House of Lords - Explanatory Note
Communications Bill - continued          House of Lords

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Clause 143: Provision of information by OFCOM

328.     This clause places OFCOM under a duty to respond fully, within one week, (unless they have already conveyed the requested information) to any request made to them for information about any of the following:

  • whether or not the person making the request is required under clause 30 to notify OFCOM in advance of his intention to provide a network, service or associated facility;

  • whether a notification submitted by that person under clause 30 is satisfactory;

  • that person's rights, in order to allow him to negotiate his right to network access; or

  • what is required of that person under clause 103 in order to make an application in respect of the electronic communications code.

This clause implements Article 9 of the Authorisation Directive.

Clause 144: Repeal of provisions of Telecommunications Act 1984

329.     This clause repeals certain sections of the Telecommunications Act 1984. One of the principal effects of these repeals will be to abolish the current requirement for persons running telecommunications systems to hold individual or class licences.

*Sections 5 to 8 of the Telecommunications Act 1984 make it a criminal offence to run a telecommunications system without a licence and set out the powers of the Secretary of State and the Director General of Telecommunications to grant licences. Section 9 allows the Secretary of State to designate certain telecommunications systems as "public telecommunications systems". This designation confers additional rights and imposes additional duties on the licensee. Sections 10 and 11 relate to the telecommunications code (see the notes on clause 102). Sections 12 to 15 set out the circumstances in which the Director General of Telecommunications may modify the conditions of telecommunications licences. Sections 16 to 19 deal with the powers of the Director General to enforce compliance with licence conditions. Finally, sections 27A to 27L make provision for standards of performance and service to customers in the telecommunications industry and for procedures for dealing with complaints and billing disputes. These sections also govern the terms upon which deposits may be required from customers, and the circumstances in which operators may disconnect customers.

330.     As a result of the abolition of telecommunications licensing it is necessary to make certain savings and transitional provision. These are set out in paragraphs 3, 7 and 9 - 11 of Schedule 18 (transitional provisions).

331.     Paragraphs 7 and 9 deal with the saving of certain licence conditions relating to significant market power, universal service and accounting. Paragraph 10 makes provision in respect of the payment of licence fees and provides that any licence fee already paid at the point when the licences are abolished should, in so far as it relates to a period of a licence which has not yet expired, be off-set against any administrative charge due under clause 35 and then where there is a remainder refunded to the licensee.

332.     Paragraph 11 enables OFCOM to enforce the licence conditions saved in paragraphs 7 and 9 and any liabilities under paragraph 11 previously exercisable by the Director General of Telecommunications under the Telecommunications Act 1984.

333.      Paragraph 12 provides that the right to terminate an agreement entered into for the purposes of a condition of a licence granted under section 7 of the Telecommunications Act 1984, which entitles a party to it to terminate the agreement if he or another party ceases to be a Schedule 2 public operator, is not to be exercisable by reason of the coming into force of provisions of the Bill providing that corresponding general conditions, access-related conditions or a provision made by an SMP condition are imposed on one or both of the parties to the agreement.

334.     Schedule 2 public operator has the same meaning as in Schedule 1 to the Telecommunications (Licence Modifications) (Standard Schedules) Regulations 1999 (S.I. 1999/2450).

Clause 145: Powers of local authorities in connection with networks

335.     This clause replaces section 2 of the Telegraph Act 1899 and permits local authorities in England, Wales and Scotland to borrow money to provide public electronic communications networks or services, including where those networks or services extend outside their local authority areas.

Clause 146: Grants by Department of Enterprise, Trade and Investment

336.     This clause confers power on the Northern Ireland Department of Enterprise, Trade and Investment ("DETI") to fund expenditure on electronic communications infrastructure and to fund expenditure for any other purposes prescribed by regulations made with the approval of the Department of Finance and Personnel. DETI will have discretionary powers to support financially the development of a regional electronic communications infrastructure in Northern Ireland, specifically the provision of electronic networks and services, and the improvement of the extent, quality and reliability of such networks or services.

Clause 147: Grants by district councils

337.      This clause provides that district councils in Northern Ireland may award grants to persons providing a public electronic communications network, a public electronic communications service, or a facility connected with such a network or service where they believe such network or service benefits their area. Such grants must be for the purposes of compensating such persons for losses sustained in the provision of such networks, services or facilities. Any grant would also need to comply with the European Community rules on state aid. This provision repeals and re-enacts section 97 of the Telecommunications Act, with certain consequential amendments, but only in so far as that provision relates to Northern Ireland.

