Friday, December 23, 2016

United Kingdom – Scottish Government plans for independence, splitting the single telecommunications market and requiring new regulators

The Scottish Government has published its plan for Brexit, which amounts to a massive shopping list of further devolved powers, so much that there would be nothing left for Westminster or Whitehall. A possible exception is defence, on which the Scottish National Party (SNP) violently disagrees with the UK government. The choice it offers is independence in name or independence called something else.

Its preferred option for Scotland is independence from the United Kingdom and membership of the EU, though it is scarcely expanded on. This is despite the implication of the application for Article 50 TEU finally destroying the fiction of an EU membership route via Article 48 TEU. The only mechanism after Article 50 had been invoked would thus appear to be accession via Article 49 TEU, which might take several years, indeed the application would probably not be possible until independence had been completed  (i.e., after a referendum and full transfer of powers). For the present, the polls suggest that a referendum on independence would fail. The effects for telecommunications are an entirely new system of governance, with ministry and policies, regulatory authority and market analyses, appellate body and parliamentary oversight committee, with new licences for all operators.

Its second best option is for the UK to remain in the EEA, the famous ‘Norway option’. This is so close to the status quo as to require little comment, other than that it seems hardly to be Brexit at all. For the purposes of telecommunications the effects are limited, primarily downgrading of the United Kingdom from an influential player in the European Parliament and Council to being a registered lobbyist. It would also be downgraded in the European regulatory networks (ERNs).

Its third best option, and much the most convoluted, is for the UK to leave the EU and for Scotland to join (or remain) in the European Economic Area (EEA) and European Union Customs Union (EUCU). The required devolution of powers to Scotland looks like dominion status or the Irish Free State (Eire). For telecommunications it requires splitting the single UK market, including all existing licences, and the creation of a new regulatory authority and system of appeals. It would also require a Scottish competition authority. The issue of data protection is more complex, but should the UK vary its regime from the General Data Protection Regulation (GDPR), then moving personal data between Scotland and England (e.g., within a bank or supermarket chain) would seem to require some special legal framework. This proposal looks contrived, supported by references to the treaty status of the Channel Islands, Faroe Islands (Føroyar), Liechtenstein, and Spitsbergen.

No attempt was made to consider how long it would take to put in place the necessary legislation and institutions for the options. In particular, there would be an increase in workload for the Scottish Parliament, perhaps doubling or tripling its present activities.

References

Ewan Sutherland (2013) “Independence and the regulatory state - Telecommunications in Scotland and the rest of the United Kingdom” Telecommunications Policy 37 (11) 1046-1059.
http://dx.doi.org/10.1016/j.telpol.2013.02.002

Ewan Sutherland (2017) “The implications of Brexit for the governance of telecommunications markets in the United Kingdom” Digital Policy, Regulation and Governance, in press
http://www.emeraldinsight.com/loi/info


Thursday, November 17, 2016

United Kingdom - how fast is broadband?


One of the complaints made in the United Kingdom is that broadband is slowband or broadbad or some other pejorative term, or that it is faster in Bucharest or Ulan Bator or some other exotic location than in London.

Measuring the technical performance of networks is seldom straightforward. For example, much can depend on the Wi-Fi router in individual homes or on the antenna in a smartphone.

The Measurement Lab provided a data set for Google that allows individuals to select countries and time periods, which can be plotted in various ways. Using the download data set, the chart shows the UK with some Asian and Scandinavian rivals, with the result being a reasonably respectable performance. Australia is included because it launched its National Broadband Network (NBN) programme, though to no obvious effect.

Download speeds in Mbps
Data source.


While download speed measures the ease of, say, binge-watching Game of Thrones, it is also necessary to consider those who create content and must upload it.

While data are available for fewer countries and a much shorter time period, there is still an overall picture of a group of leaders and another of followers.

Upload speeds in Mbps
Data source.


The European Commission also provides annual data on a large number of indicators.

Amongst those of interest is the availability of NGA broadband in households. In this the UK has shown a substantial improvement.

Data source.


