Out-Law News 1 min. read

Ofcom to conduct 'overarching review of the UK’s digital communications'

The UK's telecoms regulator has launched an "overarching review of the UK’s digital communications" in a move aimed at future-proofing investment and competition in the market.

The review (9-page / 71KB PDF) will encompass a look at both digital communications infrastructure and the services provided over those networks, Ofcom said. Its aim is to ensure that there is "good outcomes" for consumers and businesses on issues such as network and service coverage, choice, price and quality, it said.

Ofcom said the review will look to ensure telecoms companies have the incentive to invest in their infrastructure and to innovate and flesh out future competition policy in the market. It will also look to identify whether there are opportunities for deregulation.

"Increasingly networks are providing connectivity, with many services delivered ‘over the top’," Ofcom said. "Internet players such as Skype and WhatsApp already deliver a wide range of voice, video and messaging services over broadband. Most of the UK’s fixed network operators now have plans to emulate these internet players, by delivering services over their broadband networks and eventually switching off their traditional voice networks. At the same time, companies continue to undertake targeted investment in new networks where the economics work."

"Given this, what is the scope for deregulating those networks and services which are downstream of any ‘enduring bottlenecks’, and relying instead on competition to deliver good consumer outcomes?" it said.

Ofcom's review will be split into two stages, with an initial phase focused on gathering views from industry and other stakeholders on issues such as the demand for and use of communications services, existing business models and strategies of communications providers, new technologies and network convergence and existing regulatory remedies to competition concerns.

The second stage of the review will involve an analysis of the views received and initial proposals on what action to take. Ofcom said it intends to set out its "initial views and any next steps by the end of 2015".

Competition law expert Guy Lougher of Pinsent Masons, the law firm behind Out-Law.com, said: "This is an extremely important review for the sector and its outcome is likely to lead to further action. If a view develops that further competition or material changes are needed in the sector, then ultimately a possible outcome could be a market investigation reference to the Competition and Markets Authority (CMA), similar to the reviews currently underway by the CMA in the energy and banking sectors." 

Last month Lougher and colleague Sammy Kalmanowicz highlighted the CMA's likely increased focus on competition and consumer protection issues in online and digital markets in the coming months.

Already this year the CMA has opened separate fact-finding probes on the commercial use of consumer data and the use of online reviews and endorsements.

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