Clause 148: Interpretation of Chapter 1

338.     This clause provides for the interpretation of defined terms used in Chapter 1 of Part 2 of the Bill.

Chapter 2: Spectrum Use

339.     The existing law governing access to and use of radio spectrum is contained in the Wireless Telegraphy Acts 1949, 1967 and 1998, the Marine, etc., Broadcasting (Offences) Act 1967 and Part VI of the Telecommunications Act 1984. Under section 1(1) of the 1949 Act, it is an offence for any person to establish or use any station for wireless telegraphy or to install or use any apparatus for wireless telegraphy, otherwise than under and in accordance with a licence granted by the Secretary of State. Since radio spectrum is a finite resource, users of spectrum will continue to be licensed as at present, although the licensing and enforcement functions under the above legislation will be transferred to OFCOM (in accordance with clause 2 of and Schedule 1 to the Bill - see the notes for those provisions above).

*The expressions wireless telegraphy, apparatus for wireless telegraphy and station for wireless telegraphy are defined in section 19 of the Wireless Telegraphy Act 1949. Wireless telegraphy means the emitting or receiving of electromagnetic energy of a frequency not exceeding three million megacycles a second, which is equivalent to 3000 Giga-Hertz in modern terminology, (essentially radio signals) for the purposes of conveying messages, sounds or visual images or for the determination of position or distance. Stations and apparatus for wireless telegraphy are stations and apparatus for the emitting or receiving of radio signals.

340.     Chapter 2 of Part 2 of the Bill sets out new functions of OFCOM in relation to radio spectrum (which are in addition to the existing wireless telegraphy functions transferred to OFCOM under clause 2 and Schedule 1). It introduces a new scheme of recognised spectrum access and continues the market-based approach to spectrum management introduced by the Wireless Telegraphy Act 1998 by allowing trading as a means of gaining access to spectrum. Additionally, Chapter 2 of Part 2 and Schedule 17 contain a large number of amendments to the existing law on wireless telegraphy, mainly for the purpose of implementing the new Directives.

Clause 149: General functions of OFCOM in relation to radio spectrum

341.     This clause sets out general functions of OFCOM in relation to radio spectrum. These functions are:

  • to give advice in relation to the use of radio spectrum and to provide other services and maintain records with respect to radio spectrum use within and outside of the United Kingdom, as OFCOM consider appropriate for the purposes of spectrum management.

  • OFCOM may also be required by the Secretary of State to give other advice and to provide other services or to maintain other records for the purpose of securing United Kingdom compliance with any of its international obligations. The services, records and advice may be in respect of spectrum use outside the United Kingdom.

342.     For the purpose of the carrying out of these functions, OFCOM may carry out or commission research and development work on use of radio spectrum, including future developments and any connected matters. OFCOM may, with the consent of the Treasury, also make a grant to any person in order to encourage efficient spectrum-management or use. OFCOM may also charge for any advice given under this clause.

343.     Where OFCOM are required to give advice or provide another service, they may charge for doing so (if they are not required to do so, any charge would be under clause 25.)

Clause 150: United Kingdom Plan for Frequency Authorisation

344.     This clause places OFCOM under a duty to publish a plan (to be known as "the United Kingdom Plan for Frequency Authorisation") setting out frequencies allocated for radio use in the UK that are available for assignment, and the purpose of such allocations. This implements the requirement in Article 5.3 of the Authorisation Directive that there should be a national frequency plan.

Clause 151: Duties of OFCOM when carrying out spectrum functions

345.     This clause sets out the duties of OFCOM when carrying out their functions under the enactments relating to radio spectrum management. OFCOM must have regard in particular to (i) the amount of spectrum available for use; (ii) the present and future demand for spectrum; and (iii) the desirability of promoting efficient management and use of the radio spectrum, the economic and other benefits of radio spectrum use, the development of innovative services and competition in the provision of electronic communications services. In regard to functions other than setting licence fees under section 2 of the Wireless Telegraphy Act 1998, OFCOM may disregard such of these matters that do not appear relevant to the case in question. OFCOM must resolve any conflict between their duties under this clause in the manner they think best in the circumstances. However, OFCOM must give priority to their duties under clauses 3 to 6 in the event of any conflict between those duties and their duties under this clause. This implements Article 9(1) of the Framework Directive.

