Ref: 46/03
Date: 25 July 2003

The new UK and EU regulatory framework to promote the interests of the consumer in the electronics communications sector came into force today.

The new regulations should lead to more choice, better quality of services and lower prices for consumers through increased competition.

From today:

– all telecoms licences have been abolished, and replaced by a set of requirements on operators of electronic communications networks and the service providers that use them;

– the regulatory framework is extended to cover the converging communications services including interactive television, e-mail, text messaging and voice telecoms services; and

– current regulation that applies to specific companies will remain in place through a series of continuation notice published today, until the completion of Oftel's market reviews.

David Edmonds, Director General of Telecommunications said today:

"This is a major event as Oftel is putting in place a completely new regulatory framework for the UK communications sector. There are a number of significant changes, including the end of the current licensing regime for telecoms companies.

"Oftel has undertaken a huge amount of work over the past 18 months to ensure that the necessary changes are in place under the new EC framework for the regulation of electronic communications services.

"It is good news for consumers as the measures will encourage greater competition, leading to more choice and lower prices for telecommunication services.

"Businesses will also benefit as the new framework requires Oftel's actions to be consistent, proportionate and targeted only at cases where intervention is required. National regulators will work together to establish common approaches and remedies for regulation.

"The new framework enshrines much of Oftel's existing regulatory approach, and I am confident that we will be able to build on our past expertise when using the new framework.

"The new framework provides the basis for regulation by Ofcom when it assumes regulatory responsibility at the end
of 2003.

"Oftel is currently carrying out a series of market reviews under the new Directives, and until this work is complete in the Autumn, current regulation that applies to specific companies will remain in place.

"This includes the requirement on the four mobile network operators to maintain their 15 per cent reduction of call termination charges until the outcome of the necessary market review."

Stephen Timms, e-commerce Minister said:

"The Communications Act is the lynchpin to liberalising a market currently worth over £12 billion of investment a year.

"The four directives that come into effect today under that Act mark a gear change in delivering greater choice for consumers in an environment that thrives on competition and protects the diversity and plurality of our media.

"Oftel have played a vital role in helping the industry to deliver the conditions of growth and competition that are vital for the future of the communications sector."

Notes to Editors

1. The new framework that comes into force today is the result of implementation of four Directives:

Framework Directive - sets the overall framework that Oftel must take into account when making regulatory decisions. Market reviews must be carried out before regulation is imposed and regulation can only to be imposed where the market is not effectively competitive.

Authorisation Directive. Current licences are abolished and replaced with a number of obligations that will apply to all providers of networks and services, significantly streamlining the licensing regime.

Access and Interconnection Directive. Obliges operators to negotiate interconnection arrangements with each other and sets out responsibilities of regulators and the limits of their discretion to impose obligations related to access or interconnection.

Universal Service Directive. Sets out a procedure for designating providers of universal service and the minimum set of services that these operators must provide.

2. Implementation has been effected through the Communications Act 2003. All other member states are required to implement the new framework on the same date.

3. For further information contact the Oftel press office on 020 7634 8991.