Out-Law News 4 min. read

Telecoms rules must support investment in digital infrastructure and not burden businesses, says UK government

Telecoms regulations should not "create burdens" for businesses looking to invest in the next generation of digital communications infrastructure, the UK government has said.

The Department for Culture, Media and Sport (DCMS) issued the warning in a document that sets out the UK government's views and priorities for reforms to the EU electronic communications regulatory framework (9-page / 291KB PDF). The document comes after the European Commission launched an overarching review of EU telecoms regulations last month.

DCMS said the electronic communications market has seen "significant changes" since the last time the regulatory framework for the market was opened up for review in 2007, including an increase in consumers' expectations of electronic communication services, and the increase in use in, and advancement of, mobile technologies.

"Users are now increasingly seeing connectivity as a right, rather than a privilege," DCMS said. "They commonly expect to have the freedom to be connected and to access services and applications, wherever they are and whenever they want, at all times. The willingness of consumers to pay for communications services may not necessarily rise with their expectations and so this is a real investment challenge to industry."

"This challenge is intensified by the costs associated with developing new technologies; the emergence of new, non-­traditional players delivering electronic communication services; and changes in market structures across Europe. Within this context, the regulatory framework needs to support industry to make the necessary investments in our digital communications infrastructure, rather than create burdens on public finances or on the businesses investing in infrastructure. Deregulation should therefore be the starting point for this review," it said.

The UK government wants to see EU a regulatory framework for electronic communications that "supports investment and innovation, and accommodates changes in technology and market structure" and which recognises that competition is "the most effective way to deliver the desired outcomes", DCMS said. The framework must also aid the "deployment of communication networks that meet the needs of users over the next decade" and provide for "an acceptable level of connectivity" for every person, it said.

The regulatory regime should also be one which "empowers and protects consumers through greater transparency and awareness of services and safeguards consumer privacy and use of their data", and provide EU countries with freedom to "place appropriate obligations on service providers" for national security reasons, it said.

DCMS said the European Commission should look to avoid increasing the regulation facing 'over the top' (OTT) communication providers, echoing views expressed by UK culture minister Ed Vaizey last month. Instead, the Commission should focus efforts on reducing the regulatory burdens for traditional telecoms operators facing competition from the OTT providers, where possible, it said.

"Changes in technology will create winners and losers, but new regulation should not be used to shield companies from the competition of legitimate, more popular alternatives and the Commission should use the existing competition framework effectively where there is evidence of market abuse," DCMS said. "The Commission should also make the distinction between regulation of infrastructure networks and the regulation of communication services, reflecting that OTT service providers have no control over the infrastructure upon which they rely."

"Creating a transparent and competitive market should not automatically mean extending regulation to all over the top services… It should be possible to explore a deregulatory approach where this does not harm consumer interests or hinder member states’ ability to protect public security by placing obligations on services. Where users now consider OTT services to be close substitutes for traditional electronic communication services, deregulation of those traditional services could reduce the financial and regulatory burden on the telecoms industry at a time where the Commission and member states are looking for significant levels of investment in infrastructure and services," it said.

DCMS also said that reforms to EU data protection rules currently in the pipeline could afford EU law makers the chance to streamline EU e-privacy rules. The Commission has previously said it will look to update the existing Privacy and Electronic Communications Directive once the new General Data Protection Regulation has been finalised.

DCMS said: "Due consideration needs to be given to the impending changes to the Data Protection Regulation and the extent to which the e-­Privacy Directive needlessly repeats or creates additional and disproportionate burdens to the protection afforded by the Data Protection Regulation. In particular, we need to be mindful of any changes to consent of personal data and of the proposed differences in reporting breaches and these should be harmonised where possible. This is likely to be even more critical should the Commission suggest a Regulation rather than a Directive, which we do not believe to be necessary."

DCMS' document also addressed the issue of spectrum use and allocation. The UK government and the European Commission have a shared "desire to achieve more effective spectrum management", but the Commission should not force EU countries to allocate spectrum for use in a coordinated fashion through legislation, it said.

"In general, spectrum allocation should be achieved through non­binding means, with potential for improving cooperation between member states by enhancing the role of the existing EU spectrum management advisory group (RPSG)," DCMS said. "We do not believe there is a need for common and coordinated assignment conditions for wireless broadband to support fixed and wireless convergence."

"A mandatory approach risks unanticipated impacts on member states that result in excessive costs and will have implications for industry as well ­– member states will seldom be in identical positions, meaning a need in some cases for costly remediation of services. Furthermore, some of these differences arise from the physics of radio transmission in the different geographies of different member states: the presence of hills, mountains, trees and rain all impact on radio transmissions at some frequencies," it said.

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