Clause 152: Advisory service in relation to interference

346.     OFCOM may advise and help people complaining of interference with wireless telegraphy - in other words where the fulfilment of the purposes of the telegraphy is prejudiced by any emission or reflection of electro-magnetic energy.

Clause 153: Directions with respect to the radio spectrum

347.     This clause gives the Secretary of State a power, by order, to give general or specific directions to OFCOM about the carrying out of their spectrum functions. They may include a direction (i) to reserve certain frequencies for different classes of use, for example broadcasting, mobile telecommunications, private business systems, air traffic control or radio astronomy, or within a class, for example for the provision of additional digital television services or radio broadcasting multiplexes; or (ii) to exercise their powers under the proviso to section 1(1) of the Wireless Telegraphy Act 1949 and under sections 1, 3 and 3A of the Wireless Telegraphy Act 1998 in accordance with the provisions of the direction. This power is in addition to the power conferred on the Secretary of State by clause 5 to give directions for limited purposes in accordance with which OFCOM must exercise their functions.

*The proviso to section 1(1) of the Wireless Telegraphy Act 1949 allows classes or descriptions of wireless telegraphy stations or apparatus to be exempted from licensing requirements by regulations made by the Secretary of State (such regulations will be made by OFCOM when the relevant provisions of the Bill come into force). Section 1 of the Wireless Telegraphy Act 1998 (as amended by clause 158) allows the Secretary of State to make regulations setting the fees to be paid on the issue and renewal of wireless telegraphy licences and grants of recognised spectrum access, and is subject to section 2 of that Act (which, as substituted by paragraph 144 of Schedule 17 to the Bill, allows the Secretary of State to charge licence fees above the cost of exercising wireless telegraphy functions ("administrative incentive pricing")). Section 3 of the 1998 Act allows the Secretary of State to make regulations providing for wireless telegraphy licences to be awarded by means of spectrum auctions. Finally, section 3A of the 1998 Act is introduced by clause 158. The regulations provided for in sections 1 to 3A of the 1998 Act will be made by OFCOM when the relevant provisions of the Bill come into force.

Clause 154: Procedure for directions under s.153

348.     An order containing a direction under clause 153 must state its purpose, unless the direction requires OFCOM to reserve certain frequencies for specified uses or it requires OFCOM to exercise their powers under the proviso to section 1(1) of the Wireless Telegraphy Act 1949 or under section 1, 3 or 3A of the Wireless Telegraphy Act 1998 in a certain way. Before making an order containing a direction under clause 153, unless urgency makes it inexpedient to do so, the Secretary of State must consult OFCOM and such other persons as she thinks fit. A draft of the order must be laid before Parliament and approved by each House, except where the Secretary of State considers the urgency of the case requires the order to be made straight away. An order containing a direction given by the Secretary of State in an urgent case ceases to have effect at the end of 40 days (excluding Parliamentary recesses) unless it is approved by a resolution of each House of Parliament.

Clause 155: Special duty in relation to television multiplexes

349.     If OFCOM reserve frequencies for the broadcasting of television programmes, they are under a duty, so far as practicable, to secure that sufficient multiplex capacity is available for qualifying services on television multiplexes licensed under the Broadcasting Act 1996. This is in accordance with condition 1 of Part B of the Annex to the Authorisation Directive.

    *qualifying service has the same meaning as is given in section 2 of the Broadcasting Act 1996.

Clause 156: Grant of recognised spectrum access

350.     Clauses 156 to 159 introduce a new scheme of "recognised spectrum access". Recognised spectrum access ("RSA") will be available, in circumstances to be specified by OFCOM in regulations, to persons who transmit radio signals for reception in the United Kingdom, but who are not, for whatever reason, required to hold a licence under the Wireless Telegraphy Acts. Possible examples include certain satellite services, radio astronomy and Crown users of spectrum.

351.     Clause 156 sets out the procedures that apply to the grant by OFCOM of recognised spectrum access. Subsection (3) allows OFCOM to specify, amongst other things, the frequencies used, reception coverage and strength and type of signal that are the subject of the grant. Subsection (5) allows OFCOM to make a grant of RSA subject to such restrictions and conditions as they think fit, for example as to strength and type of signal, times of use, sharing of frequencies, or matters which must be (or must not be) transmitted or broadcast under the terms of the grant.

