Joint Committee on The Draft Communications Bill Appendices to the Minutes of Evidence


Memorandum submitted by Energis plc

  Energis plc warmly welcomes the publication of the Government's draft Communications Bill, which shapes the regulation of the communications sector for the twenty-first century. It is crucial that our industry has a strong effective and unified regulator, with the powers and inclination to act to ensure a competitive market.

  We have taken the opportunity to submit initial evidence to the Joint Select Committee, focusing on the areas we consider of vital importance, so that the Committee may consider addressing these issues during the scrutiny period. We will of course be providing a more comprehensive response later in the consultation period.


  Whilst we welcome the principle of light-touch regulation, it has to be recognised that too little regulation can be as bad for the consumer as too much regulation. OFCOM must have an obligation to carry out, consult on and undertake an impact assessment for each of its decisions, whether the decision imposes regulation or not.

  Appropriate regulation must be the goal of policy makers.

  Appropriate regulation also means that OFCOM should have an obligation to make an assessment of the level of competition, and to impose the appropriate level of regulation, prior to the SMP operator launching a new product or service. If the market is not competitive, mechanisms should be put in place to ensure that prior to launch there are suitable products that allow other operators to compete. If the market is competitive, with rationale for the competitive state of that market clearly understood, no regulation should be imposed. We believe that this development is vital to ensuring choice for the consumer, which in turn will lead to lower prices and higher quality of service.

  Timeliness is of major importance within dynamic markets. The slow speed of regulation is one of the flaws of the current system, which we now have the opportunity to resolve. The proposals to speed up the regulatory process are therefore critical. The organisational structure must support quick yet informed decision-making.


  Timeliness of the appeal procedure is as important as standard decision-making procedures. When the validity of a decision made by OFCOM is called into question, that decision is effectively put on standby until an appeal has been concluded and, if the appeal is successful, a new decision is made by OFCOM. Under the current regime this can mean a delay of around six months for the appeals process followed by a further six months or more delay whilst the regulator remakes his decision.

  By instituting a non-judicial expert appeals body, these timescales can be managed. We believe that the timescales should allow one month for the bringing forward of an appeal and a further three months for the conclusion of the appeal.


  The current cost of regulating the communications sector is £118 million. When established the Government expects that the costs of OFCOM to be met almost entirely from those it regulates, including the £5 million OFCOM will borrow to establish the organisation.

  Whilst the policy narrative, which accompanies the draft Communications Bill states that regulation should be efficient, our worry is that the fees we pay to the regulator will increase dramatically. Indeed, the Towers Perrin Scoping Report hinted that there was little scope to make savings, apart from some support services. When our industry is paring cost to the bone it seems difficult to believe that integration does not bring synergy.

  It is clear to us that significant costs will be incurred by the Consumers Panel and the Content Board. The Consumers Panel will be operationally independent and can set its own agenda and commission reports and research; our concern is that this may lead to expensive duplication.

  We hope that OFCOM will choose to establish prudence as its guiding principle and that the Joint Committee will have the opportunity to review a draft budget of OFCOM. We implore the new organisation to start with the principles of efficiency and flexibility.

May 2002

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