Joint Committee on The Draft Communications Bill Minutes of Evidence

Questions for written reply from the Bill Team in advance of the final evidence session

  1.  What further draft clauses are now expected to be published before the Committee completes its inquiry and when? Are any additional draft clauses, covering new issues, likely to be published after the Committee has reported?

  We intend to publish draft clauses on must-offer/must-carry by the end of July. On newspaper ownership we have said that we would publish as soon as possible in the light of the Enterprise Bill. We hope to do so by the end of July, but this may not be technically possible. If so, then officials from the Bill Team would be happy to give the Committee a memorandum and/or a presentation to explain the detail of the policy. Otherwise, a number of new provisions will be included in the Bill on introduction in accordance with the table that was sent to the Committee on 22 May.

  2.  The Government's supplementary memorandum (Ev 11) refers to "further consideration being undertaken on "national security issues". What precise issues are these and what additional provisions in the final Bill might result from this consideration?

  The issue is how to update section 94 of the Telecommunications Act 1984, which allows the Secretary of State to give to public telecommunications operators (PTOs) directions of a general character in the interests of national security or of relations with a foreign government. Since the status of PTO is not a concept which is being carried over from the 1984 Act into the new regime, consideration is required of the best way of updating these powers. Any additional provisions in the Bill, therefore, are likely to be consequential amendments of the existing section 94 for this purpose.

  3.  What progress has the Government made in its consideration of whether statutory appeal is necessary or desireable in cases where the full appeal route in the draft Bill does not apply?

  We are still looking at this issue. Any statutory provision would aim to provide an equivalent provision to Judicial Review. Whilst this would ensure that the right to appeal was clearly visible on the face of the Bill, it is not clear that there would be any practical advantages to this approach.

  4.  Does the Government agree with the statement in oral evidence by the Competition Commission that appeals to it rather than the Competition Appeal Tribunal could be in principle compatible with the requirements of the EC Directives and, if so, what is the Government's response to the particular proposals of the Competition Commission that it should act as appellate authority on pricing issues?

  The Competition Commission's proposal is not at first sight incompatible with the Directives (though further work would be required to give any definite view on that point) and represents an interesting alternative proposal. The Government will discuss this suggestion with both the Commission and the Tribunal, and will consider any relevant views expressed by other stakeholders; and will if appropriate amend the draft Bill before presenting it to Parliament.

  5.  What are the precedents and what is the rationale for OFCOM itself to have order-making powers under the draft Bill and in what circumstances would the Government expect the powers not to consult granted in provisions inserted by paragraph 25 of schedule 11 to be exercised?

  The major precedent is the Utilities Act 2000. The rationale for OFCOM to have order-making powers is that OFCOM has to do things like set fees in order to manage the spectrum. The question is the mechanics of how these are promulgated. By giving OFCOM order-making powers in the form of statutory instruments, and requiring some of these to be laid before Parliament, the procedure provides both transparency and a measure of Parliamentary oversight.

  Paragraph 25 of Schedule 11

  As a general principle, it is right that OFCOM should have to consult before making regulations and clause 255 requires them to do so. However, in some limited categories of cases, consultation is unnecessary and can even be detrimental because of the time it takes. Paragraph 25 of schedule 11 covers two such cases.

  New subsection 6(2) provides flexibility to act in cases of urgency. This mirrors a provision in section 6 of the Wireless Telegraphy Act 1998. An example would be where an unforeseen situation arises in the course of an auction that requires regulations to be changed urgently. The paragraph enables OFCOM to respond quickly without consulting. It is not expected that such cases will arise frequently in practice but it is necessary for there to be some flexibility when they do.

  The second case is where a change needs to be made to auction regulations and the change in question would not affect anyone adversely and would not have caused anyone to have acted differently had it already been in place. In these particular circumstances, consultation is unnecessary. The sort of case in which consultation might be dispensed with under this heading includes a change to the start date of an auction, a minor change to the administrative arrangements for making payment or a change to an address.

  6.  What powers will OFCOM have to recover regulatory costs from the BBC and how will the level of such costs be determined? (see Ev 76)

  The Bill empowers OFCOM to prescribe or agree fees to be charged for services provided (other than a service which OFCOM is obliged to provide or for which fees are expressly provided for, or prohibited, elsewhere). The Government intends that OFCOM should be able to charge the BBC on a basis to be determined. This principle is accepted by the BBC (which already contributes to the expenses of the Broadcasting Standards Commission) but further consideration and discussion are needed as to how it is best translated into practice, given that, in the BBC's case, OFCOM will not be able to impose charges by way of licensing procedures. We anticipate that a further amendment to the BBC's Agreement with the Secretary of State will be required to embody the BBC's obligations regarding payments to OFCOM.

  7.  What is the Government's response to the suggestion that the Universal Service Directive is not fully implemented in the draft Bill? (Ev 30, p5)

  We think the draft Bill provides all the statutory framework necessary for full implementation. In particular, it provides powers for the Secretary of State to determine appropriate remuneration for the imposition of must-carry obligations.

  8.  The Secretary of State is the subject of the general regulatory duties in the same way as the regulator in the case of the Telecommunications Act 1984 and the Utilities Act 2000. Why is this not the case with the draft Communications Bill?

  In the 1984 and 2000 Acts, the Secretary of State and the regulator have very closely related functions. In the case of the 1984 Act, for example, there is provision for the DGT, as well as the Secretary of State, to issue licences. Given the possibility of such parallel responsibilities, it is essential that the decisions taken by the regulator and the Secretary of State in discharging these functions are taken within a common framework.

  In the Communications Bill, on the other hand, the functions of OFCOM and the Secretary of State are essentially distinct. OFCOM has been given general duties which are appropriate to its functions. It does not appear necessary for the Secretary of State to be given any such duties in respect of her functions; and some cases—the giving of directions to OFCOM on grounds of national security, for example—the general duties which are appropriate to OFCOM's functions would be incompatible with the purpose of the powers proposed for the Secretary of State.

  9.  What is the Government's view of the proposals relating to dispute resolution and other matters in the memorandum submitted by Clifford Chance?

  The memorandum is a constructive contribution to the process of consultation, and will of course be carefully considered in that context. Clifford Chance's suggestions on dispute resolution and mediation procedures are interesting and helpful, and will be carefully studied before the Government puts forward legislative proposals on these aspects of the EC Directives.

  10.  BSkyB state that the power to seek directions from the court in respect of delay by the OFT under paragraph 7 of Schedule 5 and paragraph 7 of Schedule 6 to the Competition Act 1998 have not been brought into force (EV133). Is this correct? Are there plans to bring these provisions or equivalent provisions under the Enterprise Bill into force or to make comparable provisions in respect of sector specified powers of OFCOM?

  These provisions have not yet been brought into force. We are considering a suitable commencement date for these paragraphs. When the provisions are commenced, they will of course apply also to sectoral regulators exercising relevant concurrent powers. OFCOM has no functions under its sector-specific powers equivalent to the functions of the DGFT to which these provisions apply.

June 2002


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