Posted in Telecoms

New Electronic Communications Code – now in force!

The new Electronic Communications Code came into force on 28 December 2017.

The intention behind the new Code is to introduce a range of measures to make it easier for telecoms operators to roll-out infrastructure.  The Code therefore gives telecommunications operators statutory rights to enable the installation, maintenance and use of telecoms equipment in order to operate their networks or provide an infrastructure network.  Such rights are known as “code rights” under the new Code.

As under the previous Code, operators can acquire Code rights by either entering into an agreement with a landowner or by serving notice on a reluctant landowner and then applying to the court for an order imposing an agreement.  The court will make such an order where it considers that: (1) the prejudice caused to the landowner can be adequately compensated by money; and (2) where the public benefit outweighs the prejudice to the landowner (taking into account “the public interest in access to a choice of high quality electronic communications services”).  However, the court cannot make such an order where the landowner intends to redevelop and would not be able to do so if the order were granted.

We set out below the key changes from the previous Code and key points to note.

  • No contracting out: Any terms in agreements that are contrary to the provisions of the Code are not enforceable;
  • Upgrading and sharing: Operators may upgrade equipment and/or share their sites with other licenced operators without landowners’ consent, if the changes to the equipment have no more than a minimal adverse impact on its appearance and no additional burden is imposed on the landowner;
  • Assignment: Operators may assign their rights without landowners’ consent save that a landowner may require the outgoing operator to guarantee the incoming operator’s obligations;
  • Consideration: The consideration granted to a landowner where a court imposes an agreement is based on the market value of the land on a “no scheme” basis (i.e. ignoring the value of having the telecoms equipment on the site and the Code rights that attach to it).  The current view in the market is that this will lead to lower rents/fees for landowners;
  • Statutory continuation rights: Telecoms leases will be outside of the scope of the Landlord and Tenant Act 1954, but operators continue to have separate statutory continuation rights under the Code.
  • Termination: Agreements between landowners and operators can provide for early termination of an agreement but landowners also need to consider an operator has statutory continuation rights under the Code.  Regaining possession of a site is unlikely to be as simple as serving a contractual break notice.  Instead, landowners will have to follow two separate processes set out in the new Code in order to (i) remove the Code rights and (ii) remove the apparatus itself.  This is likely to take around two years, as the landowner’s notice to remove the operator must give at least 18 months’ notice and can only be served if one of a specified number of grounds for termination applies;
  • Who is bound by agreement: It appears to be the case that an agreement entered into by a tenant will not bind the freeholder (although the freehold owner could find itself the subject of a court-ordered agreement if the operator does not want to leave the site on termination of that agreement);
  • Who can benefit from Code rights: Code rights can now be conferred not only on an operator but also on a person who provides infrastructure services for operators. Under the new Code an operator may apply to the Court for the grant of “interim code rights” for a specific period of time or until the happening of a specified event; and
  • Existing agreements: Agreements entered into when the previous Code was in force now need to be read in conjunction with the transitional provisions in the new Code as these have modified the operation of the some of the provisions of the old Code.

Ben Rogers (Legal Director), Rob Shaw (Senior Associate) and Jane Summerfield (Professional Support Lawyer) – DLA Piper UK LLP

Posted in Telecoms Uncategorized

Roaming and MVNOs – too clever by half

Just a quick note to draw attention to a decision by BIPT, the regulator in Belgium here

Lycamobile has been fined €30,000 for violation of the “roam like at home” requirements of the roaming regulation (contained in the 2012 regulation as amended in 2015). It appears that they were offering add-on bundles (at attractive prices) that did not did allow roaming alongside more expensive plans which did allow roaming (and which in practice would only ever be used when roaming).

The roaming regulation prohibits “roaming providers” from charging any surcharge ontop of the “domestic retail price” for roaming, and goes on to prohibit “any general charge to enable the… service to be used abroad”. The regime also includes wholesale price caps that the visited operator’s network can charge to the roaming provider for roaming services.

