The new EC Regulatory
Framework was implemented on 25 July 2003. The basis for the new
regulatory framework is five EC Communications Directives that are
intended to converge and harmonise communication regulation throughout
the EC. The first four of the five Directives below were implemented
by the Communications Act 2003. The fifth is being implemented separately
in the Autumn of 2003 .
legal documents of the new framework are:
2002/19/EC - on access to, and interconnection of, electronic
communications networks and associated facilities (the Access Directive);
2002/20/EC - on the authorisation of electronic communications
networks and services (the Authorisation Directive);
2002/21/EC - on a common regulatory framework for electronic
communications networks and services (the Framework Directive);
2002/22/EC - on universal service and users' rights relating
to electronic communications networks and services (the Universal
Service Directive) and;
2002/58/EC - concerning
the processing of personal data and the protection of privacy in
the electronic communications sector (the Privacy Directive).
Directive provides the overall structure for the new regulatory
regime and sets out the policy objectives and regulatory principles
that NRAs must follow. It also requires that market analyses be
carried out before regulation is imposed. The Authorisation Directive
establishes a new system whereby persons do not require prior authorisation
before providing electronic networks and services. It includes provisions
relating to enforcement of conditions and the specific obligations
which can be imposed. The Universal Service Directive deals
with the obligation to provide a basic set of services to end-users.
The Access Directive sets out the terms on which providers
may access each others’ networks and services with a view to providing
publicly available electronic communications services. Finally,
the Privacy Directive establishes users’ rights with regard
to the privacy of personal data.
of the EC package are:
2002/77/EC - Competition in the markets for electronic communications
2887/2000/EC - on
unbundled Access to the Local Loop
2002/C 165/03 - on
Market Analysis and the calculation of Significant Market Power
2003/C 497/EC - on
Relevant Product and Service Markets
2002/627/EC - establishing
the European Regulators Group for electronic communications, networks
on a regulatory framework for radio spectrum policy in the European
Community (Radio Spectrum Decision)
- on Article 7 notifications
of standards - and/or specifications for electronic communications
networks, services and associated facilities and services under
Article 17 of the Framework Directive
- on the minimum set of leased lines with harmonised characteristics
and associated standards referred to in Article 18 of the Universal
2003/558 - on the processing of caller location information
in electronic communications networks for the purpose of location-enhanced
emergency call services
from the previous regime
The new regime
has some significant changes from the old. The principal ones which
relate to telecommunications are:
- The existing
licence regime is abolished and replaced by a general authorisation
regime with general conditions of entitlement (that is, conditions
which apply to all) and specific conditions (that is, conditions
which apply to individuals); (Frequently asked questions about
general conditions can be found below.)
- NRAs may
only impose ex-ante controls on individual operators determined
as having significant market power (SMP) following a review of
the relevant market;
- The definition
of SMP has changed and is now explicitly linked to the competition
law concept of dominance;
- Appeals against
NRA decisions may now be on both merits and process (previously
on process only);
between operators which are referred to the NRA for settlement
must be resolved by the NRA in four months (previously six months);
- There’s an
explicit goal of harmonisation in the new framework.
must work together with the Commission and other NRAs in the
European Regulators’ Group (ERG) to establish common approaches
analysing markets NRAs must take full account of the Commission’s
Recommendation on market definition and on market analysis and
assessment of SMP; and
must notify the Commission on the outcome of market analyses
and the Commission has the power to veto certain decisions.
information on the new EC Communications Directives and Oftel's
implementation see: .
will apply on 25 July 2003
and Consultation documents
asked questions (FAQs) by service providers about the new regulatory
– tel: 020 7634 5306 or e-mail
The New Framework
- There are
four EC Directives on communications (the ‘Directives’):the Framework
Directive (2002/21/EC), the Authorisation Directive (2002/20/EC),
the Universal Service Directive (2002/22/EC) and the Access and
Interconnection Directive (2002/19/EC). They came into force in
April 2002 and had to be implemented by the Member States by 25
- In the UK,
implementation will occur mainly through the provisions of the
Communications Act 2003 (the ‘Act’) http://www.hmso.gov.uk/acts/acts2003/20030021.pdf
, which received Royal Assent on 17 July 2003, in particular Part
2 of the Act (Networks and Services).
