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Communications Bill
3.39 p.m.
The Minister of State, Department for Culture, Media and Sport (Baroness Blackstone): My Lords, I beg to move that the House do now again resolve itself into Committee on this Bill.
Moved, That the House do now again resolve itself into Committee.—(Baroness Blackstone.)
On Question, Motion agreed to.
House in Committee accordingly.
[The CHAIRMAN OF COMMITTEES in the Chair.]
Lord Avebury moved Amendment No. 105:
- Before Clause 91, insert the following new clause?
The noble Lord said: This group of amendments seeks to implement correctly Articles 10.2 and 10.3 of the authorisations directive which require a national regulatory authority—in our case, Ofcom—to give a company a month to state its views or to remedy breaches where it finds—I stress the word "finds"—that the company,
Under Clause 91 Ofcom is able to initiate enforcement action on the basis of "reasonable grounds for believing" that a telecoms provider is contravening the conditions. If it is to avoid a possible fine, the provider will have to take remedial action that may include paying a person compensation for loss or damage, at the same time as it makes representations to Ofcom to rebut the allegations. We believe that the approach used in Clause 91(1), particularly when combined with Clauses 92(2)(b) and
Article 10.2 requires an NRA to give an undertaking a month to state its views or to remedy breaches when it finds the undertaking to be in breach. By contrast, Clause 91(1) enables Ofcom to do that where it has "reasonable grounds for believing" that the person is in breach. The real significance of the provision appears when Clauses 92(2)(b) and 93(2)(b) are contrasted with Article 10.3 of the directive. That article enables the NRA to take enforcement action and/or to impose financial penalties if the undertaking does not remedy the breaches within the period referred to in Article 10.2; that is to say, the period of one month from the notification of the finding of the breach.
By contrast, Clauses 92(2)(b) and 93(2)(b) respectively enable Ofcom to serve an enforcement notification and to impose a penalty if the notified provider has not taken the necessary steps to remedy the breach during the period allowed under Clause 91; for example, the period of one month from the notification of there being "reasonable grounds for believing" that the provider is in breach. That is plainly not what the directive requires or allows and the Bill should be amended to ensure that enforcement action can be taken and/or a penalty be imposed only where the provider has failed to remedy the breach within the period of a month after notification of a finding that he is in breach.
Amendments Nos. 105, 106 and 107 seek to do that by providing for an investigation to be undertaken by Ofcom before it initiates the enforcement process, although allowance is made for urgent cases under Clause 95. The new clause in Amendment No. 105 starts the process by giving Ofcom the power to undertake an investigation where it has "reasonable grounds for believing" that a condition set under Clause 42 has been contravened.
Amendment No. 106 assumes that the investigation has been conducted, which allows Ofcom to conclude that a person has contravened, or is contravening, a condition set under Clause 42, and the one month's notice is given on a finding rather than on "reasonable grounds for believing". Of course we accept that there may be urgent cases where something needs to be done immediately, and allowance is made for that by the reference across to Clause 95.
We believe that it is in any event wrong in principle for an undertaking to be obliged effectively to take remedial action, including paying compensation, or risk a substantial financial penalty during the period given for making representations in response to "reasonable grounds for believing". It is illogical that a person should have to pay compensation and in effect admit guilt at the same time as he is disputing the allegation of a breach with the regulator. Indeed, this provision could create a charter for the making of spurious allegations of breach.
Amendments Nos. 108 to 118 set out to establish in a similar way a proper three-stage process as in the Competition Act, leading up to the imposition of fines
Your Lordships can see that we are not wedded to any particular wording, but in these two sets of amendments we are trying to be as flexible as possible. We would like the Government to concede that as it stands the Bill omits a vital stage that is implicit in the directive and that Ofcom cannot be said to find that an undertaking does not comply with a condition unless there is a process by which the undertaking has a proper opportunity to rebut the allegation before a determination is made. If we and the Government can agree on that principle, we can discuss with them which of the methods that we suggest would best implement that principle or, as occasionally happens, the Government could come up with a third way of achieving that which would be better than either of the ones that we propose. I beg to move.
Baroness Buscombe: I shall speak to Amendments Nos. 105, 106 and 107 to which my noble friend Lady Wilcox and I have added our names. I shall also speak in support of the remaining amendments in this group. Clauses 91 to 101 of the Bill deal with the enforcement of conditions imposed by Ofcom under Clause 42 of the Bill. Under Clause 91, if Ofcom determines that there are reasonable grounds for believing that there has been a contravention of such a condition, Ofcom can give the person contravening the condition a notification. That notification must specify a period during which the person in contravention must make representations, comply with any conditions of which it is alleged he remains in contravention and remedy the consequences of the alleged contravention. Under Clause 92, if the person in contravention has failed to take all the steps which Ofcom considers appropriate for complying with the condition and remedying the consequences of the alleged contravention, Ofcom can serve an enforcement notification. This imposes a duty on the person in contravention to comply with the enforcement notification.
It is important to note that Ofcom can serve a notification under Clause 91 where there are only reasonable grounds for believing that a person is contravening or has contravened a condition. In contrast, Ofcom can give an enforcement notification only if it is satisfied that there has been a contravention. That means that a much higher standard of proof is required under Clause 92.
Under Clauses 92 and 93 Ofcom can impose a penalty not exceeding 10 per cent of the turnover of the business carried on by the person alleged to be in contravention if Ofcom has given a notification under Clause 91 and the person alleged to be in contravention has not taken the
The oddity of these provisions is that a person alleged to be in contravention of one of the conditions must take the appropriate steps to comply with the condition that it is alleged he has contravened and must remedy the consequences of the alleged contravention even if he believes that he is entirely innocent; otherwise he runs the risk of a substantial financial penalty. He must take those steps when Ofcom merely has reasonable grounds for believing that there has been a contravention rather than being satisfied there has been a contravention. Such a person must take the appropriate steps before Ofcom is satisfied that there has been a contravention and serves an enforcement notification.
That oddity is somewhat like the trial of the Knave of Hearts in Alice's Adventures in Wonderland where the Queen of Hearts decreed,
"INVESTIGATION OF CONTRAVENTION OF CONDITION
(1) Where OFCOM determine that there are reasonable grounds for believing that a person may be contravening, or may have contravened, a condition set under section 42, they may undertake an investigation.
(2) Where OFCOM decide to undertake an investigation under subsection (1), they shall give the person concerned a notice in writing which?
(a) indicates the reasons for the investigation being conducted by OFCOM;
(b) specifies in sufficient detail the condition and alleged contravention in respect of which the investigation is being undertaken; and
(c) specifies the period during which the person has an opportunity to make representation about the matter.
(3) Subject to section 95(3), the period specified under subsection (2)(c) must be a period of at least one month beginning with the day on which the notice is given.?
"does not comply with one or more of the conditions of the general authorisation or the rights of use".
We do that by providing for Ofcom to carry out an investigation during which the undertaking has the right to make representations and present its case before Ofcom initiates the enforcement process.
3.45 p.m.
"sentence first—verdict afterwards".
We respectfully submit that the jurisprudence of the Queen of Hearts is inappropriate for the enforcement provisions in the Bill. I raised that point at Second Reading. We believe that it is important.
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