The EU also provides data on household adoptions at different speeds. While the UK does well at 10 Mbps, its performance deteriorates significantly at 30 and, especially, at 100 Mbps.

Share of household subscriptions at advertised rates of more than 10 Mbps
Data source.


Share of household subscriptions at advertised rates of more than 30 Mbps
Data source.


Share of household subscriptions at advertised rates of more than 100 Mbps
Data source.


Looking at businesses with high speed connections, the UK shows a somewhat poorer performance.


Data source.


The analysis by sector provides some insight into that poorer performance.


Data source.


There is some variation within the UK in terms of adoption, which OFCOM reports in terms of the four 'nations'.

Broadband take-up at home (Source: OFCOM Communication Markets Reports)







Friday, October 14, 2016

United Kingdom – The Great Repeal Bill – implications for telecommunications #Brexit

Introduction

The Rt Hon Theresa May MP, Prime Minister, has announced that shortly after the invocation of Article 50 TEU in the first quarter of 2017, a Great Repeal Bill will be presented to Parliament. However, when it becomes the Great Repeal Act (GRA), perhaps with some more prosaic name, it would not have immediate effect, but would be triggered on the great day of Brexit, presumably a public holiday with street parties and fireworks, in the first quarter of 2019.

While negotiations might be extended beyond the two year period, this seems increasingly unlikely, since it requires unanimity amongst the member states. Separately, there will be a trade agreement between the EU and the United Kingdom.

Despite its name, the GRA will repeal very little, but instead turn great swathes of the EU acquis into British law. However, the full scope of this is unclear, whether it encompasses all treaties, regulations, recommendations, decisions and standards, or will specify only some of these.

The Secretary of State for Exiting the EU has made clear that the GRA will end the primacy of the EU acquis and of the Court of Justice of the European Union (CJEU), with legal cases ending in the Supreme Court of the United Kingdom. However, it is likely that in matters of the interpretation of laws derived from the EU acquis, British courts would consider CJEU rulings to be persuasive.

European Communities Act 1972

The venerable European Communities Act (ECA) would be repealed, with the legal basis of all the related statutory instruments (SIs) being transferred to the GRA.

Statutory instruments

The requirement for the revision and repeal of elements of the EU acquis accumulated over four decades is enormous. The intention of HMG appears to be to make these changes primarily by means of statutory instruments.

This has already caused some upset. It has been argued that Brexit was supposed to restore the supremacy of parliament, not for the bulk of the legal changes to be made with minimal parliamentary scrutiny, not even by the EU committees of the two houses of parliament.

Some of the changes are expected to be by Henry VIII clauses, in which statutory instruments amend acts of parliament. There is an obscure irony here, since the historical parallel has been drawn between leaving the EU and the decision of HM King Henry VIII to leave the Roman Catholic Church.

In telecommunications, changes to the Communications Act 2003 can readily be foreseen, which would be likely to be amended by “Henry VIII clauses”. For example, it would be necessary to remove references to the European Commission and completion of the single market (see Table 1).

Table 1               Reference to the European Union in the Communications Act 2003