- In other
areas, the Act goes beyond the provisions of the Directives eg
regulation of premium rate services and SMP apparatus conditions.
- The rights
and obligations created by each of the Directives, and their implementation
in the Act, are briefly outlined below.
a harmonised framework for the regulation of electronic communications
services (ECSs), electronic communications networks (ECNs) and
associated facilities (AFs). It lays down tasks for National Regulatory
Authorities (NRAs) and establishes procedures to ensure the harmonised
application of the regulatory framework throughout the EC.
- In the UK,
it is intended that Ofcom will be the new NRA for the purposes
of the new Directives. However, Ofcom will not be ready to assume
these functions and duties until later this year. Until that time,
the Secretary of State has ordered that the Director General of
Telecommunications (the Director, or Oftel) will be the NRA for
the purposes of the new Directives. Oftel is able to act under
the provisions of the new Communications Act 2003.
- Oftel’s decisions
under Part 2 of the Act are appealable to the Competition Appeals
Tribunal on the merits (sections 192ff). Sections 135-145 enable
Oftel to require information for the purposes of carrying out
- Section 4
imposes a duty on Oftel to act in accordance with six Community
requirements set out in the Framework Directive.
- Other requirements
of the NRA under the Framework Directive include management of
radio frequencies (implemented by Chapter 2 of Part 2 of the Act:
spectrum use, sections 152-184); controlling the assignment and
management of numbering (implemented by sections 56-63 of the
Act); and market definition and analysis (implemented by sections
- NRAs must
also make provisions for dispute resolution between undertakings,
which has been implemented by Part 2, Chapter 3 of the Act (sections
185-191), including the imposition of a new 4 month deadline for
resolution by the NRA, and the option of making provisions for
use of alternative dispute resolution (ADR).
2002/20/EC. The Authorisation Directive requires the abolition
of licences, to be replaced by a general authorisation to provide
ECNs, ECSs and Afs. Persons providing ECNS or ECSs are called
‘communications providers’ in the Act.
- Because of
the way in which the UK legal system works (ie you are permitted
to do anything which you are not prevented from doing), every
person has a ‘general authorisation’ because they are not prevented
by law from providing an ECN, ECS, or AF. There is no specific
provision in the Act enabling persons to provide networks and
services, and no communications provider will be given a ‘general
authorisation’ in the way that they were previously given a licence
to run telecommunications systems.
- The general
authorisation may be subject to requirements to provide advance
notification to the NRA, to pay administrative charges to the
NRA, to comply with general and specific conditions, to comply
with the electronic communications code and to provide information
to the NRA. In practice, Oftel does not currently intend to use
its power to require advance notification from communications
providers, although it will be collecting administrative charges
from those communications providers that meet a certain threshold
of ‘relevant turnover’, in order to pay for its running costs.
Oftel will be issuing a formal notice, which will require communications
providers who have a turnover from networks or services
of £5million or more to provide Oftel with details of turnover
so that it can assess administrative charges.
- All communications
providers are subject to the general conditions, although different
classes of provider will have different obligations. Part A of
the Annex to the Authorisation Directive lists the types of general
condition which may be imposed on communications providers. Oftel
has set the new general conditions in accordance with this and
sections 45 to 64 of the Act, http://www.oftel.gov.uk/publications/eu_directives/2003/cond_final0703.pdf
- The general
conditions fall into the following broad categories: network/service
integrity and operability; encouragement of access and interconnection;
‘universal service’ including use in emergencies; consumer protection;
and allocation and adoption of numbers.
- The Authorisation
Directive also provides that specific obligations may be imposed
on providers of ECNs and ECSs: NRAs are permitted to make specific
conditions in relation to universal service, access and significant
market power (SMP). These provisions are implemented by sections
65 – 72 of the Act (universal service conditions), sections 73
to 76 of the Act (access-related conditions) and sections 87 to
92 of the Act (SMP services conditions).