This puts MVNOs like Lycamobile in a difficult position because – as an MVNO – they never receive any inbound roaming revenue but yet the regulation now requires them to offer roaming to end users without any additional charge though they will incur an additional incremental fee. Thus each extra Mb or minute when roaming will be loss-making for them. Lycamobile must have designed their offer thinking they had found a way around this problem – but unfortunately for them the BIPT has determined that this violated the roaming regulation’s requirements.

In my opinion* it would always be open to an MVNO to block roaming for its end-users entirely – there is no requirement that roaming be offered, only that *if* it is offered there can be no surcharge. The issue here is that Lycamobile appeared to be allowing roaming but charging for it at a different rate from the rate applicable for domestic bundles.

Finally – and as an aside – i think the roaming regulation is clear that MVNOs *are* entitled to the benefit of the wholesale price caps – though if they are effectively reselling roaming bought from their domestic host MNO (called “wholesale roaming resale access”) then the host is entitled to charge a “fair and reasonable” increment on top of the regulated rate to reflect their extra costs in supplying roaming to the MVNO from the visited operator (see Article 3 of the 2012 Roaming regulation). We have seen some MNOs attempt to charge their MVNOs much more than this, arguing that the roaming regulation does not apply. This would appear to be wrong.

*Of course this is not legal advice and specific advice should be sought to confirm in any particular situation.

Posted in International Privacy New Privacy Laws Privacy and Data Security

New guidelines on the application and setting of fines under GDPR

Written by Petr Šebatka and Jan Metelka

Less than 6 months remain for individuals and companies to get ready for the breakthrough regulation in personal data protection envisaged by the Regulation 2016/679 of 27 April 2016[1] (furthermore as “GDPR“).  Since the final version of this Regulation, experts have tried to clarify some remaining “grey” areas to leave as few room for doubts and misinterpretations as possible. The most relevant and valuable inputs came from the Article 29 Data Protection Working Party, which is composed of representatives of the supervisory authorities designed by each EU country, representatives of the authorities established for the EU institutions and bodies and a representative of the European Commission. Also in relation to GDPR, the guidelines and FAQs from the Article 29 Working Party were proven undeniably helpful in clearing some outstanding issues, such as the right to “data portability”[2], role of Data Protection Officers (“DPOs”)[3], role of the Lead Supervisory Authorities[4], or for example, the consequences of automated individual decisions making[5].

 

One of the main reasons for the fuss regarding GDPR and for quick implementation of all required obligations is the issue of fines, further described in the wording of Article 83 of GDPR. A fine may be granted up to a maximum of EUR 10,000,000 (or up to 2% of the total worldwide annual turnover in the case of an enterprise) or up to EUR 20,000,000 (or up to 4% of the total worldwide annual turnover in the case of an enterprise). The breakdown into two groups reflects the importance of breached obligations where the higher rate group has obligations whose breach is expected to increase the level of interference with the right to protection of personal data that GDPR ensures. The lower rate includes, for example, a breach of the provisions on records of processing or privacy impact assessments, while higher rates include, for example, breaches of the principles governing the law and the lawfulness of processing, the conditions for consent to the processing of personal data, the conditions for processing specific categories of personal data and the rights of the data subject.

Article 83 already includes a brief condition for the calculation of the fine: that regard shall be given mostly to the nature, gravity and duration of the infringement, the intentional or negligent character of the infringement, any action taken by the controller or processor to mitigate the damage, the degree of responsibility of the controller or processor, any relevant previous infringements, the degree of cooperation with the supervisory authority or the categories of personal data affected by the infringement. That provides a fair overview on how should the potential fine be calculated.

However, in the viewpoint of Article 29 Working Party, this distinction is not clear enough and therefore the Working Party in October 2017 adopted the respective Guidelines on the application and setting of administrative fines for the purposes of the Regulation 2016/679[6] (furthermore as “Guidelines“), being the first and most relevant document for the interpretation of Article 83 of the GDPR and its interplay with Articles 58, 70 and their recitals. The goal is that these Guidelines shall be used by the supervisory authorities to ensure better application and enforcement of the GDPR. Although the Guidelines are not exhaustive and cannot provide the reader with the differences between administrative, civil or criminal law sanctions in various countries in general, they can serve as a template for a common consistent approach among member states.

