Memorandum submitted by Communications
for Business (CfB)
1. CfB would like to see greater clarity
of both definition of the "consumer" and the "provider",
throughout the Draft Bill.
2. CfB believes that the duties of the Consumer
panel should include monitoring the effectiveness of the new regulator.
3. CfB believes the Consumer Panel should
be able to advise OFCOM on whether its remit continues to be sufficient.
4. On the scope of the Panel, CfB believes
that its remit should be at least as wide as the remit of OFCOM.
5. CfB would like to see the Consumer Panel
empowered to advise OFCOM on the consumer implications of policy
6. CfB believes that appointments to the
Consumer Panel should be made by the relevant Secretary of State.
7. CfB would like the Consumer Panel to
have the power and resources to establish appropriate consumer
8. CfB believes that there is sufficient
commonality of interests between smaller enterprises with up to
five employees and residential consumers for their interests to
be represented by the Consumer Panel.
9. CfB is considering the merits of recommending
a separate OFCOM Consumer Panel for small business users with
six to 50 employees.
1. Communications for Business (CfB) is
one of the six Advisory Committees on Telecommunications (ACTs)
established under the Telecommunications Act 1984. CfB advises
the Director General of Oftel and represents the interests of
2. On 12 February 2002 the EU published
a report reviewing how each EU member state is implementing the
Small Firms Charter and Nigel Griffiths MP, the Minister for Small
Business, commented that it "puts the spotlight back on small
firms, recognising their central role in economic activity in
the European Union".
More recently he confirmed the importance of small businesses
to the UK and EU and their economies:
"We all know the key role small firms play
in creating jobs and driving economic reformthe 3.7 million
SME's in the UK employ 12 million people and contribute £1
trillion per year to our economy. In Europe, a massive 65 million
people depend on this thriving sector for employment."
"The potential collective force of this
sector in wealth creation, innovation and economic development
is second to none and only promises more as the EU enlarges".
3. Clearly the small business sector is
highly significant for "UK plc". In turn, the Draft
Communications Bill is significant for the small business sectornumerically
small firms make up a large proportion of both users of communications
services and networks; increasingly they are providers. CfB will
respond to the DTI/DCMS formal consultation invitation but wishes
its preliminary views to be known to the Joint Scrutiny Committee.
4. For some time CfB has argued the necessity
of consumer impact statements to help consumers to respond of
Oftel's consultations. Impact statements that identify the issues
for consumer, small businesses and otherwise, go part way to helping
them formulate their responsesparticularly when the issues
are complex and public consultation is frequent. For these reasons
we welcome the Regulatory Impact Assessment (RIA) published with
the Draft Bill.
5. Clause 3 of the Draft Bill proposes that
OFCOM will have a duty to further the interests of "persons
who are customers for services and facilities", ie users.
We note that the word "consumer" only appears in the
Draft Bill in the context of the Consumer Panel. "Persons
who are customers" is far too narrow. It does not take account
of other users and seems to imply only persons who have a contractual
or pre-contractual relationship with a service provider and to
exclude other users, for example, employees or other members of
a household. Relevant "persons" should be defined as
widely as possible, ie everyone in society in their role as a
buyer or potential buyer and user or potential user of services.
There are a number of related terms used in the Draft Bill, such
as "citizens" (Clause 4(5)), "members of the public"
(Clause 12 (1)(a) and (b)), "end users" (Clause 38(1)(a)).
Their relationship to "persons who are customers" is
6. Clause 96(1)(a) refers to "communications
providers"persons who provide an electronic communications
network or service. This term may be intended to encompass BT
and other large companies but it is not clear whether it covers,
for example, a myriad of small businesses that could be defined
as providers of such services.
7. CfB would urge greater clarity of both
definition of the "consumer" and the "provider"
to ensure that small businesses are aware of their rights and
responsibilities as users of communications services and when
they have regulatory obligations as providers.
8. In Section 96(2) the Consumer Panel is
set to advise OFCOM and "such other persons as the Panel
think fit". CfB welcome this wide brief and would be opposed
to attempts to narrow this to (essentially private) advice to
OFCOM. CfB's working relationship with Oftel allows the committee
to respond to DTI and other government consultations and to give
views to other bodies, including the European Commission. This
is beneficial for small consumers and Oftel.
9. We would welcome explicit clarification
that the term "persons" in this context includes government
departments, other official bodies and international organisations
such as the European Commissionindeed all relevant bodies,
both national and international.
10. Clause 96(3) lists the functions of
the Consumer Panel in addition to giving advice to OFCOM. CfB
believes that this should include monitoring the effectiveness
of the new regulator in pursuing its duties as they affect small
business and other consumers. The new legislation attempts to
be "convergence proof"; if the need should arise the
Consumer Panel should be able to advise OFCOM on whether its remit
continues to be sufficient to regulate the changing communications
11. On the scope of the Panel, we believe
that its remit should be at least as wide as the remit of OFCOM
in relation to delivery of electronic communications services.
While it would not be appropriate for the Consumer Panel to deal
with specific content matters, such as complaints about taste
and decency or unfair treatment (issues for the Content Board),
it should nevertheless be empowered to advise OFCOM on the consumer
implications of policy affecting content, such as "walled
gardens" and the objectivity of electronic programme guides.
12. Rather than OFCOM, we believe that appointments
to the Consumer Panel, should be made by the relevant Secretary
of State (SoS). This is essential to ensure a measure of independence
form the regulator. The SoS should also take decisions on removal
of members, should the need arise.
13. Clause 97 contains provisions for consumer
representation for each of the four nations of the United Kingdom
but does not prescribe how this should be put into practice. In
contrast, the current Telecommunications Act (TAct) 1984 contains
provisions for advisory bodies of this kind. We believe that there
should be specific provision on the face of the Bill that permits
the Panel to establish and adequately resource consumer committees
for the regions/nations/other interest groups. This should include
representation of small businesses.
14. Although there is reference to "small
business customers" in Clause 96(2), there is no reference
in Clause 97 to the interests of small businesses. We regard this
as an omission (and retrograde in the light of the current provision
in the TAct). CfB is considering its view but there may be merit
in establishing a separate OFCOM panel for small businesses users
with six to 50 employees. There is sufficient commonality of interests
between smaller enterprises with up to five employees and residential
consumers for their interests to be represented by the Consumer
Panel. We note that this will require changes to definitions of
consumers in sections of the Draft Bill. We also note that the
new Telecoms Ombudsman will deal with disputes raised by these
two groups with maximum awards (including costs) up to £5,000.
87 Nigel Griffiths MP, DTI press release P/2002/083,
12 February 2002. Back
Nigel Griffiths MP, speech to the UK Federation of Small Business
Annual Conference, Friday 22 March 2002. Back