Clause 102: Application of the electronic communications code

237.     Clauses 102 to 115 and Schedule 3 amend the telecommunications code (set out in Schedule 2 to the Telecommunications Act 1984) in order to translate it into a code applicable to apparatus used in electronic communications networks and services. The telecommunications code is designed to facilitate the installation and maintenance of telecommunications systems. It confers rights on operators to install and maintain apparatus in, over or under land and results in considerably simplified planning procedures, similar to those given to other utilities. These provisions, along with Schedule 2 to the Telecommunications Act 1984, implement Articles 11 and 12(1) of the Framework Directive, and Article 4(1) of, and condition 5 of Part A of the Annex to, the Authorisation Directive.

238.     Clauses 102 to 115 provide that "the electronic communications code" (as it will in the future be known) will no longer be applied to operators by way of licence (and licence conditions), but rather as a result of directions given by OFCOM in response to applications by individual providers of electronic communications networks or systems of conduits to be used for the provision of electronic communications networks. The principal changes to the code which will be effected under Schedule 3 include the replacement of references in it to telecommunications apparatus, services and systems with references to electronic communications apparatus, services and networks respectively; amendments to enable the application of the code to persons who provide a system of conduits by which an electronic communications network may be provided, but do not actually provide the network; and the addition of a provision to encourage the sharing of apparatus by operators to whom the code applies (which was previously contained in sections 10(3A), (3B) and (3C) of the Telecommunications Act 1984 and section 189 of the Broadcasting Act 1990).

239.     Clause 102 provides that the electronic communications code will apply to any person in respect of whom OFCOM has given a direction for this purpose. Subsection (5) provides that such a direction may specify that the code is to apply to the person concerned only in relation to particular places, or particular networks or parts of networks or particular conduit systems or parts of conduit systems.

240.     Subsection (3)(b) provides that the electronic communications code will also apply to the Secretary of State or any Northern Ireland department if either of them is providing or intends to provide an electronic communications network.

241.     Subsection (4) provides that the code may only be applied to a person for the purposes of the provision of an electronic communications network or for the purposes of the provision of a system of conduits to be used in connection with the provision of an electronic communications network.

242.     Paragraph 11 of Schedule 18 provides that where, immediately before the coming into force of this clause, the code applied to any person by virtue of the conditions of his telecommunications licence, that person shall be treated, after the coming into force of this clause, as a person in whose case the code applies by virtue of a direction given by OFCOM.

Clause 103: Procedure for directions applying code

243.     This clause provides that OFCOM may only give a direction applying the code in response to an individual application for this purpose, and specifies the procedures that apply to such applications. Subsection (2) provides that applicants must comply with all requirements as to form, content and manner of application as have been set out by OFCOM in a notification.

244.     In deciding whether or not to give a direction applying the code OFCOM, in addition to their general duties and their duties for the purpose of fulfilling Community obligations under clauses 3 and 4 respectively, must have regard to a number of factors, including the benefit to the public; the difficulty of providing the network or service without the code; the need to encourage shared use of apparatus; and whether the applicant has sufficient resources to meet any liabilities that may arise as a result of action taken by him under the code.

245.     Subsections (6) to (10) lay down the procedures that OFCOM must follow when they propose to give a direction applying the code. These include obligations to publish a reasoned statement of the terms of their proposal, and to allow at least one month for representations to be made by persons likely to be affected. This implements Article 6 of the Framework Directive.

Clause 104: Register of persons in whose case code applies

246.     Clause 104 places OFCOM under a duty to keep an up-to-date public register of persons to whom the code applies and to record in this register every direction given under clause 102. OFCOM must publish (and comply with) a notification setting out the hours during which this register will be open to the public and the fees for inspection.

