CMS Quarterly Communications Update - October 2012

Quarterly update summarising regulatory and legal developments from the last three months in the communications, media and satellite sectors in Europe.

This edition includes contributions from the United Kingdom, the Czech Republic, France, Hungary, Italy, Slovakia and Spain.

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Quarterly update summarising regulatory and legal developments from the last three months in the communications, media and satellite sectors in Europe.

This edition includes contributions from the United Kingdom, the Czech Republic, France, Hungary, Italy, Slovakia and Spain.

UNITED KINGDOM

COMMUNICATIONS

Ofcom statement on the auction of spectrum in the 800 MHz and 2.6 GHz bands

On 24 July 2012, Ofcom published a statement and draft auction regulations following a series of consultations on this issue. The statement sets out Ofcom's decisions for the auction of wireless telegraphy licences for the use of 790 MHz to 862 MHz spectrum (800 MHz band) and 2500 MHz to 2690 MHz spectrum (2.6 GHz band).

The statement contains Ofcom's assessment of likely future competition in markets for the provision of mobile electronic communication services after the conclusion of the auction of the 800 MHz and 2.6 GHz bands. It outlines the measures that will be taken to promote competition following the auction, including auction rules. These measures are designed to ensure that there are four credible national wholesalers, each with access to sufficient spectrum to compete. Spectrum will be reserved for a bidder other than Everything Everywhere, Telefónica and Vodafone. In the statement, Ofcom identify the reserve prices for each lot of spectrum to be auctioned. Coverage obligations will be contained in one of the 800 MHz licences, intended to promote the widespread availability of next generation mobile broadband services. Ofcom's decision also sets out the technical and non-technical licence conditions, which include a set of conditions designed to ensure that mobile use of the 800 MHz band can co-exist with neighbouring digital terrestrial television use.

Ofcom are planning to hold a number of events that will allow interested parties to familiarise themselves with the auction design and procedures. These are likely to include a seminar to explain the auction rules. Ofcom will also hold mock auctions for those interested in taking part in the auction.

On 2 October 2012, Ofcom announced that the auction process is on schedule; bidding for licences is expected to begin in early 2013.

For more information please go to: http://stakeholders.ofcom.org.uk/binaries/consultations/award-800mhz/statement/statement.pdf

Ofcom decision to vary Everything Everywhere's 1800 MHz spectrum licences

On 21 August 2012, Ofcom announced their decision to grant Everything Everywhere variations to its existing 1800 MHz licences to enable it to provide services using LTE and WiMax technologies in those frequencies. Everything Everywhere will be the only operator capable of launching its own LTE services prior to the auction of the 800 MHz and 2.6 MHz bands in 2013 (see above). In Ofcom's view, there is potential for material consumer benefits in the form of better quality data services available to Everything Everywhere's customers. Ofcom consider that the competitive advantage that Everything Everywhere may enjoy is unlikely to result in an enduring advantage that distorts competition.

The variation of the licences came into force on 11 September 2012.

For more information please go to: http://stakeholders.ofcom.org.uk/consultations/variation-1800mhz-lte-wimax/statement

Ofcom close investigation into Everything Everywhere's compliance with General Condition 23

On 22 October 2012, Ofcom announced that they have closed their investigation into Everything Everywhere's compliance with General Condition 23 without further enforcement action. General Condition 23 prescribes a number of obligations in relation to the sale and marketing of mobile telephony services. Ofcom's investigation examined compliance by Everything Everywhere, trading as Orange, and its resellers. Ofcom identified areas of weakness in compliance and have accepted written assurances from Orange in relation to specific improvements that the mobile operator intends to make.