- Oftel is
currently undertaking various market reviews in order to ascertain
whether to impose new specific SMP conditions. Draft measures
covering new SMP conditions are to be notified to the European
Commission after 25 July 2003 under Article 7(3) of the Framework
Direction. Subject to the Commission’s power to veto, the earliest
that these new SMP conditions will be in place will be September.
To avoid a regulatory gap due to the abolition of licences, some
pre-existing licence conditions are being continued. Further details
in respect of the continuation regime can be found at http://www.oftel.gov.uk/publications/eu_directives/cont_notices/index.htm.
- Article 10
of the Authorisation Directive covers enforcement powers and allows
the NRA to impose financial penalties. The Act provides powers
for Oftel to enforce the general and specific conditions (see
sections 94-104). In particular, section 97 provides for the ability
to impose financial penalties of up to 10 per cent of turnover
for breach of any conditions made under section 45.
Service Directive (‘USD’)
- The USD defines
a minimum set of services of specified quality which are to be
made available to all users at an affordable price, regardless
of their geographic location and in the light of specific national
- On 25 July
2003, the Universal Service Order made by the Secretary of State
comes into force, setting out the universal services that need
to be provided in the UK in order to comply with the USD http://www.legislation.hmso.gov.uk/si/si2003/20031904.htm.
- The services
and facilities covered by the USD and the Universal Service Order
include the provision of access to the public telephone network
and publicly available telephone services at data speeds sufficient
to support functional internet access; the adequate provision
of public pay telephones; the availability of comprehensive directories
and directory enquiry services; and special measures for users
with low incomes or disabilities.
- Oftel must
ensure the availability of the services and facilities set out
in the Universal Service Order by setting general and specific
conditions. Oftel has set new specific universal service conditions
in accordance with the Universal Service Order and sections 65
to 72 of the Act. These conditions will came into effect on 25
July 2003, together with an associated direction relating to the
removal of public payphones http://www.oftel.gov.uk/publications/eu_directives/2003/uso0703.pdf.
- In the UK,
Oftel has proposed that BT and Kingston should be designated as
the universal service providers. But Oftel has also recommended
that Ofcom should conduct a full review of universal service in
2004, including a review of the funding of the provision of universal
17-19 of the USD give NRAs the ability to impose regulation on
providers with SMP in certain retail markets, including regulation
relating to carrier pre-selection and leased lines. These provisionsare
implemented in the Act by sections 90 to 92 relating to the setting
of SMP conditions.
- The USD requires
some form of dispute resolution to be available for individual
customer complaints. Under sections 52 to 55 of the Act, Oftel
has the power to approve industry schemes and has invited applications.
The Telecommunications Ombudsman, which currently provides a free
and efficient service, is likely to be approved, but Oftel also
has fall-back powers to establish its own scheme or approve any
others. Further information on the Telecommunications Ombudsman
can be found at http://www.otelo.org.uk/website/html/content.php?ID=1.
- The Access
Directive harmonises the way in which Member States regulate access
to ECNs, ECSs and AFs (access is a concept which includes interconnection).
It establishes rights and obligations for communications providers
seeking interconnection and/or access to networks, services and
associated facilities of other communications providers.
- The Access
Directive allows for the imposition of specific obligations on
individual communications providers in certain situations, for
example where they have been found to have SMP as a result of
a market review. These provisions have been implemented in the
Act by sections 73 to 76 and 78 to 92, which allow for the setting
of access-related conditions, and SMP services conditions following
- The Access
Directive requires that certain obligations be imposed on communications
providers controlling conditional access to digital television
and radio services. Oftel has set new conditional access conditions
in accordance with these provisions and section 75 of the Act
8 - 13 of the Access Directive set out a maximum list of obligations
that can be imposed on communications providers found to have
SMP in wholesale markets including obligations relating to network
access, transparency, cost orientation,price control, and accounting
- Oftel is
in the process of conducting and finalising reviews of various
communications markets, based on the list of markets set out in
the EC Commission’s Recommendation,, in order to ascertain which
providers have SMP in those markets and should be subject to new
- Article 5
of the Access Directive allows for the imposition of specific
access related obligations in limited circumstances, but without
the necessity of holding a market review and finding SMP. These
provisions have been implemented by sections 73 to 76 of the Act,
and Oftel is likely to use them to impose obligations on persons
controlling access to application programme interfaces (APIs)
and electronic programme guides (EPGs), as well as obligations
with respect to national roaming on mobile networks. Like the
SMP conditions, any such conditions will be subject to consultation
with stakeholders and the EC Commission. They are therefore unlikely
to be set until September at the earliest.