Clause 105: Restrictions and conditions subject to which code applies

247.     The Secretary of State, following consultation with OFCOM and others may, by regulations, make the application of the code subject to restrictions and conditions. In making such regulations, the Secretary of State must consider OFCOM's general duties and their duties for the purpose of fulfilling Community obligations. She must also consider the environment, road-traffic management, the need to encourage the sharing of apparatus and the need to ensure that the provider will be able to meet any liabilities incurred due to the imposition of the code.

Clause 106: Enforcement of restrictions and conditions

248.     This clause gives OFCOM powers of enforcement in respect of the restrictions and conditions subject to which the electronic communications code applies. Where it appears to OFCOM that a person to whom the code applies is or has been in breach of any condition or restriction subject to which the code applies, they are obliged to notify that person accordingly and to allow him a specified period of time (usually one month) in which to make representations to OFCOM and to take steps to comply with the condition or restriction or to remedy the breach. This clause and clauses 107 to 109 implement Article 10 of the Authorisation Directive in the context of the enforcement of those restrictions and conditions.

Clause 107: Enforcement notification for contravention of code restrictions

249.     If, by the end of the period specified in the notification under clause 106, OFCOM are satisfied that the condition or restriction in question has not been complied with, they may serve an enforcement notice on the notified provider. Such a notice requires the provider to comply with the requirements set out in the notice. This duty is enforceable by OFCOM in civil proceedings.

Clause 108: Penalties for contravention of code restrictions

250.     Where a notified provider has not complied with a requirement notified under clause 106 or 107, or remedied the consequences of the notified contravention, OFCOM may impose a penalty. In deciding on the amount of a financial penalty, OFCOM are required to consider whether the fine is appropriate and proportionate, and to take account of any representations made by the person concerned, and any steps taken by him to comply with the condition or restriction in question. The maximum fine that may be imposed under this clause is £10,000. The Secretary of State may by order amend this provision so as to substitute a different maximum penalty.

Clause 109: Suspension of application of code

251.     Subsection (1) allows OFCOM, if satisfied that a person has been in repeated and serious contravention of the requirements under clause 34 to pay an administrative charge, that proceedings to recover any outstanding amounts have failed to secure complete compliance with clause 34 and have no reasonable prospect of securing compliance and that the imposition of penalties under clause 37 has failed to secure compliance, to give a direction suspending the application to that person of the electronic communications code. OFCOM must also be satisfied that the suspension of the application of the code is appropriate and proportionate to the seriousness of the repeated contraventions.

252.     Subsection (2) allows OFCOM, having given a direction suspending a provider's entitlement to provide an electronic communications network, or part of such a network under clause 38, 96, 128 or 136, to give a further direction suspending the application to that provider of the electronic communications code.

253.     Similarly, under subsection (4), if a provider has been in repeated and serious contravention of any restriction or conditions set out in the Secretary of State's regulations made under clause 105, OFCOM can by giving a further direction suspend the code in relation to its application to parts of the provider's network which are not yet in existence, or where the disapplication of the code would not prevent the continued provision of the network.

254.     Suspension of the application of the code will continue for as long as the suspension of entitlement remains in force (in the case of suspensions under subsection (2)) or until revoked by OFCOM. Suspension means that the provider cannot exercise any right conferred on him by the code but, unless OFCOM otherwise provide in a scheme made under clause 113, suspension does not have any other effect on agreements entered into or on actions taken under the code. In other words, the suspension should not affect the rights of the operator to maintain service on the parts of its network unaffected by the suspension. This clause implements Article 14(2) of the Authorisation Directive.

Clause 110: Procedure for directions under s.109

255.     Except in an urgent case, OFCOM must not give a direction under clause 109(4) suspending the application of the code to any person ("the operator") unless they have: (i) notified the operator of the proposed suspension and of the steps (if any) that they are proposing to take under clause 109; (ii) provided him with an opportunity of (during a period of not less than one month after the date of notification) making representations about the proposals and of proposing steps for remedying the situation that has given rise to the proposed suspension; and (iii) considered every representation and proposal made to them during that period.

