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
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
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
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
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
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