s.4
Duties for the purpose of fulfilling Community obligations:
e.g. “a requirement to secure that OFCOM’s activities contribute to the development of the European internal market” and “to promote the interests of all persons who are citizens of the European Union”
s.25
Community requirement to provide information:
“It shall be the duty of OFCOM to comply with the requirement”
s.50
Delivery of copies of notifications etc:
“The relevant person must send to the European Commission” copies of various notices, with copies of some to “regulatory authorities of the other member States”
s.66
Designation of universal service providers:
“they must give a notification of that designation, or of that fact, to the European Commission”
s.77
Imposition of privileged supplier conditions:
“special or exclusive rights” has the same meaning as in Art. 86 TEU (now Art. 106 TFEU)
s.79
Market power determinations:
(2) In identifying or analysing any services market for the purposes of this Chapter, OFCOM must take due account of all applicable guidelines and recommendations which—
(a) have been issued or made by the European Commission in pursuance of the provisions of a Community instrument; and
(b) relate to market identification and analysis.
(3) In considering whether to make or revise a market power determination in relation to a services market, OFCOM must take due account of all applicable guidelines and recommendations which—
(a) have been issued or made by the European Commission in pursuance of the provisions of a Community instrument; and
(b) relate to market analysis or the determination of what constitutes significant market power.
And
(7) References in this section to guidelines and recommendations issued by the European Commission and to a Community instrument include references, respectively, to guidelines and recommendations issued after the commencement of this section and to a Community instrument made after the commencement of this section.
s.81
Delivery of copies of notifications under ss. 79 and 80:
OFCOM must send copies to the European Commission
s.82
European Commission’s powers in respect of proposals:
Obligation to comply with decisions of the EC in respect of the procedure Art. 7(4) of Directive 2002/21/EC.
s.83
Special rules for transnational markets:
Obligation to comply with the procedure in Art. 15(4) of Directive 2002/21/EC
s.84
Review of services market identifications and determinations:
“the duty of OFCOM to carry out such a further analysis of a services market as soon as reasonably practicable after recommendations are made by the European Commission”
s.89
Conditions about network access in exceptional cases:
OFCOM may set the additional SMP conditions if it has informed the EC and it has approved.
s.91
Conditions about regulation of services etc. for end-users:
Obligation to inform the EC
s.92
Conditions about leased lines:
To use a list of standards published by the EC.

The current legislative proposals of the EC create trickier judgements as to what needs to be rolled over in British law:
  • ·         Proposal for a European Electronic Communications Code - COM(2016) 590;
  • ·         Proposal for a Regulation as regards the promotion of Internet connectivity in local communities - COM(2016) 589; and
  • ·         5G for Europe: an action plan - COM(2016) 588

Roaming regulations

Controls over retail and wholesale prices for roaming within the EU and EEA have been implemented by a series of regulations: (EC) No 717/2007, (EC) No 544/2009, (EU) No 531/2012, and (EU) 2015/2120. These apply to operators in the EU and the EEA, requiring them to conform to ever lower price caps, intended to eliminate roaming charges by mid-2017.

Additionally, there are draft guidelines published by the EC. The first draft was withdrawn by President Juncker and Prof Dr Selmayr, to be rewritten in a more political form, that is harsher to the operators.

There is little purpose in transposing the roaming regulations into United Kingdom law, since the mobile operators would cease to have access to the regulated wholesale prices in the remaining EU-27 member states. Thus the effect of transposition would be to require operators based in the United Kingdom to offer very low roaming prices to customers roaming into the EU-27, without the necessary wholesale rates being available from their continental counterparts. The transposition would also require them to offer operators from the EU-27 very low wholesale rates, that those operators would have ceased, as a result of Brexit, to be required to pass on to their customers.

Regulation (EU) 2015/2120

The EU Regulation 2015/2120 contains amendments to directives that have been transposed into United Kingdom law, primarily the Communications Act 2003 and Open Internet Access (EU Regulation) Regulations 2016 (SI 2016 No. 607).

Logically, it should be transposed by the GRA. However, this creates yet more links into EU acquis (see Table 2), that would have to be removed.

Table 2               Provisions in Regulation (EU) 2015/2120

Art. 3(4)
Any traffic management measure may entail processing of personal data only if such processing is necessary and proportionate to achieve the objectives set out in paragraph 3. Such processing shall be carried out in accordance with Directive 95/46/EC of the European Parliament and of the Council. Traffic management measures shall also comply with Directive 2002/58/EC of the European Parliament and of the Council.
Art. 8
3. National measures regarding end-users’ access to, or use of, services and applications through electronic communications networks shall respect the fundamental rights and freedoms of natural persons, including in relation to privacy and due process, as defined in Article 6 of the European Convention for the Protection of Human Rights and Fundamental
Freedoms.

Governance networks

With Brexit, the United Kingdom leaves the various European Regulatory Networks (ERNs). Consequently, there would be no purpose in bringing into British law the decisions and regulations that created the regulatory bodies, namely:

The United Kingdom would no longer be eligible to be a member of these bodies.

