing to anticipate or understand the internet, the liberalisation process in other telecommunications sectors was being extended post 1994, for example in satellite communications.

By 1995 via the American based GPS had became a system that had broken out of realms of science fiction and used as an everyday tool for navigation by private vehicles, ships and aircraft. The EU in response planned to install a rival system called Galileo where it recognised “the value of a space programme, of which Galileo is a part, in completing the process of European integration“.

In contrast to the liberalisation process, and interestingly, the intention to adopt similar criteria to public broadcasting services (PBS) came with a great deal of reluctance – the EU itself noting that “the relationship of European Union policy and Public Broadcasting Services could be summarized as a historic dilemma without a clear answer. The balance between a strong European competition policy and public broadcasting survival has still to be found. Perhaps the text cited below explains the Gordian knot faced by European Union”:

“We need balanced solutions able at the same time to respect two important points. The first is the basic function of Public Broadcasting Services in the most of EU Member States. This fact has been recognised recently in Amsterdam Treaty with the Public Broadcasting Protocol. The second is that European integration is based on free market and equal competition. The future of the dual European TV system depends on how we can be able to combine these two apparently incompatible principles” (The digital age: European Audiovisual Policy. Report from the high level group on audiovisual Policy, 1998).

In essence the EU faced a dilemma; how to make compatible its own competition rules with public state funding of PBS. Article 87 forbids the state aid, which distorts or threatens to distort competition, insofar as it affects trade between Member States but with broadcasting an exception was made which notably meant that PBS could remain publicly funded to ensure the promotion of the “democratic, social and cultural needs of each society and to the need to preserve media pluralism”.

This role of public service broadcasting in promoting cultural diversity was recognised in 2005 by the UNESCO Convention on the Protection and Promotion of the Diversity of Cultural Expressions.

The reluctance of the EU was undoubtedly due to its appreciation that member states’ PBS networks would be more sympathetic to its integration project under the guise of the ‘cultural need’ criteria. This becomes especially evident when we consider the BBC receives a substantial amount of money from the EU and possibly related (or not) has long been criticised for pro-EU bias.

Public broadcasting aside, generally from 1994 onwards, in the context of developing the ‘information society’, general liberalisation of telecommunications structures was presented as the way to develop multimedia – cable television networks were ‘liberalised’ in 1996, with mobile communications following on 1st January 1998.

Bangemann’s report thus was hugely influential, and despite failing to anticipate properly or appreciate the approaching dominance of the internet, its vision of telecommunications liberalisation would influence the EU Commission’s thinking regarding the internet.

The EU’s determination to ‘liberalise’ markets resulted in a growth of “regulator watching”, which followed closely the experiences of the privatisation drive in Member States particularly the UK. “Regulator watching”, or a regulatory state, provided a convenient opportunity in extending EU governance across member states via a regulatory body.

By separating out the service provision by companies from sector oversight privatisation, and the creation of markets, allowed conditions to exist for the adoption of common rules by an independent regulatory body and the conditions of access to the market for new operators to be harmonised. All of which naturally increased the call for ‘more Europe’ under one EU regulator.

And in part 2 of the EU’s effect on the telecoms industry we will see how it attempted to facilitate the emergence of an EU regulatory body.

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.

Goodbye Nokia

According to the Telegraph today, it’s “a goodnight from me and a goodnight from him” with regard to the once mobile phone giant Nokia:

Farewell Nokia. Once one of the biggest brands in the world, it has now gone the way of Pan Am, Opal Fruits and Somerfield supermarkets.

This week Microsoft, which bought Nokia’s handset division for £4.61 billion last year, has announced that the next phone it releases will no longer have the Nokia logo stamped on it. 

Although the company still exists, as a brand it’s all over – Microsoft deciding that Nokia is not a name synonymous with smartphones. Within 10 years it has gone from a giant to nothing more than a footnote, though I guess no-one will miss its distinctive ringtone which was widely parodied. A victim of the ruthless and relentless march of technological progress. Its classic phones, with changeable covers and customisable ringtones, now museum pieces.

Yet while we mock old fashioned mobiles for being like bricks, it is a curious oddity that modern phones are getting larger. As technology progresses it is not unreasonable to expect devices in general to shrink as it did with mobiles in the ’90s, probably best illustrated by the Nokia 8210 launched in 1999. However as mobile technology has developed their size has now gone into reverse – as anyone who has held an iPhone 6 can testify to. A reflection that they are being used less for phone calls and more as mini-computers.