For more information, please go to: http://stakeholders.ofcom.org.uk/enforcement/competition-bulletins/closed-cases/all-closed-cases/cw_01074/?utm_source=updates&utm_medium=email&utm_campaign=cw_01074

Ofcom decision on alternative dispute resolution schemes

The Communications Act 2003 places a duty on Ofcom to secure the availability of Alternative Dispute Resolution schemes for domestic and small business customers. In accordance with General Condition 14.5, all communications providers are required to participate in an approved Alternative Dispute Resolution scheme. In a consultation document published in May 2012, Ofcom set out their view that some aspects of the schemes were leading to inconsistent outcomes for consumers, contrary to the requirements of the 2003 Act. In particular, these were due to discrepancies between the two available schemes: Ombudsman Services Communications (OS) and Communication and Internet Services Adjudication Schemes (CISAS).

Ofcom have decided to address this issue by modifying the conditions for their approval of the schemes. This involves the introduction of a new condition of approval, which requires that the Schemes adopt a common set of 'Decision Making Principles', including the development by each of guidelines on awarding compensation.

For more information please go to: http://stakeholders.ofcom.org.uk/binaries/consultations/adr-review-12/statement/statement.pdf

Regulatory financial reporting: a review

The current framework for BT's regulatory financial reporting dates from 2004. Since then, both technology and the use of financial data have evolved significantly. In particular, there has been increased focus on detailed costing data for the development and scrutiny of charge controls and in resolving disputes. There is dissatisfaction on all sides with the current regime: communication providers' confidence in the published financial statements has gradually been eroded; BT considers that it is required to publish unnecessary levels of detail; and Ofcom find that they need to make material adjustments to reported information in order to make regulatory decisions. Following publication of BT's most recent financial statements for 2012, on 31 July Ofcom's proposals for a review were set out. Stakeholders' views and suggestions as to how to make regulatory financial reporting better for the future are sought.

Responses to this consultation are requested by 2 November 2012.

For more information please go to: http://stakeholders.ofcom.org.uk/consultations/regulatory-financial-reporting/summary

Ofcom decision on next-generation text relay services

On 17 October 2012, Ofcom published a review on relay services. All fixed and mobile communications providers are required under General Condition 15 to provide access for customers to a text relay service, designed for hearing-impaired and speech-impaired users. In practice, communications providers have met this obligation by connecting to the text relay platform operated by BT. Prior to the publication of Ofcom's statement on next-generation text relay services, BT was required by Universal Service Condition 4 to provide text relay services to other communications providers on fair, reasonable and non-discriminatory terms. Ofcom revoked Universal Service Condition 4 on 17 October with immediate effect. Ofcom have amended General Condition 15 with the effect that communications providers are obliged to provide next-generation text relay services by 18 April 2014. These obligations are intended to ensure implementation of two-way text and two-way speech with live text, using voice and data connections simultaneously. Ofcom have decided against introducing video-relay obligations at this time.

The full statement, including the amended text of General Condition 15 can be found here: http://stakeholders.ofcom.org.uk/binaries/consultations/relay-services-review-12/statement/statement.pdf

Ofcom consultation on cost modelling for the Narrowband Market Review Network Charge Control

Ofcom have published a consultation on their approach to cost modelling in the event that they continue to impose a Network Charge Control on BT as a consequence of the Narrowband Market Review. Ofcom propose to depart from their current approach in two respects. First, taking account of the European Commission's 2009 'Recommendation on the regulatory treatment of fixed and mobile termination rates in the EU', Ofcom propose to base any charge control on forward-looking long-run incremental costs. Second, Ofcom propose to base their cost model on next-generation network technology rather than the time-division multiplexing technology currently used by BT. In Ofcom's view, next-generation network technology can now reasonably be considered as the most efficient available technology that performs the same function as the current technology.

Responses to the consultation are requested by 9 November 2012.

For the consultation document, please go to: http://stakeholders.ofcom.org.uk/binaries/consultations/narrow-band-market-review/summary/condoc.pdf

Ofcom's provisional conclusions in a dispute regarding BT's Standard Interconnect Agreement

On 1 October 2012, Ofcom published their provisional conclusions in a dispute between BT and each of Everything Everywhere, H3G and Telefónica. BT's Standard Interconnect Agreement governs telephony services provided by both BT and the other operators party to the agreement. The mobile network operators submitted a dispute to Ofcom concerning clauses relating to charges. The relevant provisions permit BT to amend charges...