In theory it might negotiate continued membership or observer status, but since these bodies are intended to influence the policies of members and observers, this would seem inappropriate.

State Aid

The state aid rules exist only in Article 107(1) TFEU and in EU general measures and the specific guidelines for broadband. Consequently, if these are not transposed by the GRA they would disappear, which could have adverse effects on competition in markets and could run the risk of anti-dumping complaints.

HMG has had problems in applications of the state aid rules to telecommunications in Atlas, in delays to the BDUK rural broadband scheme, and in the loss of super-connected cities scheme. Hence, it seems likely it would wish to devise different and simpler rules.

Any new rules could be adjudicated by HM Treasury or by the relevant ministry (e.g., DCMS for broadband). A crucial question would be the nature of any appeals, whether on something like the present criteria (i.e., effects on competition) or judicial review. The former would be preferable and could be heard by the Competition Appeal Tribunal (CAT).

A green paper

Rather than randomly produce SIs from the depths of Whitehall, the result of obscure lobbying, it would be preferable for Department for Culture, Media and Sport (DCMS) to publish a Green Paper, together with impact assessments, perhaps in late 2017, with all the proposed changes. This would allow HMG to consult widely and publically, for it to be considered by the CMS Committee, in order to ensure that the changes eventually made were the best possible.

While a separate agreement on telecommunications with the EU could be envisaged, it seems unlikely to be necessary.

Appeals and reviews

Given that HMG was yesterday in the High Court defending the decision to use the Royal Prerogative to invoke Art. 50 TEU, it has to be assumed that any or all of the above is likely to be challenged in court. Judicial review of almost any action would be possible, potentially aggravated by a failure to consult on the various options or to provide an impact assessment.

As at least one DCMS Secretary of State has complained, the operators are very litigious. They are liable to take action against the government to delay or block any or all of the measures if they would be disadvantaged.

Conclusion

Given that “Brexit means Brexit” and the decision, apparently, cannot be reversed, the best has to be made of the legal complexities. It is important that the changes are as transparent as possible and that there are public consultations before anything irrevocable is done.

It should be possible for HMG to produce a green paper with possible changes in order to consult on the proposed measures. It could outline alternatives and provide impact assessments to assist parliament, industry and consumers. It would also allow overarching design for the new system to be set out.

References

The Queen on application of Dos Santos & others v. Secretary of State for Exiting the European Union, CO/3281/2016, High Court of Justice, Queen’s Bench Division, Administrative Court.


Raymond McCord Judicial Review, High Court of Northern Ireland, Queen’s Bench Division (28th September 2016).

Friday, October 7, 2016

United Kingdom – Brexit means no more European regulatory networks, no BEREC, no RSC, no RSPG, etc … splendid isolation


The vote for Brexit means the United Kingdom will cease to be a member of the European Union (EU) and, consequently, to play a role in the development of the rules applied to the single market. It will no longer to be represented in the European Parliament and Council of Ministers, while British staff will no longer work at the European Commission (EC) and Court of Justice of the European Union (CJEU).

It also means the United Kingdom will cease to participate in the EU advisory and governance committees and working groups, sometimes termed European Regulatory Networks (ERNs). It will be outside the EU multi-level governance.

Brexit means no more ERNs

In the Daily Telegraph, the ex-Treasury Mandarin, Sharon White wrote of the Office of Communications (OFCOM) that it participated in European Union regulatory committees and groups in which:

Ofcom has represented the UK’s position on these matters for many years, working closely with our European counterparts. We’ve helped shape the arguments, leading to many EU proposals that we welcome … After Brexit, we want to remain an influential player in these debates, sharing our expertise.

She seems to have missed the point of the United Kingdom returning to being a “sovereign and independent nation” and of leaving the decision making institutions of the European Union, because they constrain and interfere with the making of domestic policies and regulations.

These arrangements have been voted down and end with Brexit in early 2019. There will be neither more comitology nor multi-level governance, with the exception of domestic arrangements (e.g., Joint Ministerial Committees).

