Update on Forthcoming UK Electronic Communications Legislation

United Kingdom

Office of Communications Bill (OFCOM)

In October 2001 the UK Government introduced a Bill to create a new Office of Communications (OFCOM). The new UK regulator for what in the future will be the “Electronic Communications Sector will merge the responsibilities of the five existing regulators currently dealing with the regulation and licensing of the existing Telecommunications and Broadcasting Industries, namely;

OFTEL (Office of the Director General of Telecommunications)

The ITC (Independent Television Commission)

The Radio Authority (Broadcast Radio)

The Radio Communications Agency (Radio Frequency Spectrum Management and Licencing)

The Broadcasting Standards Commission

and will provide a “one stop shop for the regulation of broadcasting content, telecommunications, competition and radio frequency spectrum management and licensing in the UK. OFCOM is planned to be up and running by the end of 2003.

The OFCOM Bill is a “Paving Bill which allows the establishment by the Secretary of State of OFCOM as a body corporate. The Chairman and other Board Members appointed by the Secretary of State are empowered to carry out all initial functions necessary to facilitate the setting up of OFCOM as a regulator of communications e.g. incurring expenditure, appointing staff etc, However OFCOM is not empowered to borrow money other than from the Secretary of State.

The Paving Bill which was laid before Parliament for first reading in the House of Lords is currently in its Committee Stage in the House of Commons. It is expected to be passed as an Act of Parliament in Spring 2002.

Communications Bill

The functions and powers of OFCOM and the transfer of functions from the existing regulators etc, are to be contained in a separate “Communications Bill which is currently being drafted by Parliamentary Counsel.

It is likely that a draft Communications Bill will be available for public/industry consultation in Spring 2002. Following consultation the Bill is likely to be laid before Parliament in Autumn 2002 with a target date for the resulting Act to come into force in Spring/Summer 2003.

It is envisaged that the Bill will implement measures contained in the forthcoming package of EC Directives on  Electronic Communications which have recently been agreed and are due to be adopted by the European Parliament and Council in February 2002

The Bill is likely to contain a number of proposals with regard to

a)   The provision of electronic communications networks and service.

This will include the abolition of the existing regime of telecommunications licensing under the Telecommunications Act 1984 in favour of general authorisation. Specific conditions relating to inter alia Operators with Significant Market Power, and Universal Service Obligations will remain.

b)   Use of the radio spectrum 

Spectrum licensing will remain but the trading of spectrum between licence holders, currently prohibited, will be allowed (subject to Competition Law restrictions), to promote efficient use of unused capacity.

The UK government is shortly to publish the report by Professor Martin Cave outlining his recommendations for the future management of Spectrum in the UK.

c)   Broadcasting (TV and radio)

Licensing, content and programme standards.

d)   Consumer interests and competition functions

Matters in relation to which OFCOM will have competition functions e.g. the provision of electronic communications networks, services, apparatus and broadcasting and related matters. Functions under the Competition Act 1998, Fair Trading Act 1973 and Restrictive Trade Practices Act 1976.

The Electronic Commerce Regulations

The UK along with other EU Member States was required to implement the Directive on Electronic Commerce (2000/31/EC) by 16 January 2002.

The UK Government undertook an initial public/industry consultation on the implementation of the Directive in Autumn 2001. Regulations made under S.2(2) European Communities Act 1972 are currently being drafted and are likely to be released for consultation in Spring.

For further information please contact David Roberts by telephone on +44(0)20 7367 3678 or by e-mail at david.roberts@cms-cmck.com; or contact Richard Eccles by telephone on +44(0)20 7367 3996 or by e-mail at richard.eccles@cms-cmck.com.