256.     As soon as practicable after giving a direction under clause 109 in an urgent case, OFCOM must provide the operator with an opportunity to make representations about the effect of the direction and of any steps taken under clause 109 in connection with the suspension and to propose steps for remedying the situation that has given rise to the situation.

*Subsection (4) provides that a case is urgent for the purposes of this case if OFCOM consider that it would be inappropriate to allow time, before giving a direction under clause 109, for the making and consideration of representations, because the circumstances appearing to OFCOM to require the suspension fall within subsection (5).

* The circumstance listed in subsection (5) include a serious threat to public safety, public health or to national security, serious economic or operational problems for persons (apart from the contravening provider or supplier) who are communications providers or persons who make associated facilities available or serious economic or operational problems for persons who make use of electronic communications networks, electronic communications services or associated facilities.

Clause 111: Modification and revocation of application of code

257.     OFCOM may, by a further direction, alter the code's application under clause 102(5) to particular places or particular networks or parts of networks or particular conduit systems or parts of conduit systems. Under subsections (2) and (3), OFCOM may, by a further direction, revoke a direction applying the electronic communications code either on the application of the person to whom the code applies or where such a person ceases to be a communications provider or a provider of a conduit system.

258.     Before giving such directions OFCOM must, in accordance with clause 102, first publish a notification of their proposal to give the direction and consider any representations made about that proposal. This implements Article 14(1) of the Authorisation Directive.

Clause 112: Notification of cessation by person to whom code applies

259.     Where the code has been applied to a person who provides an electronic communications network of a type not designated for the purpose of clause 29 or who provides a system of conduits, and that person ceases to provide that network or system of conduits, he must notify OFCOM. Failure to do so may result in the provider being penalised an amount not exceeding £1,000. Secretary of State may by order amend this provision so as to substitute a different maximum penalty.

Clause 113: Transitional schemes on cessation of application of code

260.     This clause gives OFCOM a power to put in place a transitional scheme in cases where the code has ceased to apply to a provider by reason of the code being either suspended, revoked or modified in relation to that provider.

261.     Subsection (3) gives a non-exhaustive list of the type of provision that might be contained in a transitional scheme. The examples given relate to the removal or retention of apparatus installed under the code, and the restoration of land affected by the code. Such a scheme may also provide for the transfer of rights and liabilities arising out of agreements made or obligations incurred under the code; authorise apparatus on code land to be retained for use by other providers; and provide for any issues arising from the scheme to be referred to OFCOM.

Clause 114: Compulsory acquisition of land etc.

262.      Schedule 4 confers on code operators the power to purchase compulsorily land in England and Wales and Scotland, where authorised by the Secretary of State and with the consent of OFCOM. In Northern Ireland, code operators may purchase compulsorily land by requesting (with the consent of OFCOM) the Secretary of State to order that land vests in them. This provision re-enacts sections 34 to 40 of the Telecommunications Act 1984 (which are repealed by the Bill), with certain consequential amendments to take account of the abolition of the regulatory regime under the Telecommunications Act 1984.

*A code operator is a provider of an electronic communications network to whom OFCOM have applied the electronic communications code.

263.     The power to purchase compulsorily extends to land that is required by the code operator for or in connection with the establishment or running of an operator's network. For the purposes of Schedule 4, an operator's network does not include a conduit system.

264.     In England and Wales, the Acquisition of Land Act 1981 and, in Scotland, the Acquisition of Land (Authorisation Procedure) (Scotland) Act 1947 applies to compulsory purchases by code operators as if they were local authorities within the meaning of those Acts. Under these Acts, code operators must make and publish an order so that land owners are given the right to object to the purchase and to have their objections heard. Only after objections have been heard can the Secretary of State be requested to confirm the order. In Northern Ireland, the Secretary of State must follow the procedures laid down in Schedule 6 to the Local Government Act (Northern Ireland) Act 1972 and Schedule 8 to the Health and Personal Social Services (Northern Ireland) Order 1972.