From the day of Brexit, OFCOM will cease to participate in:

These bodies are constituted by EU legal instruments derived from EU treaties, with the committees and groups advising EU institutions. They have coordinated the creation and implementation of policies within the EU and European Economic Area (EEA).

The only possible exception would have been the “Norway option”. This now seems extraordinarily unlikely, though it might have preserved participation or observer status in some groups.

Additionally, the participation and funding of the Internet Watch Foundation (IWF) from the EU Safer Internet Programme would expire with Brexit.

British participation in the European Union Agency for Network and Information Security (ENISA) would also end.

The same is true in other subject areas, notably withdrawal from:

HMG might allow OFCOM to continue to participate in ‘trade associations’ for European regulators:

Non-EU inter-governmental bodies

The United Kingdom will continue to participate in:

Given the need for regional and global coordination in the allocation of spectrum bands, the work of ITU-R and the related work of the ECC will continue to require participation from the United Kingdom.

Whether the United Kingdom should be represented in these bodies by the Department of Culture, Media and Sport (DCMS) or by OFCOM is an open question. Logically, it should be by officials accountable to ministers and thus to parliament, rather than by an independent regulatory authority, which can only represent British interests indirectly and only be accountable indirectly.

A good example to follow would be the USA, where the NTIA Office of International Affairs (OIA) holds consultations prior to inter-governmental conferences and meetings. The US Trade Representative (USTR) publishes an annual report, drawing on the experience of US-based firms, identifying failings in the implementation of trade agreements related to telecommunications. The important principles are transparency during the processes and accountability thereafter.

Conclusion

The United Kingdom will still be subject to EU influences, given it has been so closely integrated and that some operators which will continue to have continental operations. However, it can now be much more selective in its borrowings from EU policies and regulations, explicitly adapting them to British needs.

It can and should try to become a leader, developing innovative and novel approaches that might be taken up by EU member states and institutions.

It can seek to influence the rules of the Single Market, but from 2019 it must do so from the outside the single regulatory space of the EU.

References


Emilia Korjea-Aho (2016) ‘Mr Smith goes to Brussels’: Third country lobbying and the making of EU law and policy pp 1-24 in Cambridge Yearbook of European Legal Studies. Cambridge: Cambridge University Press.


David Levi-Faur (2011) Regulatory networks and regulatory agencification: towards a single European regulatory space Journal of European Public Policy 18 (6) 810-829.

Friday, September 30, 2016

United Kingdom - Telecommunications policies in Scotland, 100% broadband, Brexit and a second independence referendum

No legislative powers

The Scottish Parliament has no powers to legislate on telecommunications and Internet access, these are reserved for Westminster (see schedule 5 of the Scotland Act). At least until Brexit, Westminster mostly transposes European Union directives.

In practice the Scottish Government (and the Scottish Executive before it) has adopted policies, made public procurements and channelled state aid to operators to increase the availability of broadband in rural areas.

S.65 of the Scotland Act 2016 gave Scottish Ministers the power to nominate one of the directors of the Office of Communications (OFCOM) and to lay the OFCOM annual reports before the Scottish Parliament. Given the statutory independence of OFCOM (see Art. 1(3) of 2009/140/EC) and the harsh scrutiny of the Competition Appeal Tribunal (CAT), the effect of these measures is unlikely to be significant.

Total broadband coverage

In its manifesto for the 2016 Scottish Parliament election campaign, the Scottish National Party (SNP) promised broadband for all businesses, homes and other premises, regardless of their remoteness. This was confirmed in a statement after the SNP formed its minority administration. However, there has been neither an economic analysis nor an impact assessment, just a political assertion, for example, it is unrelated to any plans for economic growth or to key sectors (e.g., finance or food). Audit Scotland, which has examined expenditure but not policies, notes the lack of a plan to deliver 100% broadband.

The promise was surprising, firstly because it exceeds the commitments made by Her Majesty’s Government (HMG), and secondly because the Scottish Government has almost no powers to achieve its target. All the Scottish Government can do is to ask HMG and BT Openreach for more broadband and, where it can find the funds, to provide subsidies within the state aid rules. For example, it has provided £2.1 million for fifteen community projects. Consequently, it seems very unlikely that the SNP will be able to deliver on its promise and that if it does it will be more a matter of luck than of good policy execution.

