7 EUROPEAN ELECTRONIC COMMUNICATIONS
MARKETS
(30523)
8169/09
COM(09) 140
+ ADDs 1-4
| Commission Communication: Progress Report on the Single European Electronic
Communications Markets 2008
Commission Staff Working Documents
|
| Legal base |
— |
| Department | Business, Innovation and Skills
|
| Basis of consideration |
Minister's letter of 17 November 2009 |
| Previous Committee Report |
HC 19-xvi (2008-09), chapter 1 (6 May 2009) |
| To be discussed in Council
| To be determined |
| Committee's assessment | Politically important
|
| Committee's decision | Cleared
|
Background
7.1 The EU regulatory framework agreed in 2002 consists
of the following instruments:
— Framework Directive setting out
the main principles, objectives and procedures for an EU regulatory
policy regarding the provision of electronic communications services
and networks.
— Access and Interconnection Directive
stipulating procedures and principles for imposing pro-competitive
obligations regarding access to and interconnection of networks
on operators with significant market power.
— Authorisation Directive introducing
a system of general authorisation, instead of individual or class
licences, to facilitate entry in the market and reduce administrative
burdens on operators.
— Universal Service Directive requiring
a minimum level of availability and affordability of basic electronic
communications services and guaranteeing a set of basic rights
for users and consumers of electronic communications services.
— Privacy and Electronic Communications
Directive setting out rules for the protection of privacy
and of personal data processed in relation to communications over
public communication networks.
7.2 In addition, the Radio Spectrum Decision
establishes principles and procedures for the development and
implementation of an internal and external EU radio spectrum policy.
7.3 The Framework also establishes a number of committees
and policy groups to manage and implement the new system:
— Communications Committee: which
advises on implementation issues;
— European Regulators Group: to
facilitate consistent application of the regime;
— Radio Spectrum Policy Group: to
enable Member States, the Commission and stakeholders to coordinate
the use of radio spectrum;
— Radio Spectrum Committee: to deal
with technical issues around harmonisation of radio frequency
allocation across Europe.
The Commission Communication
7.4 This Report brings together the Commission's
annual research on communications markets across the EU and its
assessment of how well each Member State has implemented the EU
regulatory framework. It covers the period up to 1 October 2008
in terms of the data used and up to 31 December 2008 for the regulatory
situation.[17]
7.5 In preparing the Report, Commission officials
visit each Member State to interview Government officials, regulators
(Ofcom and the Information Commissioner's Office in the UK), industry
players (e.g. BT, Mobile Broadband Group, UK Competitive Telecommunications
Association, Federation of Communication Services) and consumer
groups (Consumer Focus).
7.6 The accompanying Commission Staff Working Papers
reviews the state of EU electronic communications services markets
(fixed, mobile and broadband), and looks at the regulatory environment,
consumer interests and spectrum management, in detail, including
a detailed annex on national markets and regulatory performance
of each Member State, including some 130 tables.
7.7 This copious documentation was helpfully summarised
by the then Minister for Communications, Technology and Broadcasting
at the Department for Business, Enterprise and Regulatory Reform
(Lord Carter of Barnes) in his Explanatory Memorandum of 21 April
2009, which the Committee considered on 6 May. This covered:
— market developments;
— the EU regulatory environment;
— consumer Interests;
— general conclusions; and
— a chapter on the UK, covering:
- the total turnover of the UK telecoms sector;
- the percentage of the UK population using unbundled
services, which is the highest percentage in the EU;
- UK broadband penetration;
- UK mobile penetration;
- the upcoming launch by Ofcom of a public consultation
on the assessment of the mobile sector outlining the regulatory
challenges in the mobile market;
- digital television take up;
- other regulatory issues; and
- various consumer issues.
All of this is dealt with in detail in our previous
Report.
7.8 At the end of his Explanatory Memorandum, the
then Minister noted that:
"The major contention on data protection
during 2008 was in relation to behavioural advertising technology,
known commonly as 'phorm'.[18]
The European Commission reported a large number of complaints
when the fixed incumbent announced its plans to use the technology
and it became known it had used it in initial trials in 2006 and
2007 without obtaining user consent. Complaints to the EU reflected
a view that the Information Commissioner's Office was 'not sufficiently
resolute in dealing with complaints about past trials'. In light
of the complaints received in 2008 the Commission sent two formal
requests to the UK authorities requesting clarifications regarding
the UK legal framework on e-Privacy and its enforcement in the
phorm cases. The Commission will continue to monitor the application
of the relevant EU law provisions for this case."
7.9 The then Minister went on to say that in the
report the Commission committed to "continue to monitor the
application of the relevant EU law provisions" in relation
e-privacy and phorm. He explained that, on Tuesday 14 April 2009,
the European Commission had written to the UK, "initiating
the first stage of infraction proceedings over our implementation
of aspects of the Directive on Privacy and Electronic Communications
(2002/20/EC) and the Data protection Directive." He further
explained that the areas of EU law at issue were implemented in
the UK by the Regulation of Investigatory Powers Act 2000 (RIPA),
and that, although BERR has overall responsibility for the e-Privacy
Directive, the Home Office is responsible for that legislation.