265.     Where land is acquired compulsorily in England and Wales and Scotland, the benefit of certain provisions in, respectively, the Town and Country Planning Act 1990 and Town and Country Planning (Scotland) Act 1997 apply to code operators.

266.     A code operator may not dispose of any land purchased compulsorily in England, Wales, Scotland or Northern Ireland except with the consent of OFCOM.

267.     Paragraph 14of Schedule 18 (transitional provisions) provides that any compulsory purchase orders, vesting orders or authorisations made by the Secretary of State which are effective immediately before the commencement of Schedule 4 are to have effect after the commencement of that Schedule as if made or given under that Schedule.

268.     Paragraphs 6, 7 and 8 of Schedule 4 enable representatives of code operators authorised by the Secretary of State in writing to enter upon and survey (at any reasonable time) any land (except land covered by buildings or used as a garden or pleasure ground) in England, Wales, Scotland and Northern Ireland for the purpose of ascertaining whether it would be suitable for use by them for, or in connection with, the establishment or running of their networks. The powers of entry conferred on code operators are subject to the following provisions:

• in England and Wales, sections 324(8) and 325(1) to (5), (8) and (9) of the Town and Country Planning Act 1990 (as modified);

• in Scotland, sections 269(9) and 270(1) to (5), (8) and (9) of the Town and Country Planning (Scotland) Act 1997 (as modified); and

• in Northern Ireland, section 40(2) to (5) and (8) of the Land Development Values (Compensation) Act (Northern Ireland) 1965 (as modified).

269.     Code operators must make good any damage or pay compensation for any damage caused to land or chattels by the exercise of their power of entry. Compensation must also be paid for any disturbance in the enjoyment of land or chattels of any person by the exercise of their power of entry.

270.     Paragraph 9(1) of Schedule 4 applies certain provisions of Part 1 of the Compulsory Purchase Act 1965for the purpose of the acquisition of land in England and Wales by agreement by code operators. Sub-paragraphs (2) and (3) apply the corresponding enactments in Scotland and Northern Ireland, respectively.

271.     In exercising her powers under Schedule 4, the Secretary of State must have regard to the duties imposed on OFCOM under clauses 3 and 4 of the Bill and the need to protect the environment, to ensure that highways are not damaged or obstructed, to minimise interference with traffic and to encourage the sharing of electronic communications apparatus.

Clause 115: Power to give assistance in relation to certain proceedings

272.     This clause provides that in actual or prospective proceedings on a question relating to the application of the code, any party to the proceedings (other than the operator) may apply to OFCOM for assistance. OFCOM may grant an application for assistance on any one of the following grounds: (i) that the case raises a question of principle; (ii) that assistance is necessary, for example, because of the complexity of the case; or (iii) by reason of some other special consideration. Examples of the kind of assistance OFCOM might provide are given in subsection (4), and include giving advice or arranging for the giving of advice by a solicitor or counsel, facilitating settlement, or arranging for legal representation.

*The meaning of operator is given in the electronic communications code, as amended by paragraph 3(1) of Schedule 3 and is, as the case may be, the person to whom the code is applied by a direction under clause 102, or the Secretary of State or the relevant Northern Ireland department.

273.     Subsections (6) and (7) allow OFCOM to recover any expenses they incur in providing assistance under this clause, by way of a charge on any costs or expenses awarded to the applicant in proceedings or under any compromise or settlement.

Clause 116: Conditions regulating premium rate services

274.     This clause gives OFCOM the power to set conditions for the purpose of regulating the content and provision of premium rate services. Such conditions are binding on premium rate service providers and may relate only to compliance with the premium rate services code approved by OFCOM under clause 117 or, in the absence of a code, an order made by OFCOM under clause 118. A premium rate service for this purpose is defined in subsections (7) to (9) and (11). Briefly, a service is a premium rate service if:

(i)     it consists of the contents of communications transmitted by an electronic communications network (e.g. a product helpline or 'chatline') or if it allows the user of an electronic communications service to make use, by making a transmission by means of that service, of a facility made available to the users of the service (including in particular a facility to make payments for goods and services, to enter a competition or claim a prize or to register a vote or record a preference); and

     (ii)      there is a charge for the service, and that charge is paid to the provider of the electronic communications service by means of which the service in question is provided (e.g. through the customer's telephone bill)

275.     Under subsection (9), a person provides a premium rate service if he provides the contents of the service or makes available the facility comprised in that service, or if he provides the electronic communications service used for the transmission of the contents services and he is entitled to a share of the charges for the contents service.

