By Peter Elliott and Mike Conradi, DLA Piper

By many accounts, the UK’s framework for regulating communications services is amongst the world’s most dynamic and successful. Leaving in its wake a telecommunications licensing regime, in 2003 the UK Government influenced and then implemented new EU Directives which took a different approach to regulating telecoms: general authorisation. In short, this meant that, subject to certain exceptions (such as in respect of the ever-so-valuable radio spectrum), companies were given a general right to provide communications services or networks provided they complied with a set of a rules, namely the General Conditions of Entitlement (or ‘General Conditions’ or ‘GCs’ for short). In the UK, unlike other EU countries, there was not even an obligation to notify Ofcom (the UK’s telecoms regulator) about the provision of communications services!

This fits in with Ofcom’s commitment towards ‘reducing regulation and minimising administrative burdens on its stakeholders‘ and its ‘bias against regulatory intervention‘. However, the General Conditions have increased in length and number since their inception; indeed, three new conditions and 63 pages have been added since 2003. Some of this is understandable; the communications market has changed significantly over the past 14 years, and Ofcom has had to respond to UK and global market developments in addition to implementing new EU Directives and regulations.

However, it is easier to build than deconstruct, and the General Conditions now often fail to meet Ofcom’s goal of seeking to ‘ensure that regulation does not involve…the maintenance of burdens which have become unnecessary‘ . Navigating the unwieldy and confusing structure of the General Conditions is a burden that eludes many.

It is for this reason that Ofcom began a consultation with industry stakeholders in August 2016 to ‘produce a coherent set of regulatory conditions which are clearer and more practical, easier to comply with and simpler to enforce‘. Whereas this may seem sensible, the stakeholders who have responded are nearly unanimous in celebrating the purpose of this exercise whilst criticising many of the Ofcom’s actual proposals.

The consultation has been split into two parts. The first part, which ended in October 2016, concerned the General Conditions relating to network functioning and numbering, and Ofcom’s focus was primarily on shortening and simplifying these requirements; the second part (which is due to conclude on 14 March 2017), relates to consumer protection, and Ofcom’s proposals frequently would extend the scope of these General Conditions in order to take account of changes in technology and consumer behaviour. The proposed changes include (with our comments in italics in brackets):

Consolidating definitions: consolidating the definitions by placing them into a single section. (This is long overdue! More time and energy is often dispensed trying to discern the different ways in which the same terms – such as “Communications Provider” – are defined differently across the various General Conditions than it is actually reading the requirements themselves. The current structure is confusing and contrary to Ofcom’s goal of achieving coherency);

Consolidating overlapping Conditions: consolidating those General Conditions which address associated issues, namely by (i) combining those covering emergency services and emergency situations (GC 3 and GC 4), (ii) combining those covering directory information (GCs 8 and 19), and (iii) placing into a single condition all of the information publication requirements across the General Conditions (whilst also simplifying these, where possible). (Again, this was overdue, particularly as GCs 8 and 19 do not consequentially follow from each other, and the drafting under GC 19 always seemed unnecessarily long given the simplicity of the obligation);

Removing unnecessary Conditions: removing those requirements which are covered under other UK laws, which are no longer needed due to regulatory and market developments, or which are unnecessary because Ofcom has the right to exercise the relevant rights in any event – e.g. removing (i) the obligation on communications providers to share confidential information with Ofcom (GC 1.3), (ii) the prohibition on imposing unreasonable restrictions of network access (GC 3.2), (iii) the rules relating to directory enquiry services (GCs 6.1(b), 8.1(b) and 8.4), and (iv) some requirements on VoIP providers to provide information about service reliability amongst other things, and to ensure emergency calls can be made (Annex 3 to GC 14). (Some of these are welcome – for example, for many new market entrants, the concept of directory enquiry services seemed to hark back to a byzantine era. Similarly, with VoIP increasingly becoming the standard means of making voice calls amongst many enterprises and consumers, it is unsurprising that Ofcom have focussed on clarifying regulations in this area. However, these changes relating to VoIP have been called into question by several stakeholders; for example, Microsoft do not believe it is necessary to ‘create a discrete definition of potential communications services using a specific technology or network architecture’ and Vodafone ‘finds it curious that Ofcom continues to regulate on a technology-centric basis, with specific requirements placed on VoIP call services’. We expect more jockeying in this area as, arguably, the future of VoIP (and data) is the near-future of telecoms);

Extending billing requirements: increasing the scope of the rules on billing accuracy, debt collection and disconnection procedures for non-payment of bills so that, in addition to voice call services, they apply to data services. (This is unsurprising given the uptake in data-related services in recent years. In respect of billing accuracy, Ofcom appears to be targeting the largest players in the market as it also proposes increasing the turnover threshold for triggering these obligations from £40m to £55m; this should help support competition from the smaller players, although this is likely to be contested by the larger communications providers); and

Establishing a new code for disputes and complaints handling: creating a new code containing, for example, a requirement (i) to inform a customer proactively about how and when a complaint will be handled, and (ii) to provide certain information to customers who have made a complaint (e.g. the latest date following the closure/resolution of a complaint by which the customer can revert to the communications provider stating they remain unhappy). (Whilst the intention behind these changes is understandable, how readily they will operate in practice is questionable as different complaints may merit different responses that, in turn, may require different levels of resourcing which could be difficult for a communications provider to determine in advance. Again, communications providers are likely to resist some of these proposals).

All in all, whilst not a complete overhaul of the General Conditions of Entitlement, these changes are likely to represent a significant and – largely – much-needed makeover. It will be interesting to see if and how Ofcom takes into account the responses it receives from industry stakeholders.
Either way, Ofcom intends to publish a final statement on its proposals, in addition to the revised versions of the General Conditions, in the Spring of 2017.