The UK, he said, had two months to respond to the letter:
"We have two options; to either admit we
are in breach of our responsibilities and say we will amend the
relevant legislation or to defend our implementation of the Directive
on some or all of the points raised in the Commission's letter.
A first meeting between BERR and Home Office and Ministry of Justice
lawyers has been fixed to discuss this."
7.10 Finally, the Minister said that, although the
current Presidency was not proposing to discuss the Communication
further in Council, it was "possible that the Swedish Presidency
may propose Council Conclusions for their Council in December
2009."
Our assessment
7.11 Although the Communication raised no questions
in and of itself, we reported it to the House because of the importance
of the matters it covers and, in particular, because of the dispute
between the Commission and the Government concerning electronic
privacy and data protection.
7.12 For the same reason we also drew it to the attention
of the then Business, Enterprise and Regulatory Reform Select
Committee.
7.13 We asked the Minister to let us know which of
the two options he referred to above the Government chose, and
to explain why.
7.14 In the meantime, we retained the document under
scrutiny.[19]
The Minister's letter of 17 November 2009
7.15 The Minister for Digital Britain (Stephen Timms)
says that he is now in a position to let the Committee know the
answer to its request. He explains that, after consultation between
his own department, the Ministry of Justice (which leads on the
Data Protection Act) and the Home Office, it was decided that
the Home Office should lead on the UK's response to the Commission.
7.16 The Minister then recalls the background leading
to the initiation of the first stage of infraction proceedings:
"This related to the UK's implementation
of aspects of the Directive on e-Privacy and Electronic Communications
2002/58/EC and the Data Protection Directive (95/46/EC). The alleged
incorrect transposition related to article 5(1) of Directive 2002/58/EC
and articles 2(h), 24 and 28 of Directive 95/46/EC."
7.17 Then, noting that he is now in a position to
let the Committee know which of the two options the Government
has chosen and why, the Minister continues as follows:
"The UK responded to the Commission on 15th
June 2009. I am advised by Home Office officials that that response
sets out in detail why we believe that the regulatory framework
established by the Regulation of Investigatory Powers Act (RIPA)
2000 — and in particular the existing offence of unlawful
interception — fully transposes Article 5(1) of Directive
2002/58/EC and Article 24 of Directive 95/46/EC. It also explains
in detail how the Act works, the responsibilities for investigating
offences, and the way in which the various safeguards and oversight
regimes work. The letter also makes clear that the Information
Commissioner is a body capable of satisfying the requirements
of Article 28 of Directive 95/46/EC and explains the separate
role of the Commissioner's Office as the UK's independent public
body set up to protect personal information and promote public
access to official information.
"I am further advised that the response
recognises the validity of the Commission's observations in relation
to informed consent under Article 2(h) of Directive 95/46/EC and
sets out the measures the UK are planning to adopt to resolve
these points. This includes the issue of official guidance to
make absolutely clear that 'consent' for the relevant purposes
must be freely given, specific and informed consent as required
by the Directive 2002/58/EC.
"The response also reiterated the United
Kingdom's firm commitment to protecting users' privacy and data
— particularly in the electronic communications sector.
The comprehensive and effective regulatory, enforcement and sanctions
framework in the UK ensures that both domestic and EU law is enforced
by bodies with the requisite degree of independence from Government,
in order that that citizens' rights can be properly protected
and upheld.
"I can now also confirm that the UK has
received a response to our previous representations to the Commission
in the form of a 'reasoned opinion' issued by the Commission on
Thursday 29th October 2009. This challenges aspects
of the UK's case for full and effective transposition of the relevant
directives. HMG officials, again led by the Home Office, have
met to discuss the UK's reaction to this.
7.18 In light of the above update — "and
given we have now moved outside the scope of the original Commission
Communication" — the Minister expresses the hope that
the Committee may now feel able to clear the Communication.
Conclusion
7.19 We are grateful to the Minister for this
further information, and agree that this matter has indeed moved
outside the scope of the Communication.
7.20 It was for this reason that we drew it to
the attention of the then Business, Enterprise and Regulatory
Reform Select Committee in May, and why we now draw this further
information to its successor, the Business, Innovation and Skills
Committee. Given the role of the Home Office, we are also forwarding
this chapter of our Report to the Home Affairs Committee.
7.21 We also now clear the document.
17 For consideration of the 2007 Report, see (29586)
7979/08: HC 16-xxi (2007-08), chapter 10 (14 May 2008). Back
18
"Phorm, formerly known as 121Media, is a US-based digital technology
company known for its advertising software (a.k.a. "adware").
Founded in 2002, the company originally distributed programmes
that deliver targeted advertising based on the websites that users
visit. It stopped distributing them after complaints from groups
in the United States and Canada. It then approached UK Internet service providers
(ISPs). Phorm is said to have argued that the data collected would
be anonymous and not be used to identify users, and that their
service would include protection against phishing (fraudulent
collection of users' personal information). Nonetheless, World
Wide Web creator Sir Tim Berners-Lee and others have spoken out
against Phorm for tracking users' browsing habits, and BT Group
has been criticised for running secret trials of the service." Back
19
See headnote: HC 19-xvi (2008-09), chapter 1 (6 May 2009) Back
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