In other words we are communicating more but talking less. I’m sure there’s a lesson in there somewhere.

No flowers

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…

Brexit And Telephones (2)

Following on from our previous post on Telecoms, we intend to address more fully the complexities of European and international political and regulatory networks of telecommunications which present significant challenges when considering Brexit. We begin here though as background with the impact of the rise of the mobile phone before we move in further pieces which look at national, EU and international regulation in detail.

As would be expected due to its inherent nature regarding communication, telecoms is a truly globalised industry which is reflected by the fact that many of its well known companies are multi-national businesses. For example the biggest and most valuable telecoms giant is US-based AT&T which provides mobile and fixed-line telephone service and broadband cable whose overall revenues grew to more than $127 billion in 2012. UK based Vodafone is the world’s second largest mobile phone operator on revenue and subscribers, behind only China Mobile.

Yet the rapid advancements in the last 30 years in technology have not only been reflected in the diversity of services provided by telecoms companies but also that the market is now populated extensively by what are traditionally non-telecoms specific enterprises.

We can appreciate the rapid advancements most acutely when we consider that in the time it took fixed lines, since the invention of the phone some 140 years ago, to progress from analogue, to digital circuit switching and then to packet switching technology courtesy of VoIP, it has only taken mobile phones around 30 years to achieve the same progression path.

When the traditional telephone was first challenged properly by the mobile phone in the early 1980’s operating on a cellular network– it was essentially by a two way radio which operated on two different analogue frequencies in order to receive and transmit conversations at the same time. It was an advancement on Push-to-Talk technology.

The rapid rise of early mobile phone efforts and vigorous competition though meant incompatibility of technology between carriers and also capacity problems. Other problems were that some services in the UK services such as Rabbit, Phonepoint and Mercury Callpoint could only make outgoing calls near a designated base station.

Even in the United States by the mid 1990s, there existed competing and incompatible second-generation digital wireless — channel access technologies such as CDMA (code division multiple access), TDMA (Time division multiple access) and iDEN, ensuring that phones would not work from one system to another.

The situation in Europe in the early 1980s was initially even worse. The first European mobile cellular systems were introduced in Scandinavian countries in 1981 and 1982. Following on shortly were the likes of Spain, Austria, the UK, Netherlands, Germany, Italy, and France. These systems were all analogue, now known in hindsight with the technological advancements as first generation (1G), however the problem was that there were eight of them which were all different and incompatible. Thus mobile communication was generally restricted to one country only.

This led to the intervention by the Telecommunications Commission of the European Conference of Postal and Telecommunication Administrations (CEPT), a voluntary association of European countries where policy makers and regulators from 48 countries across Europe collaborate to harmonise telecommunication, radio spectrum, and postal regulations. The CEPT established a study group called the Groupe Speciale Mobile (GSM) to develop the specifications for a European-wide second-generation digital cellular system in the 900 MHz band.

The requirements were that it was to be fully digital, incorporating the best technology of the time. There would be no backward compatibility with existing systems and they desired that their new wireless standard would be similar to landline requirements for ISDN, hoping to make a wireless counterpart to it.

Here conflicts emerged between the national self interest of countries, of mobile phone companies and the need for standardisation.

The GSM group wanted to select the most appropriate technology by assessing a number of demonstration systems by interested parties. Eight systems were submitted which were between broadly TDMA technology and those incorporating CDMA technology. TDMA and CDMA were split along Scandinavian countries (Nokia, Ericsson and Elab) and the Germany/France axis respectively – whose systems were heavily subsidised by the French and German governments. The split reflected differing demographic characteristics between the countries.

TDMA with its fewer time slots thus its relatively moderate traffic capacity was less cost intensive and meaning it was easier and quicker to rollout across rural communities. Conversely the systems of Franco/German origin were generally designed with high traffic capacities in mind. This was a cost effective solution in more urban and dense areas with high traffic-density requirements but is more expensive for rural areas where many time slots are not needed.

Yet at least if not more as important as technology were; political issues, property rights issues and vested interests. Obviously the stakes were enormous for suppliers and states. One of the two shortlisted by SEL/Alcatel was considered to be “too proprietary” and held the patents on its CDMA-based proposal. There was reluctance by some countries to approve the other shortlisted option (TDMA) submitted by Ericsson due to it being based in a country that at the time was not a member of EEC. Other disputes included the use of encryption in GSM (A5/1), with eventual agreement that it should be optional – countries such as France do not allow it to be activated.