That is stressed in the first section of Guidelines explaining the main Principles, such as that the level of protection should be equivalent in all Member States (in cross-border cases consistency shall be achieved primarily through the one-stop shop cooperation mechanism) and all imposed measures shall be effective, proportionate and dissuasive in both national cases and in cases involving cross-border processing of personal data. The Guidelines then continue with the important concept of assessing each case individually, which shall mean, that choosing the appropriate measures must include consideration of all of the corrective measures, which would include consideration of the imposition of the appropriate administrative fine, either accompanying a corrective measure under Article 58(2) of GDPR or on its own.

Key part of the Guidelines is dedicated to the various assessment criteria arising from the Article 83 (2) GDPR, which are listed under letters a) – k) and some of them have already been mentioned above in this text. It provides the reader with a further description of what is deemed long duration, intentional/negligent character, various mitigating actions, steps of responsibility of data controllers and processors and many others. In conclusion it is safe to say, that using the Guidelines across the European Union, the degree of coherence would be significantly higher, positively contributing to the legal certainty of all parties and further increasing the quality of contemporary data protection laws in the European Union.

[1] Regulation (EU) 2016/679 of the European Parliament and of the Council of 27 April 2016 on the protection of natural persons with regard to the processing of personal data and on the free movement of such data, and repealing Directive 95/46/EC (General Data Protection Regulation), which could be found online on http://ec.europa.eu/justice/data-protection/reform/files/regulation_oj_en.pdf

[2] http://ec.europa.eu/newsroom/document.cfm?doc_id=44099

[3] http://ec.europa.eu/newsroom/document.cfm?doc_id=44100

[4] http://ec.europa.eu/newsroom/document.cfm?doc_id=44102

[5] http://ec.europa.eu/newsroom/just/document.cfm?doc_id=47963

[6] http://ec.europa.eu/newsroom/just/document.cfm?doc_id=47889

Posted in Copyrights Patents

I am Exhausted and So Are [Your] Copyrights and Patents

Written by Mark Lehberg

With the pace of the world around us these days, more and more of us are simply exhausted.  And, now with the United States Supreme Court decisions over the past couple years, your copyrights and patents are as exhausted as you.  Here is a quick review:

In 2013, the United States Supreme Court held that the sale of a work of authorship outside the United States exhausted the copyright owner’s rights under copyright law.  That is, the copyright owner may not enforce his/her copyrights in a copy of a work of authorship that was sold abroad.

This decision arguably “opened the door” for the Federal Circuit and the United States Supreme Court to revisit prior decisions with respect to international exhaustion with respect to patents and the Supreme Court walked through that door with its decision in Impression Products Inc. v. Lexmark International Inc.

In Lexmark, the Federal Circuit, consistent with prior decisions, held that the sale of products outside the United States does not exhaust U.S. patent rights with respect to the products that were sold.  The Supreme Court disagreed and held that, like copyrights, the authorized sale of a product, regardless of where the sale occurs, exhausts the patent owner’s rights in the products that were sold.  The authorized sale might be by the patent owner or it might be a sale by a licensee.

However, Lexmark gave the Supreme Court the opportunity to deal with another controversial patent exhaustion issue.  Specifically, whether a patent owner can avoid patent exhaustion by imposing lawful, post-sale restrictions on a product at the time the product is sold.  In Lexmark the Federal Circuit, consistent with prior decisions, held that a patent owner may avoid patent exhaustion by imposing post-sale restrictions on an a product.  Here too the Supreme Court disagreed and held that post-sale restrictions will not prevent exhaustion.  Another blow to patent owners.

Over the last 10-12 years it seems as though patent owners have taken-it-on-the-chin when it comes to patent exhaustion.  In the Lexmark decision the U.S. Supreme Court, citing another Supreme Court decision, note that “the sale terminates all patent rights to that item.” (emphasis added)  It will be interesting to see where the phrase “all patent rights” takes us in the next 10 years.  I am exhausted just thinking about it.

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