Annex: Ofcom's submission of 3 July 2014 to the
Culture, Media and Sport Committee
"International Roaming
"To incentivise alliances between operators
providing "roam like at home" (RLAH) pricing (in effect,
the elimination of international roaming surcharges), the draft
Regulation proposes to exempt mobile network operators (MNOs)
from implementing some of their obligations under the third Roaming
Regulation (2012), which came into force in July 2013[1].
"Ofcom fully supports initiatives aimed at reducing
international roaming charges, recognising the central importance
of international roaming to the single market and the importance
UK citizens and consumer attach to this service. However, proposing
to unpick a carefully negotiated regulation within two months
of it coming into force has already substantially undermined regulatory
certainty and risks undermining the investments the Commission
is seeking to promote. If implemented it would also potentially
undermine competition in national markets e.g. by benefiting large
MNO groups to the detriment of smaller national players, often
the disruptive new entrants.
"We believe there are simpler ways to achieve
lower roaming charges than the complicated approach set out in
the Commission's draft Regulation (e.g. by revisiting the glide
path of regulated prices set out in the third Roaming Regulation
(2012)).
"We therefore cautiously welcome the European
Parliament's amendments (in its First Reading Position adopted
in April 2014), which replaced the Commission's proposals with
a simple requirement that all MNOs provide RLAH, and anticipated
new rules on "fair use" and a reduction in applicable
wholesale roaming rates. BEREC is currently preparing advice to
the European Commission on the revision of wholesale rates and
"fair use", both of which must be agreed in advance
of RLAH implementation in order to mitigate competitive distortions.
"Net neutrality
"In Ofcom's policy position on net neutrality,
published in November 2011, we concluded that there were benefits
associated with both the 'best-efforts' internet and the provision
of managed services (or "specialised services" as they
are described in the Commission's proposals) and that one key
aim was for a framework which enabled both of these simple concepts
to be accommodated.
"We also argued that we regard blocking of any
kind by internet access providers as highly undesirable and that
we would be concerned if network operators prioritised managed
services in a manner that diminished network capacity for 'best-efforts'
access to the open internet. And critically, we said that we needed
to ensure that consumers have enough clear and transparent information
about the conditions of the services that they purchase. We believe
this approach has served the UK well to date and, as such, […]
- in particular there is no evidence that EU consumers are being
systematically denied access to an unrestricted internet access
service. Nevertheless we believe there is merit in strengthening
transparency/information obligations on operators, to ensure that
consumers are aware of any limitations on their service (as the
draft Regulation also seeks to do). There could also be merit
in clarifying the powers of national regulatory authorities like
Ofcom to ensure their ability to protect consumers' access to
unrestricted internet access services (e.g. minimum quality of
service requirements if appropriate, but also other regulatory
remedies such as penalties, end-to-end interoperability obligations,
dispute resolution, etc. if these are more efficient and proportionate).
The draft Regulation does not, however, provide this additional
clarification.
"Consumer protections
"Ofcom is supportive of the Commission's ambitions
to increase the level of consumer protection across Europe. However,
while we welcome many of the policy aims, we are concerned that
the Commission's approach could have unintended/perverse consequences
(i.e. reducing rather than increasing consumer benefit).
"The Commission had proposed to make these consumer
provisions a "fully harmonised" ("maximum harmonisation")
framework. This would have prohibited governments and regulators
from having or introducing any additional consumer protection
provisions (beyond what is in this proposal), depriving them of
the ability to respond to the evolving needs of their citizens
and consumers in these fast-changing markets.
"Ofcom was therefore pleased that the European
Parliament amended the Commission's proposals by restoring the
"minimum harmonisation" approach which currently exists
under the Universal Service Directive. If adopted, this would
enable governments and regulators to continue to respond to the
needs of their national markets, ensuring any regulatory obligations
are proportionate, and enabling them to respond to new consumer
challenges in future.
"In several cases, the Commission's proposals
reflect approaches already taken in the UK:
· "Consumers' ability to exit broadband
contracts without penalty should they not receive expected speeds,
as stated in their contract. This is in line with the existing
voluntary ISP Code of Practice in the UK.
· "Price comparison services accreditation.
The Commission's proposals are based on Ofcom's well-established
scheme to help consumers get accurate, transparent and comprehensive
price information.
· Ban on rollover contracts. Ofcom prohibited
the sale of new rollover contracts (for fixed line services) in
2011.
"Switching:
"Ofcom welcomes the Commission's proposals that
switching between service providers should be led by the Gaining
Provider, which we believe is in consumers' best interests and
supports competition. This is consistent with Ofcom's recent decision
on fixed line voice and broadband switching processes, and would
theoretically require mobile switching to follow the same approach
(in turn facilitating switching between bundles). The UK Government's
document - Content, Connectivity and Consumers - also includes
support for Gaining Provider-led switching processes. However,
the draft Regulation would require this to be in place by 2016,
and it is likely to be difficult to implement this in the UK across
all sectors in this timeframe.
"Spectrum
"The Commission proposed a transfer of competence
over spectrum auctions and assignments, including a requirement
that Member States notify any proposed auctions/ assignments to
the Commission (and other Member States), with a Commission power
to delay (and possibly block) national measures. This is motivated
by a desire by the Commission to harmonise the timing and form
of spectrum awards, and to address the handful of cases in Europe
where spectrum auctions have not been successfully run. The Commission
also proposed a (long) binding list of considerations which national
spectrum authorities would be required to take into account when
awarding spectrum.
"The European Parliament has supported the Commission's
proposals on both counts.
"Ofcom strongly opposes the proposed transfer
of substantive responsibility for spectrum management from Member
States to the Commission, and considers that spectrum management,
and spectrum awards in particular, must remain a national competence.
Whilst there are current efforts in Council to water down these
proposals so that Member States retain the "last word"
on their national awards, we remain concerned over the bureaucratic
scrutiny mechanism proposed, which could delay national awards
by four months or more.
"Ofcom also objects to the proposals for a binding
list of considerations. In addition to potentially conflicting
with existing provisions of the Framework and Authorisations Directives
(2009), they would inevitably create additional grounds for the
appeal of award decisions, which would once again risk delaying
spectrum release.
"The European Parliament added another proposal
to the Commission's — namely 25-year minimum licence terms
for a small number of harmonised spectrum bands. This is a proposal
that the UK could support provided spectrum authorities have appropriate
claw back powers (e.g. on national security grounds, for change
of use, breach, non-payment of fees), and as long as the duration
requirement does not have retrospective effect (as it currently
does in the European Parliament's text). Within the UK we are
already moving towards indefinite durations for such types of
licence (so a minimum licence term would have little impact on
us) and we can see merit in such measures to promote greater regulatory
certainty and hence encourage investment across Europe.
"Ofcom, 3 July 2014"
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