352.     Schedule 5 makes additional detailed provision about the procedure for the grant, modification and revocation of RSA. OFCOM are to prescribe procedures for applications for a grant of RSA including requirements that must be fulfilled before, and restrictions and conditions subject to which, a grant will be made. Where an applicant fails to provide all the information reasonably required by OFCOM, their application may be refused. Any proposed refusal of an application must be notified to the applicant, stating the reasons and specifying the period (at least a month) within which the applicant may make representations about the proposed refusal. Similarly, if OFCOM propose to revoke or modify a grant or the restrictions or conditions to which it is subject, they must notify the person to whom the grant was made and give him the opportunity to make representations or, if applicable, to remedy a contravention of the restrictions or conditions of the grant.

Clause 157: Effect of grant of recognised spectrum access

353.     This clause places OFCOM under a duty to take into account any grants of RSA to the same extent as if a licence under section 1 of the Wireless Telegraphy Act 1949 had been granted when (i) granting wireless telegraphy licences; (ii) making grants of RSA; and (iii) carrying out any of their other functions under the enactments relating to radio spectrum management where it is appropriate to have regard to whether wireless telegraphy licences are in force or to their terms.

Clause 158: Charges in respect of grants of recognised spectrum access

354.     This clause amends section 1 of the Wireless Telegraphy Act 1998 to allow OFCOM to set the fees to be paid on the making of a grant of RSA. This clause also inserts a new section 3A into the 1998 Act that makes provision for OFCOM to determine applications for the grant of RSA by means of an auction and for the procedures to be followed in such cases.

Clause 159: Conversion into and from wireless telegraphy licences

355.     Upon application, OFCOM may (in accordance with regulations made by them) convert a wireless telegraphy licence into a grant of RSA and vice versa.

Clause 160: Payments for use of radio spectrum by the Crown

356.     This clause allows the Secretary of State to make payments (out of money provided by Parliament) for the operation by the Crown of stations and apparatus for wireless telegraphy or in respect of any grant of RSA made to the Crown. The Wireless Telegraphy Act 1949 does not bind the Crown, which is therefore exempt from the obligation to obtain a licence for its use of spectrum. However, in order that public sector users should have incentives to use spectrum efficiently, a commitment was given during the passage of the Wireless Telegraphy Act 1998 that the Crown would pay for access to spectrum on a comparable basis to the private sector.

Clause 161: Limitations on authorised spectrum use

357.     Where OFCOM consider it appropriate to limit the number of wireless telegraphy licences or grants of RSA on certain frequencies, or for certain uses, for the purpose of securing efficient spectrum use, they must make an order imposing the limitations. The purpose of this duty is to ensure fairness between potential users. The order must set out the criteria OFCOM will apply in limiting the number of licences and grants and deciding to whom to issue licences or grants of RSA. The criteria must be objective, non-discriminatory, proportionate and transparent. OFCOM must keep the order under review. This clause implements Article 7 of the Authorisation Directive.

Clause 162: Terms etc. of wireless telegraphy licences

358.     This clause adds three new subsections to section 1 of the Wireless Telegraphy Act 1949. Subsection (2A) provides that any terms, provisions and limitations of a licence granted under that Act may include (i) provisions relating to the strength or type of signal, times of use, and frequency sharing and (ii) prohibitions on or obligations requiring the transmission or broadcasting of particular content by the licence holder. Subsection (2B) enables licences to be granted in relation to stations or apparatus described by reference to specified factors or in relation to a particular station or apparatus. Subsection (2C) provides that a licence must not duplicate conditions already imposed by general conditions under this Bill: this new subsection implements Article 6.4 of the Authorisation Directive.

Clause 163: Exemption from need for wireless telegraphy licence

359.     This clause amends the Wireless Telegraphy Act 1949 to require OFCOM to exempt certain stations or apparatus from the requirement to be licensed under that Act where their use would not cause undue interference (as redefined in clause 180). This implements Article 5.1 of the Authorisation Directive.

Clause 164: Bidding for wireless telegraphy licences

360.     This clause makes some procedural amendments to section 3 of the Wireless Telegraphy Act 1998, which governs the conduct of spectrum auctions for wireless telegraphy licences. The principal changes are to combine the separate regulations and notices which at present govern spectrum auctions, to introduce greater flexibility on how bids may be expressed and to add a new provision allowing OFCOM to require payments to be made by a person who successfully bids for a wireless telegraphy licence but subsequently refuses to take the licence applied for.