general conditions of entitlement
conditions are a set of rules which will apply to the provision
of an electronic communications network or an electronic communications
service from 25 July 2003, which is the implementation date for
the new EC Communications Directives. These new Directives require
the abolition in the UK of the current telecommunications licensing
regime. Licences are to be replaced by a regime of general authorisation
to provide electronic communications networks and services coupled
with general and specific conditions. The general conditions will
apply to all network and service providers (or all network and service
providers of a particular type), whereas the specific conditions
will be imposed on individuals, for example those with significant
market power or designated universal service obligations.
an ‘electronic communications service’ or ‘electronic communications
have strict legal definitions in the new EC Directives and the Communications
Act. In general terms, an electronic communications service is a
conveyance service for signals, for example a fixed or mobile telephone
service. An electronic communications network is a transmission
system used for the conveyance of signals, for example a telephone
network or an IP data network (used for the transmission of data
signals e.g. emails).
enter into force on 25 July 2003 by virtue of the publication of
a notification by the Director under section 48(1) of the Communications
Act. The conditions may be modified in future, but only after a
consultation in accordance with the procedures set out in the Act.
The Director will enforce the conditions, until Ofcom is ready to
assume full functions later this year.
companies will the new general conditions cover?
Under the new
Directives and the Communications Bill, general conditions may be
set which apply to anyone providing an electronic communications
network or an electronic communications service. However, most of
the general conditions proposed in the consultation document are
drafted so that they only apply to a limited set of network or service
provider, for example providers of publicly available telephone
services or providers of public electronic communications networks.
It will be the responsibility of all providers of electronic communications
networks and services to read the general conditions and determine
which conditions apply to them, depending on the kind of network
or service they are providing. To assist, Oftel has produced guidance
aimed at service providers (see http://www.oftel.gov.uk/publications/eu_directives/2003/spfaq0503.htm
) and ISPs (see http://www.oftel.gov.uk/publications/eu_directives/2003/ispfaq0303.htm
terms, what are the main differences between this and the old system?
And what differences could this mean for consumers?
The main difference
is that all communications providers will only need to look to one
set of general conditions to ensure they are complying with the
law. There will not be different ‘licences’ containing different
conditions any longer. This also means that communications providers
are responsible for ascertaining which of the general conditions
applies to them and their operations – they will not be issued with
a personal licence which sets out their obligations. The obligations
themselves are similar to those contained in current licences, although
they have been redrafted in line with the new EC Communications
Directives and the Communications Act. The new general conditions
ensure that all communications providers provide a basic level of
consumer protection. By looking at the general conditions, a consumer
will be able to gain an understanding of their rights as against
a communications provider, for example, what they may require in
their contracts, termination and disconnection rights, and itemised
have been found to have Significant Market Power (SMP) as a result
of a market review may be subject to further specific conditions
which will apply in addition to the general conditions. Oftel is
currently undertaking the process of market reviews to determine
which companies should be subject to these specific conditions under
the new regime. These will be the subject of separate Oftel consultation.
mean you are relaxing regulation?
are obligations which apply to telecommunications systems operators
at present which will not be carried forward into the new regime,
it is more accurate to say that the general conditions represent
a simplification and application of appropriate regulation. One
set of general conditions applicable to all will provide a more
streamlined and transparent regime for current and new operators
and service providers.
companies will be required to negotiate interconnection under the
A company which
provides a public electronic communications network will be required
to negotiate interconnection with other such companies. Oftel has
produced further guidance on this aspect of the new regime: http://www.oftel.gov.uk/publications/eu_directives/2003/intercon0503.htm
happen after the Directives come into force but before Ofcom is
the Communications Act 2003, the Director will be responsible for
setting and enforcing the general conditions until the formal ‘hand
over’ to Ofcom, expected later this year.
be able to fine companies in that period?
