“2016 promises to be a busy year for all those involved in the communications industry. There will be a focus on both the European Commission and Ofcom, as each pushes forward specific parts of their communications agenda.
At an EU level, we will see the Commission starting to put together formal proposals to bring to life its Digital Single Market initiative. And at a UK level, Ofcom will be pushing ahead with its strategic review of the UK digital communications market, which could see greater regulation in some areas and less in others. We will also see Ofcom – like the other national regulators in Europe – having to grapple with giving effect to the EU’s Net Neutrality Regulation, which comes into force in April 2016.”
John Davidson-Kelly, Partner, Osborne Clarke
30 April 2016 – Net neutrality
The EU Net Neutrality Regulation comes into force on 30 April 2016. It will impact on telecoms operators, internet service providers (ISPs) and those wanting to have their content distributed via the internet.
The Net Neutrality Regulation is designed to ensure that users have access to online content and services without discrimination or interference by ISPs. All internet traffic must be treated equally, subject to limited exceptions. This means that the ability of telecoms operators and ISPs to apply traffic management measures will be much more limited. Likewise, the ability to negotiate preferred speeds or quality of service deals will be limited to so-called “specialised services” whose delivery requires a guaranteed service level – think IPTV, connected cars, telemedicine and certain cloud services. Ofcom will be the body that enforces the Regulation within the UK.
This forms part of the EU’s wider reform of the EU telecoms regime, which includes the end of international roaming charges in June 2017.
2016 – Digital Single Market (DSM)
The DSM is a major initiative that will affect almost all digital businesses in the EU. It has the potential to impact on everyone, from traditional telecoms providers, over-the-top service providers (such as Skype and WhatsApp), platforms (such as Google, Facebook, Amazon, Airbnb and Expedia) and content providers (such as Netflix, Sky, and traditional broadcasters).
During 2015 the European Commission launched a number of consultations. 2016 seems to be the year the Commission uses the information gathered during these consultations to progress its legislative proposals, although due to various market developments (including Three UK’s proposed acquisition of O2 UK) the Commission has pushed back the date for releasing its proposal on telecoms reform from spring to September 2016.
On 9 December 2015 the European Commission published its first three legislative proposals under the DSM initiative:
- a directive on certain aspects of the supply of digital content;
- a directive seeking to harmonise contract laws for the online sale of goods; and
- a regulation for the reform of copyright and cross-border portability of online content, to allow consumers to access content whilst temporarily in another EU Member State.
These proposals aim to tackle what the Commission perceives as the main obstacles to cross-border e-commerce in the EU: the fragmentation of laws across the EU and lack of trust by consumers when buying online from another country. The Commission also believes that harmonising laws will reduce the cost of compliance for businesses.
These initiatives are priorities for the Commission and we are expecting draft texts to be prepared during 2016, although none of the changes are likely to take effect until 2017 at the earliest.
For more information, see our dedicated DSM hub here.
2016 – The balance of payments between television platforms and public service broadcasters
We are expecting the Department of Culture, Media and Sport’s (DCMS) conclusion on the regulation of the interaction between television platforms and public service broadcasters.
DCMS has questioned whether certain areas of regulation are still required, including:
- “must carry” and “must offer” obligations;
- Electronic Programme Guide regulations; and
- cable retransmission rights.
The consultation closed on 30 June 2015, but a date has not been published for the conclusion of the consultation.
2016 – Ofcom review of digital communications
Ofcom is currently engaged in a wide review of digital communications. The review is looking at all communications services, including fixed, mobile, and pay-TV services, and therefore has the potential to affect all players in the UK communications market.
The consultation document was published in July 2015. Ofcom published its initial conclusions on 25 February 2016. Ofcom’s final position is expected later in 2016.
The review is looking at a wide range of issues, including:
- specific wholesale market issues. Ofcom is likely to fall short of requiring BT Openreach to be splitout from the rest of the BT Group as a separate company;
- improvements across the industry in terms of mobile broadband coverage; and
- consumer-related issues, including ways to further consumer empowerment, such as increased transparency and automatic compensation for consumers when their communications service provider(s) fail to deliver.
2016 – Investigatory Powers Bill
The Investigatory Powers Bill has been the subject of fierce debate over recent months.
Among other things, it seeks to give enhanced powers to UK government agencies to request access to electronic communications in the UK. For example, communications providers will need to store records of websites visited by every person for 12 months (showing their browsing history but not specific items viewed on that page).
The Bill also seeks to enable security services to acquire bulk communications data (such as NHS health records), and to bypass encrypted services.
If enacted in its current format, this has the potential to place significant regulatory and financial burden on communications networks / providers to comply with the Bill.
A final vote on the Bill is expected in Parliament by the end of April. This could see the Bill come into effect before the end of 2016.
2016/2017 – Government Budget initiatives to support the digital economy
The government’s 2016 Budget announced a number of steps to be taken to support the growth of the UK’s digital economy. Providers of broadband will be particularly interested in the following:
- the government is to establish a new “Broadband Investment Fund”, in partnership with the private sector. The aim of the Fund is to ensure that financial assistance is more readily available to the private sector. This could be used to support growth of alternative broadband networks; and
- specific measures will also be explored jointly by Ofcom and the Advertising Standards Authority to look at making broadband more affordable and ensuring that prices (including price comparison tools) are clearer to users.
The government also intends to deliver a 5G strategy in 2017 to look at how the UK can become a world leader in 5G. Spectrum-related measures that will free up more of the spectrum currently used by the public sector have also been included in the government’s Budget agenda.