361.     Paragraph 19 of Schedule 18 (transitional provisions) provides that any procedures set out in a notice issued by the Secretary of State under regulations made under section 3 of the Wireless Telegraphy Act 1998 before the commencement of this clause shall have effect as if prescribed by OFCOM by regulations under that provision.

Clause 165: Spectrum trading

362.     This clause gives OFCOM a power to make regulations authorising the holder of a wireless telegraphy licence or the holder of a grant of RSA to transfer the rights and obligations under their licence or grant of RSA to another person. This will enable the development of a secondary market in licences and grants of RSA where this is permitted by OFCOM.

363.     Subsections (1) and (2) provide that regulations authorising spectrum trading may allow some or all of the rights and obligations attached to a wireless telegraphy licence or grants of RSA to be transferred to another person, or for such rights and obligations to be exercised concurrently by the transferee and the transferor. Sharing of rights could occur, for example, if it were intended that the licence or grants of RSA grant would revert after a period of time to the original holder, who meanwhile would remain responsible for ensuring compliance with the terms and conditions. Subsection (2) will thus allow secondary spectrum trading to take place in different ways and is designed to allow maximum flexibility.

364.     Subsection (3) sets out the range of provisions that may be included in regulations authorising spectrum trading. For example, under subsection 3(c) and (e) regulations may require the approval of OFCOM before a trade can be made, and may make trades subject to compliance with conditions imposed by OFCOM. Under subsection (3)(i), the regulations may require that trades be notified to OFCOM both before and after the trade takes place (and notification after the trade will be made a requirement because Article 9.4 of the Framework Directive requires it).

365.     Subsections (4) and (5) provide that a transfer of rights and obligations under a wireless telegraphy licence or grant of RSA will be void unless it is made in accordance with either: (i) regulations authorising spectrum trading made under this clause; or (ii) the provisions of an existing wireless telegraphy licence which allows the holder to confer the benefit of the licence on another.

Clause 166: Variation and revocation of wireless telegraphy licences

366.     This clause substitutes a new section 1E of the Wireless Telegraphy Act 1949. The principal changes are an increase from 28 days to one month as the standard period of notice that OFCOM must give, new provisions about shorter notice in cases of serious and repeated breaches and urgency, and removal of the need for notice when the variation or revocation is at the request of, or with the consent of, the licence-holder. The first two of those changes implement paragraphs 2, 5 and 6 of Article 10 of the Authorisation Directive (see also the notes on clause 169 below).

367.     In addition, paragraph 8 of Schedule 17 amends section 1D of the Wireless Telegraphy Act 1949 to provide that any application for a grant of a wireless telegraphy licence shall be determined in accordance with procedures prescribed in regulations made by OFCOM. Any decision on such an application must, in most cases, be published by OFCOM within six weeks. Paragraph 18 of Schedule 18 (transitional provisions) provides that any procedures set out in a notice under section 1D of the Wireless Telegraphy Act 1949 prior to the commencement of clause 164 shall be treated as if they are regulations made under the amended section 1D.

Clause 167: Wireless telegraphy register

368.     OFCOM may, by regulations, set up a public register of information about the holders of wireless telegraphy licences and persons to whom grants of RSA have been made. This may also include details about the licences and frequencies assigned.

Clause 168: Information requirements in relation to wireless telegraphy licences

369.     This clause amends the Wireless Telegraphy Act 1949 by inserting new sections 13A and 13B. Section 13A allows OFCOM to require, by issuing a notice, any user of a wireless telegraphy station or apparatus to provide information relating to their use of the station or apparatus and any related matters to OFCOM for statistical purposes: the limitation on the purpose for which information may be required implements Article 11.1(b) of the Authorisation Directive. Such a request must be proportionate (which implements the requirement in Article 11.1), and OFCOM must explain why they are demanding that information and the statistical purposes for which the information will be used (which implements Article 11.2). A person who fails to provide such information is guilty of an offence, although it is a defence to show that it was not reasonably practicable for him to comply within the period allowed, but that he took all reasonable steps to comply after that period had expired. It is also an offence for a person to provide information to OFCOM under this clause that he knows is, or is reckless as to whether it is, materially false.

370.     Section 13B imposes a requirement on OFCOM to publish a statement of their policy on the use of their powers under section 13A and the statistical purposes for which they will use any information gathered and to have regard to such statement for the time being in force when exercising the powers under section 13A.

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