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Regulatory Overview

The current regulatory regime for the telecommunications industry is primarily derived from the Communications Act 2003 ("the Act"). The Act implements a series of EU electronic communications directives aimed at creating and sustaining a liberalised, harmonised and competitive telecoms industry within the EU.

The Office of Communications ("Ofcom") was established by the Office of Communications Act 2002 but derives its authority as the independent regulator and competition authority in the UK for telecoms, television broadcast services and wireless communications services via the Act.

Ofcom's over-arching duties as set out in the Act are (i) consumer protection and the furtherance of consumer interests in relation to communication matters; and (ii) the furtherance of consumer interests in the relevant communications market via the promotion of competition within the industry.

Regulation of the communication industry focuses on two main concepts - (i) "electronic communications networks" (which includes the internet and broadcasting networks as well as more traditional telecommunications networks also known as ECN); and (ii) "electronic communications services" (essentially any service conveying signals using an electronic communications network also known as ECS).

The General Authorisation regime

In the past, network operators and service providers were each individually granted licenses under the Telecommunications Act 1984 in order to provide telecommunications services.

The Act abolished the system of individual licensing and instead replaced it with a general authorisation regime for the provision of ECN and ECS, all of which are implicit in the Act.

In accordance with the general authorisation regime, all ECN and ECS are generally authorised to provide networks and services subject to their compliance with the General Conditions of Entitlement.

In exceptional circumstances where the ECN and/or ECS is found to be a significant market power, then such ECN and/or ECS will be subject to certain specific conditions designed to uphold competition within the industry.

The General Conditions of Entitlement

The General Authorisation is subject to the General Conditions which impose certain duties and obligations on providers of communication networks and services.

The General Conditions of Entitlement identify three main types of network or service provider and the application of the Conditions vary depending on which of the group apply to a particular undertaking (and it is often more than one).

The three main groups are:

  • providers of Electronic Communications Services or Networks (ECN and ECS) (having the widest application)
  • providers of public ECN and ECS
  • providers of Publicly Available Telephone Services (PATS) or Public Switch Telephone Networks (PSTN) (having the narrowest application)

The conditions themselves sets out the need for compliance with matters such as free access to emergency numbers (999), minimum terms in consumer contracts, clarity in and retention of billing records, the incorporation of a code of practice for domestic and small-business customers, the appointment of a dispute resolution scheme for such domestic and small-business customers, and access to number portability services.

Specific Conditions

In exceptional cases Ofcom may require providers to comply with additional "Specific Conditions", but will notify such providers individually if such conditions are to be imposed.

Specific Conditions can take the form of (a) universal service conditions; (b) access related conditions; (c) privileged supplier conditions; and (d) significant market power conditions.

Enforcement

If Ofcom determines that there are ‘reasonable grounds for believing' that a Condition has been contravened, Ofcom will issue a notification to the relevant provider and specify a period within which the breach must be remedied.

Where the provider fails to comply with the notification, Ofcom will then issue an enforcement notice. If non compliance of the notification persists, Ofcom will be able to commence civil proceedings for failure to do the same.

In addition, Ofcom may also impose financial penalties of up to 10% of the provider's annual turnover for any failures to comply with its notices.

Ofcom's ultimate sanction is to suspend entitlement of a provider to supply services and require compensation to be paid to the affected customers.

If you require advice in relation to Telecom Regulatory matters, please contact us at info@waterfrontsolicitors.com.

Telecoms