Interestingly, although the EEC privately supported narrowband TDMA solution, it wasn’t in a position to act to facilitate a breakthrough, as 84/549/EEC: Council Recommendation of 12 November 1984 confirms the EU only had the power to recommend:

that the Governments of the Member States ensure that:
– the telecommunications administrations:

1. consult each other, preferably in the framework of CEPT, before they introduce any new service, notably between Member States, with a view to establishing common guidelines so that the necessary innovation takes place under conditions compatible with harmonization;

It was not until the Treaty of Maastricht (Article 129 D) that, for the first time, the EU was given a competence in the field of telecommunications. Instead it was diplomatic efforts by individual countries, notably by the UK, that lead to a breakthrough which came via the Bonn Declaration in 1987. This confirmed that a decision had been reached to use TDMA technology:

Europe must have a single standard supported throughout the CEPT- This should be based on the narrowband TDMA concept defined by CEPT at its Madeira meeting in Feb 1987.

The ministers also called for the agreement between network operators to be formalised by a Memorandum of Understanding (called the GSM MoU) which they did, not long after:

The signatories shall support the open (non proprietary) definition of at least the following interfaces in the form of CEPT recommendations:

Mobile/BaseStation (air interface) based on the narrowband TDMA concept defined by CEPT at its Madeira meeting in Feb 1987 enhanced in the areas of modulation and coding to provide the greatest flexibility in receiving equipment implementation as agreed by CEPT GSM at its Brussels meeting 9-12 June 1987

Base Station/MobiIe services Switching Centre

Mobile services Switching Centre,/Mobile services Switching Centre/Location Register

In 1987 the then EEC adopted, via Council Directive 87/372/EEC, frequency allocations proposed by the CEPT covering the 25 MHz bands of 89MHz for uplink – mobile to base station, and 935–960 MHz for downlink – base station to mobile to apply to the Single Market.

(Interestingly the rights to the GSM trademark and logo were held by France Telecom)

The first GSM systems were up and running by 1991 with Vodafone launching the UK’s first GSM commercial service in the same year. Having been deployed throughout Europe, GSM allowed smooth roaming from country to country.

GSM has since become the most popular worldwide technology regarding the standardisation of mobile phone calls:

More than 6 billion people worldwide use the Global System for Mobile Communications (GSM) family of technologies. GSM is the most widely used wireless technology in the world, available in more than 219 countries and territories worldwide, with a market share of more than 90 percent.

What made GSM so successful, was not that it was a far superior technology – indeed the first GSM handsets in 1992 were not much better than the old analogue ones – but instead that it established a complete telecommunications network in one package. Other worldwide standards bodies only produced a specification for the radio piece of the mobile network. Automatic roaming and handover of calls between base stations required dedicated exchanges for numbering and switching management and this is what GSM provided. It turned out to be a very successful illustration of European co-operation, ironically, with little involvement of the EEC/EU.

Born out of the ‘GSM MoU’ in 1987, and powered by the success of GSM, was the emergence of the GSM Association (GSMA) which represents the interests of mobile operators. Thus GSMA has “evolved to become one of the most powerful trade associations in the world, lobbying governments on everything from tax policy to pricing strategy”:

Spanning more than 220 countries, the GSMA unites nearly 800 of the world’s mobile operators with 250 companies in the broader mobile ecosystem, including handset and device makers, software companies, equipment providers and internet companies, as well as organisations in industry sectors such as financial services, healthcare, media, transport and utilities.

In 1988, created by CEPT the European Telecommunications Standards Institute (ETSI) was established. ETSI is an independent, not-for-profit, standardisation organisation in the telecommunications industry and, although not an EU organisation, it is officially recognised by the EU. Crucially ETSI allows direct participation in its technical committees from non-EU companies that have commercial interests in Europe which means it has a global outlook and influence – for example it was a founding member of the Global Standards Collaboration.

GSM thus was a big success, and probably due to this success ‘Europe’ began to become complacent – an unwise position to take as technology marches on relentlessly. While GSM second generation (2G) cellular systems were used principally for the purpose of transmitting voice calls – there was a growing use for the transmission of data. GSM acknowledged this with the flexibility of using Signalling System No. 7 which was essential to support new data services and SMS (text messages). Within a decade one billion text messages were being sent in a month. The development of third generation (3G) meant that term ‘mobile broadband’ reflected the growing demand for phones to emulate domestic PC broadband speeds.