276.     Conditions set under this clause may apply generally to each provider of a premium rate service or individually to specified providers or providers of specified services. Clauses 43 and 44 apply to the setting, modification and revocation of a condition under this clause.

Clause 117: Approval of code for premium rate services

277.     This clause enables OFCOM, where appropriate, to approve codes regulating the provision and content of premium rate services made by any person. OFCOM may not approve a code unless they are satisfied that the criteria listed in subsection (2) are met. These include the existence of a person whose function is to administer and enforce the code; adequate funding for the activities of that person; objective justification for the provisions in the code; provisions which do not unduly discriminate and are proportionate and transparent. OFCOM may approve modifications made to an approved code or withdraw their approval of a code at any time.

Clause 118: Orders by OFCOM in the absence of a code under s.117

278.     This clause permits OFCOM to make an order imposing requirements with respect to the content and provision of premium rate services (including pricing) and for the enforcement of such requirements, where OFCOM consider there is no third-party code which could be approved under clause 117. OFCOM's power to make an order includes power to establish a corporate body to determine the jurisdiction of that body and any other person, to confer jurisdiction over any matter on OFCOM, to provide a person upon whom jurisdiction is conferred with the ability to compensate or reimburse expenses and to enforce any awards. OFCOM must obtain the consent of the Secretary of State before making an order under this clause.

Clause 119: Enforcement of s.116 conditions

279.     OFCOM may enforce conditions set under clause 116 in accordance with clauses 90 to 92. In deciding on the amount of a financial penalty under clause 92, OFCOM must consider whether the fine is appropriate and proportionate and take into account any representations made by the premium rate service provider concerned as well as any steps taken by him to comply with the notified condition and remedy any consequences of a contravention. The penalty may not exceed £100,000. The Secretary of State may by order amend the maximum penalty.

Clause 120: Suspending service provision for contraventions of s.116 conditions

280.     Subject to compliance with clauses 98 and 99, this clause gives OFCOM a power to suspend or restrict the right of an electronic communications service provider to provide premium rate services where OFCOM are satisfied that that provider is in serious and persistent breach of any conditions imposed on him under clause 116, and that the imposition of penalties and enforcement notifications under clause 91 has not resulted in compliance with those conditions. The suspension or restriction must be appropriate and proportionate.

281.     A direction by OFCOM under this clause may suspend entitlement to provide any or all premium rate services and may take effect indefinitely or for a fixed period. A direction may also include, where appropriate, conditions to protect the interests of the premium rate service provider's customers, including requirements for the payment of compensation. Where appropriate, OFCOM may revoke or modify the suspension or restriction. Provisions for the procedures applying to the giving of directions under this clause, equivalent to those applying to directions for breaches of other conditions of entitlement, are included via subsection (7).

Clause 121: Dishonestly obtaining electronic communications services

282.     Anyone who dishonestly obtains an electronic communications service and intends to avoid paying for that service is guilty of an offence under clause 121. A person found guilty of the offence will be liable to a fine or imprisonment, or both. Under subsection (2), it is not an offence under this clause to obtain a service mentioned in section 297(1) of the Copyright, Designs and Patents Act 1988. This clause replaces section 42 of the Telecommunications Act 1984 which is repealed by Schedule 19.

* Section 297(1) of the Copyright, Designs and Patents Act 1988 mentions programmes included in a broadcasting or cable programme service (as defined in that Act).