TELECOMMUNICATIONS: An Introduction

PREISKEL & CO LLP  

Chambers & Partners Telecoms Overview Section

Preiskel & Co’s Views on the European Telecoms Market and Significant Legal Developments

Introduction 

Reliable telecoms and the ability to communicate are crucial for businesses, governments, medical treatment, individuals and society and also from a security perspective, from averting natural disaster to military defence and policing. There is a wide spectrum of institutions that depend on telecoms to provide safety.

Society at large owes the telecommunications and technology industry a great deal for providing the connectivity enabling businesses and governments to function during the COVID lockdowns, whilst enabling consumers to order food and other goods whilst stores were closed. Thanks to the combination of fixed and mobile broadband connectivity, together with cloud-hosted telephony systems, many individuals and businesses (and dare I say governments) have been able to function surprisingly effectively away from the physical office.

In the meantime, this reliance of society on telecoms has brought about concerns as to data security. Indeed, there is rightly an ongoing regulatory focus in the UK and EU as to telecoms security and for good reason.

A) Regulatory Developments 

In this annual update, Preiskel & Co has accordingly decided to start with the latest regulatory developments concerning security of telecoms infrastructure.

1) UK New Telecoms Security Regulations and Code of Practice

The UK Government has decided to implement new Telecoms Security Regulations together with a Code Of Practice. These will apply to network and service providers. The relevant department, the Department for Digital, Culture, Media & Sport, conducted a consultation exercise for these new regulations and the code of practice from March to May of 2022.

The Government has now published, in broad terms, its response to the consultation exercise. This states that there have been changes to the proposals and 'clarifications'. However, the detail of these changes has not yet been published as at the time of writing. Nonetheless the proposals and the code of practice will be put in place very soon.

The EU also introduced its own communications security Act, the European Cyber Resilience Act, which indicates the increasing focus on regulating the communications sector in terms of security. Perhaps unsurprisingly, there are differences between the Acts, which means in effect that any telecoms carriers operating in the UK will need to comply with the EU and UK security related regulatory requirements.

2) The European Electronic Communications Code ('EECC')

On 11 December 2018, the European Commission published the new Directive establishing the EECC in order to revise and update the current EU communications regulatory framework. The implementation date for the EECC was 21 December 2020 and it is the most important regulatory change in the EU for some time, so merits particular attention for the remainder of this overview article.

The UK agreed to implement the EECC and did so by the Electronic Communications and Wireless Telegraphy (Amendment) (European Electronic Communications Code and EU Exit) Regulations 2020. These Regulations made updates to the Communications Act 2003 and the Ofcom General Conditions of Entitlement as well as the Wireless Telegraphy Act 2006.

The EECC merged and updated the previous Framework Directive, Authorisation Directive, Access Directive and Universal Service Directive (being the four main Directives of the current regulatory framework). The EECC should be considered in association with the BEREC Regulation, which formalises BEREC as a fully-fledged EU Communications Regulatory Agency with broader powers.

This new legal framework is of utmost importance for the communications sector and has as a number of core objectives including: (i) facilitation of the roll-out of high-capacity networks throughout Europe; (ii) consumer protection; (iii) new regulation of OTTs; and (iv) efficient use of spectrum. Also, this was a regulatory shift away from pure competition law, brought about by the EECC.

Notwithstanding the BEREC Regulation, the emphasis of regulation and enforcement still rests largely in the hands of the Member States.

2.1) Summary of the Key Changes and Objectives of the EECC

The following is a short summary of the above four core objectives.

Incentivising very high-capacity networks: The EECC is intended to make it easier for telecoms providers investing in 5G and very high-capacity fixed infrastructure to fulfil their business plans and investment objectives. A key difference to help achieve this is a shift from the pure competition law-based approach to regulating network roll-out and instead focusing on the infrastructure layer and encouraging co-investment. The thinking is that if the new regulatory approach will provide potentially higher returns for investors, this would in turn facilitate the roll-out of high-capacity networks.

Regulation of OTTs: Traditional telecoms providers will be pleased that the EECC also widens the definition of electronic communications service, to include certain internet phone and messaging services within the scope of telecoms regulation. The intention is to help level the playing field for competition, so for those services which will now be subject to telecoms regulation for the first time, this will represent a significant change.

Consumer Protection: Consumers are to benefit from a whole series of measures, including Mobile and Fixed Termination Rates ('Union-wide voice termination rates'). This should not be confused with the 19 Euro Cents (+VAT) cap on the retail cost of international calls within the EU for consumers effective as of 15 May 2019, already in force under The Roaming Regulation.

Efficient Use of Spectrum: This will include new 'use it or leave it' provisions, simplifying and harmonising spectrum licence conditions and providing a minimum 20-year licence period for wireless broadband service provision.

2.2) Other areas addressed by the EECC 

1. With regards to the licensing, the general authorisation is simplified by means of a basic notification process. Preiskel & Co and its telecoms clients have already seen the benefit of this simplification when advising IoT providers on various innovative pan-European IoT projects.

2. With respect to Universal Service Obligations, affordable and adequate broadband internet service is included.

3. Numbering – to include allocations to non ECS/ECN providers

4. Porting – gaining provider carrier switching (of most relevance in the UK)

5. Network security and resilience.

Concluding Remarks 

During 2023 we can look forward to an increasing number of successful and innovative IoT deployments, especially given the improvements in mobile broadband connectivity and the staggering amount of investment being ploughed into AI and IoT companies and use cases, more broadly.

On the regulatory front, the reimposition of roaming charges will be a reminder (painful perhaps) of the UK no longer being strictly bound by EU Regulations. It will be interesting to see to what extent the UK regulatory position diverges from the EU. One departure will be on the security side with the UK New Telecoms Security Regulations and Code of Practice. The EECC implementation marks a distinct shift away from a pure competition law approach to the regulation of the telecoms industry.

Finally, it was great to once again witness a packed Mobile World Congress in Barcelona. With top executives once again attending the major telecoms industry events, including Capacity Awards where Danny Preiskel is once again a judge, it should all help stimulate further interesting developments to be reported on next year.

On that note, hot off the press at the time of writing is the bid by Vodafone to acquire its rival MNO, Three UK, which if approved, could signal the start of further MNO consolidation throughout Europe and thereby enhance the market capitalisation of many a European MNO. Watch this merger development closely!

Danny Preiskel 

Senior Partner

PREISKEL & CO LLP