While GSM was ultimately a triumph of European co-operation without the intervention of the then EEC, it was inevitable that the EU would use telecommunications as another excuse for further political integration which it retrospectively added to the Maastricht Treaty. Not unsurprisingly since becoming an EU competence the progression of telecoms innovation and co-operation within Europe has not been much short of stagnation.

We can see this acutely with the emergence of LTE (Long-Term Evolution) commonly known as 4G. Whereas European countries took the initiative in the ’80s with GSM now other non-EU countries are doing so with 4G. Rather ironically the GSMA writes in its assessment – Mobile Wireless Performance in the EU & the US:

There is broad agreement that the EU mobile wireless market is underperforming relative to other advanced economies, including the U.S. We find that the EU is lagging well behind the U.S. in deployment of next generation wireless infrastructures and the advanced services they make possible, and that EU consumers are worse off as a result.

EU regulatory policies have resulted in a fragmented market structure which prevents carriers from capturing beneficial economies of scale and scope and retards the growth of the mobile wireless ecosystem. We recommend reforming and harmonizing spectrum policies, permitting efficient levels of consolidation, and promoting innovation by fostering dynamic competition.

It then notes that:

Growth in investment in the U.S. is translating into faster data connection speeds: U.S. speeds are now 75 percent faster than the EU average, and the gap is expected to grow.

The U.S. is deploying ITE at a much faster pace than the EU; by YE 2013, 19 percent of U.S. connections will be on lTE networks compared to less than two percent in the EU.

LTE 4G data networks will have the potential to make different streams needed for mobile voice and data services obsolete. Traditional cellular networks require a separate stream to carry voice traffic and data network. With LTE, rather like VoIP on landlines, voice traffic can be carried by IP technology, known as Voice over LTE (VoLTE). The final convergence for mobile phones is following the path trod before it by traditional land lines where the technology of VoIP has begun to establish itself.

Thus with the potential abolition of circuit switching technology within mobile phones this process to just being a mini computer will be complete. What for some time was effectively a phone with just some relatively simple software during the ‘90s where phones could text and allow users to play simple games like snakes as epitomised by the utter domination of Nokia, has become instead, with the development of smartphones, a small computer with telephony attached almost as an optional extra.

This convergence regarding mobile phones means we see telecommunications becoming an important component of the broader IT industry as companies such as Google with Samsung and Microsoft with Nokia enter the telecoms market.

In many ways the complexity of telecoms and indeed international regulation is demonstrated most clearly by the smartphone – the complexities of modern international regulation laid bare by a device small enough to fit in a pocket.  A modern smartphone contains many technologies which are regulated in different ways, by way of an example modern phones tend to have the following features for example:

Bluetooth: Regulated by the United Nations Economic Commission for Europe (UNECE): “Before launching a Bluetooth classified product it must be ensured that the product is in compliance with the international RF, EMC, Safety and Health standards set by the regulatory authorities of the various regions.”

WiFi: Products are certified by the WiFi Alliance, which is a global non-profit industry association stating “The members of our collaboration forum come from across the Wi-Fi ecosystem and share a vision of seamless connectivity. Since 2000, the Wi-Fi CERTIFIED™ seal of approval designates products with proven interoperability, industry-standard security protections, and the latest technology.
GPS: Civil signal designs are owned by the US as confirmed by this statement in 2013 “The governments of the United Kingdom and the United States of America today announced that they had reached a common understanding of intellectual property rights related to the Global Positioning System (GPS) and will work together to address broader global navigation satellite systems’ intellectual property issues.
Radio: FM radio is available on modern phones via plugging in a headset and receiving analogue signals, frequencies agreed under the International Telecommunication Union (ITU).

NFC/RFID: Near Field Communication – technology in smartphones which allows contactless electronic payments. It is based on the international ISO/IEC 18092 standard.

Camera: Photographs made with a camera phone can fall outside the jurisdiction of the EU: “A photographer who requested Wikimedia to remove one of his images used online without his permission has had his wishes dismissed, with the US organisation behind Wikipedia claiming that because a monkey pressed the shutter button it should own the copyright”.

Ringtones: Companies who offer ringtone services to sell to the UK public pay royalties to PRS for performance rights.

Music: Related to the above the issue of copyright and competing international trademark rights became an issue as illustrated by the Beatles (Apple Corp) verses Apple computer case.

What this illustrates neatly is that the telecommunications field is so vast, and changing so rapidly, it is difficult to cover all aspects of it. But its globalised complexity requires global involvement.

In the next few blog pieces we will concentrate on national, European and international telecommunication regulation in turn.