The UK communications regulator has published (27 October 2020) a statement that assesses telecom industry responses to recent consultations and confirms the changes it will enact in new regulations that give effect to the provisions of the Directive (EU) 2018/1972.
Ofcom's new rules establish the European Electronic Communications Code (EECC) into its General Conditions of Entitlement, which providers of electronic communications networks and services must comply with if they want to provide services in the UK.
One of the aims of the EECC was to improve fairness for end-users when buying and using broadband, mobile, pay TV and landline phone services. Ofcom's statement, which follows consultations launched in December 2019 and July 2020, confirms how many end-user protections will apply in the UK and signifies a major change in the scope of the rules.
The rules, which previously applied only to consumers, now extend to all sizes of business customer, including large enterprise customers. This will require communications service providers (CSPs) to undertake system changes to ensure compliance, which could have a significant impact on them amid the Covid-19 pandemic. Businesses will need to understand the impact of these changes on their activity, and set aside budget and time over the next 12 months to ensure compliance on time.
Ofcom has listened to feedback from respondents on the implementation period and the impact of the Covid-19 pandemic. Previously, the regulator indicated that a maximum of 12 months would be given to CSPs to implement the rules, but has confirmed that the period will now vary between 12 and 24 months from 21 December 2020 depending on the rule and the significance of the changes. Although this will be welcomed by industry, the implementation timelines could be challenging for some.
Confirmed new rules
From 27 October 2020:
From 21 December 2021:
From 21 June 2022:
From 21 December 2022:
A summary of the key rules changes are:
The EECC brings in changes to how an electronic communications service is defined, which are broader than before, and include:
- internet access services, for instance, broadband;
- interpersonal communications services, which in turn has two sub-sets of number-based and number-independent (NI-ICS);
- conveyance services (such as transmission services for broadcasting and machine-to-machine communication services).
Due to the government deprioritising the implementation of end-use protections for NI-ICS, these services are not included within scope of the General Conditions. In most cases the end-user protections will not apply to machine-to-machine services, but the new end-user protections will in some cases, as described above, apply to a broader range of service than before. Each General Condition states, at its start, the type of service and the type of customer that the rules apply to, which is a helpful way to determine how the rules will apply to each service a communications service provider makes available.
One of the more controversial requirements in the EECC is the application of end-user protections to other goods (for example, mobile handsets) and services that are sold as part of a bundle with a communications service. Ofcom has confirmed the scope of the rules that will apply to bundles and has provided more certainty over what type of goods and services would be considered as a "bundled" good or service for the purpose of the General Conditions. Many of the new and updated end-user protection rules will apply to all aspects of a bundle, such as the right to exit for contract changes, end of contract and annual best tariff notifications, and maximum contract.
Ofcom has included a definition of "bundle" which is narrower than the EECC recital and provides more clarity to communications service providers. The definition will now only capture equipment and services that are most relevant and closely related to telecoms, such as information society services, content services, and related equipment including handsets and routers.
Business customer definitions
Ofcom has confirmed it will implement its proposals from its July 2020 consultation in relation to how "microenterprise", "small enterprise" and "not-for profit customers" will be defined:
- There will be no financial threshold in the definition of microenterprise and small enterprise customers.
- The threshold for small enterprises will be reduced down to 10 staff members or volunteers.
- The definitions of small enterprise and microenterprise will be consolidated into a single definition.
- The definition of a not-for-profit organisation will include a staff headcount threshold of 10 staff members (although this does not include volunteers).
Under the Withdrawal Agreement, the UK is obliged to implement EU directives until the end of the transition period on 31 December 2020. As the EECC must be implemented by 21 December 2020, this falls within the transition period. Ofcom will be under an obligation to implement the EECC. Most of the end-user protections are subject to "full harmonisation", which requires Members States to implement the applicable rules in full and prevents any more or less stringent rules being implemented.
There has been significant calls from industry on Ofcom to exercise a proportionate and selective approach to the implementation of the EECC and certain end-user protections in particular. However, Ofcom has confirmed that it will implement the provisions in full to ensure compliance with the terms of the Withdrawal Agreement.
Taking into account the fact that the transition period would end at the end of 2020, Ofcom was also called on to review the approach to EECC implementation immediately. However, Ofcom has said that it will not commit to a review of the General Conditions following the end of the transition period as this would create significant regulatory and legal uncertainty for both customers and providers.
The message from Ofcom is clear: the new rules must be implemented by CSPs and will only be reviewed if market developments or fresh evidence show that a particular requirement is imposing an unnecessary burden, in line with its usual practice.
Many of the new rules will require changes to internal processes, changes to the sales process as well as internal system changes. The staggered implementation timeframe from Ofcom should help CSPs manage this, but, as businesses are planning budgets and business and IT change programmes for 2021, these changes should be factored in.
Many of the end user protections that are being introduced will also apply to small businesses and not-for-profit customers for the first time. In some situations, there is an ability for small businesses and not-for-profit customers to expressly waive their rights.
However, this will involve additional processes and record-keeping to monitor consent. A gap analysis should be undertaken by CSPs to assess which of the end-user protections will apply to each category of customer and type of service that they provide.
Ofcom is now also consulting on minor consequential changes to the General Conditions, Metering and Billing Direction and Numbering Plan until 30 November 2020.
Further implementation of the EECC is also required, in addition to the end-user protections, and Ofcom intends to publish a final notification containing all of the revisions to the General Conditions prior to the 21 December 2020 implementation deadline.
Full details of Ofcom's statement and consultation are available on Ofcom's website.