HMG has been very cautious about funding universal broadband, top-slicing £500 million from the Television Licence Fee income for the current Broadband Delivery United Kingdom (BDUK) scheme to extend rural coverage, which requires ‘local bodies’ to match this, notably with European Union development monies. This is a state aid project approved by the European Commission, a requirement that will end with Brexit, as will the EU funds used by the Scottish Government to match HM Treasury spending.

BT is trialling fast broadband over longer distances at North Tolsta on the Long Isle. This could enable much cheaper provision of broadband in remote and dispersed communities.

The Digital Economy Bill, presently before Westminster, contains the potential for a future Universal Service Order that would include broadband. This is a somewhat opaque means of requiring households that are cheaper to serve to fund the provision of broadband to more remote households, a scheme likely to be managed by BT (see responses to OFCOM consultation). Since this would be a United Kingdom measure, and since Scotland has a markedly lower population density, it implies a transfer of funds from English to Scottish consumers.

Brexit

The surprise vote in favour of Brexit was taken as a casus belli by the SNP to argue for a second independence plebiscite, though this may not happen very soon. Indeed, the prospect of a ‘hard’ Brexit creates significant challenges in terms of the border with England, either requiring customs checks or passport controls, and conceivably both, if Scotland was in the Schengen Area and the European Customs Union (EUCU) and England was not.

Consequently, there are a number of scenarios in which Scotland might, at different times, be in either or both the United Kingdom or the European Union, perhaps neither. It is likely to have to leave the EU along with the UK and then apply for membership under Article 49 TEU.

Independence, whether or not in the EU, requires splitting of the UK telecommunication markets and networks. It would be especially challenging to split Openreach, both the Agreement and the BT local access network that supplies retail Internet service providers.  The consequential uncertainties can only reduce investment in networks. Moreover, faced with uncertainties and having to set up new network operations centres, lobbying groups, and regulatory compliance units, firms might prefer to spin off their operations in Scotland, for example, to hedge funds or to groups based in Scotland.

Independence would require a new legal framework, presumably by replicating the UK Communications Act 2003. However, this is complicated by Brexit, which necessitates considerable changes to the Act and the related statutory instruments, notably to remove obsolete references to the European Commission and the single market. Membership of the EU would require compliance with its acquis, including the telecommunications directives and creation of the associated institutions. The result could be a sequence of complex legal and regulatory changes, generating considerable uncertainty, not helped by the preference of the operators to test laws and rules in court.

Independence would require Scotland to create a ministry with policies for telecommunications and a host of new bodies, to replicate the functions of, inter alia, the following:
  • ·         Competition and Markets Authority (CMA);
  • ·         Competition Appeal Tribunal (CAT);
  • ·         Gambling Commission;
  • ·         Interception of Communications Commissioner's Office (IOCCO);
  • ·         Internet Watch Foundation (IWF);
  • ·         Investigatory Powers Tribunal (IPT);
  • ·         Office of Communications (OFCOM);
  • ·         Office of the Telecommunications Adjudicator (OTA2);
  • ·         Ombudsman Services.

This represents an enormous workload for new ministries in preparing policies and drafting legislation, for new regulators in drafting, consulting on, and re-issuing licences, and for the Scottish Parliament in creating additional committees to scrutinise legislation, then to oversee the new ministries and agencies.

References

Ewan Sutherland (2016) “Broadband and telecommunications markets—policy, regulation and oversight” Parliamentary Affairs 69 (2) 387-408.


Friday, September 23, 2016

Brexit for telecommunications markets – where we stand three months after the vote

It is now three months since the shocking United Kingdom vote for Brexit, during which time there has been the appointment of a new prime minister and cabinet, with three leading Brexiteers in cabinet positions charged with the negotiations. Aside from the “Brexit means Brexit” tautology, little formal progress has been made. The invocation of Article 50 TEU is strongly hinted for early 2017, with the prospective use of the Royal Prerogative presently being judicially reviewed. There remains the distinct possibility of a ‘hard Brexit’, closer to the Albanian than the Norwegian option, meaning only access to the single market with tight migration controls.