Yes – new powers
allow the Director to impose a penalty of up to 10% of turnover
upon a company or individual for breach of a general or specific
used its powers to fine companies?
only has powers to fine companies under the Competition Act – not
for breach of a licence condition.
still have Competition Act powers?
Yes – Part 5
of the Communications Act sets out where Ofcom will share Competition
Act powers with the Office of Fair Trading.
Government have to approve the conditions that Oftel has drafted?
the other industries that will come under Ofcom - how will they
The new framework
required by the EC Directives is intended to apply electronic communications
networks and services providers, which will include some companies
using radio spectrum under licence or exemption from the Radiocommunications
Agency, and also some broadcasters. Further details on how the new
Directives will effect the regulation of radio spectrum can be found
on the RA’s website www.radio.gov.uk.
The new Directives do not apply to the provision of content, only
conveyance, and the networks over which such conveyance occurs.
give an example of a communications network operator/service provider
that won't need to meet all the general conditions? Which ones will
they still need to meet?
of the general conditions have a consumer protection focus, most
of them only apply where a communications network or service is
being provided directly to the public. However, the following obligations
will apply to all providers of electronic communications networks
and services in the circumstances set out in the draft condition:
and Specified Interfaces;
- General Access
and Interconnection Obligations (confidentiality requirements
where negotiating network access); and
- The obligations
in the numbering conditions (where adopting or using telephone
conditions are drafted so as to apply only to subset of network
or service provider, such as
of public electronic communications networks (General Access and
Interconnection Obligations, Must Carry Obligations (for broadcasters));
of public telephone networks (Proper and Effective Functioning
of the Network, Provision of Additional Facilities, Emergency
of public electronic communications services (Requirement to Offer
Contracts with Minimum Terms, Quality of Service, Codes of Practice
and Dispute Resolution, Metering and Billing);
of publicly available telephone services (Transparency and Publication
of Information, Operator Assistance, Directories and Director
Enquiry Facilities, Emergency Call Numbers, Non-Payment of Bills,
Special Measures for End-Users with Disabilities, Itemised Bills,
Emergency Planning, Proper and Effective Functioning of the Network);
of public pay telephones (Public Pay Telephones).
the type of network or service that is actually being provided,
and the circumstances in which such provision is taking place, a
network operator or service provider may need to meet some, all
or none of the general conditions. It will be the responsibility
of the individual network or service provider to determine when
their activities fall within the scope of any obligation imposed
by a general condition.
that an ISP has to meet will be different from the ones a network
operator has to meet. In what ways will they vary?
To the extent
that an ISP is providing electronic communications services to the
public, they will have to meet the obligations that apply to the
provision of such services (e.g. Requirement to provide Contracts
with Minimum Terms, Codes of Practice and Dispute Resolution, Metering
and Billing). If the ISP is also running a network they will also
be subject to relevant obligations. Further information for ISPs
can be found at http://www.oftel.gov.uk/publications/eu_directives/2003/ispfaq0303.htm
Oftel/Ofcom ensure that operators are meeting the conditions? Will
you check or simply wait for someone to complain?
will be entitled to require information from operators with respect
to their compliance with the conditions where Oftel/Ofcom suspect
that a contravention has occurred. In general, this will mean that
a complaint will be received leading to an investigation. However,
Oftel/Ofcom can initiate their own investigations of they consider
that there may be a breach. If a breach is discovered, Oftel/Ofcom
then may take enforcement action.
information posted here is intended to be helpful and informative
but needs to be read with the understanding that the information
is general in nature. This information cannot be taken as applying
absolutely to individual cases where a particular set of circumstances
needs to be taken into account. This information can not act as
a substitute for specific legal advice. Any person requiring legal
advice in relation to the new regime is advised to seek their own
independent legal advice. This information does not fetter the discretion
of the Director General of Telecommunications or Ofcom to resolve
any dispute or investigate any matter to which this information