Attention to telecommunications came, rather briefly, this week, when the European Commission adopted revised guidelines on international mobile roaming. The question arose of whether, post-Brexit, UK-based customers would be able to roam continental Europe without paying surcharges. Given that UK-based operators would no longer have access to the regulated wholesale prices, then the logical answer must be that customers will revert to paying roaming charges, unless the operators can negotiate deals with their continental counterparts that they have failed to do for the last quarter century. Business users will be able to buy subscriptions in the remaining EU27, while consumers will have to rely on Wi-Fi, which Jean-Claude Juncker has promised to expand to all towns in the EU27, in competition with 4G networks.

British influence is already diminishing, notably in the recent Bratislava Summit of the EU27 leaders. The effect on the European Commission, European Parliament and European Council will change policies, directives and regulations, including pending proposals for the Digital Single Market. After Brexit, Her Majesty’s Government (HMG) will be reduced to lobbying the EU institutions in the hope of them changing the single market rules. For example, this could mean higher levels of mandatory European content in the revisions to the Audio-Visual Media Services Directive (AVMS), while British content might cease to be ‘European’.

The state aid rules exist only in EU treaties and EC rules, thus upon Brexit HMG will be free to spend money on rural broadband and mobile coverage as it wishes. How much might be available to spend and how it might allocate such funds is presently impossible to say. In the absence of the rules, any operator feeling aggrieved or disadvantaged by funds given to a rival would be reduced to judicial review, the outcome of which is very hard to predict. Doubtless, it would end up in the Supreme Court, subject to interim relief to suspend funding until finally decided. Existing state aid for rural broadband relies on EU funds, which local authorities match with the funds from HM Treasury, clearly this will be lost.

Brexit would take the United Kingdom out of the various EU directives and, especially, regulations. A review of all the statutes and statutory instruments that transpose the EU acquis would be necessary, in order to identify provisions that would no longer be relevant or necessary, such as references to the single market or the involvement of the EC in decision making. An obvious question is who would replace the EC in drawing up the list of markets to be analysed by OFCOM?

Lord Lawson has called for a completion of the Thatcher Revolution, with the sweeping away of many of the EU rules, though others have been more cautious. Given the expectations of economic growth and of the increased exercise of sovereignty, HMG might undertake wider legal reforms, which would open the way to lobbying by vested interests, primarily the large operators. In the absence of alternative proposals, the risk is of ministers succumbing to promises of better outcomes if regulatory burdens devised by the EU were to be judiciously raised or swept away. There is very little capacity in non-governmental bodies or in universities to analyse such proposals and the few discussions presently underway are exclusively in London and already dominated by vested interests.

One concern across the ICT sector is the prospective loss of access to the EU-wide pool of highly skilled labour needed in new ventures, in operators and in OFCOM. Loss of easy access to skilled labour could present significant problems, not least since it would take considerable time to train alternatives from the domestic labour pool.

The Brexit debate points to significant failings by the EC in the completion of the single market. It does not presents serious challenges for telecommunications, there being relatively few pan-European services that would be disrupted. The single markets for the various service sectors all look remarkably different.

The Department of Culture, Media and Sport needs to produce a green paper on telecommunications policy as quickly as practicable, with the parliamentary Culture, Media and Sport Committee conducting an inquiry that draws on a very wide range of inputs, much more than the ‘usual suspects’. The OECD should be invited to undertake a peer review of the regulatory system.

References 

Ewan Sutherland A short note on Brexit: Telecommunications issues after the Referendum. (30 June 2016).

Ewan Sutherland A short note on telecommunications issues related to Brexit. (18 April 2016).

The Queen on the application of Santos v Chancellor for the Duchy Lancaster, CO/3281/2016, High Court of Justice, Queen’s Bench Division, Administrative Court (19th July 2016), before Sir Brian Leveson PQBD and Mr Justice Cranston.