Insights Communications & Competition Newsletter – December 2022

Welcome to the seventh edition of our Communications & Competition newsletter – a place where we collate the most interesting developments for the communications sector and latest key competition law developments. If you’ve been forwarded this newsletter by a colleague and would like to subscribe, please click here.

If you would like to discuss and/or need help with any of the developments covered in this newsletter and/or on communications and competition law matters more generally, please don’t hesitate to get in touch with our team.

As we head towards the end of the year, several key communications developments have recently been published, including the UK’s net neutrality review, new rules to tackle fake numbers and new spectrum licences are to be made available early in 2023 for essential drone safety and communications equipment. Ofcom has also published its proposed work plan for 2023/24 and welcomes comments by 8 Feb 2023. At a European level, the Digital Services has been adopted and BEREC is consulting on its work programme ahead – so a busy communications and digital services agenda looks like its ahead in 2023.

We are also delighted to announce that Simon Smith recently joined us from Telstra, where he was the Head of Regulatory for Asia, further strengthening our global telecoms regulatory capability.

As this will be our last edition of 2022, we would like to wish our readers a great Christmas break and best wishes for 2023.

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Council of the European Union adopts Digital Services Act

The Council of the European Union formally adopted the Digital Services Act (DSA) on 4 October 2022. The Act imposes obligations on providers of various online intermediary services to ensure a safer and more open digital space for users, with increased accountability depending on the provider’s size and the risks posed by their activities. Most of its provisions will apply to online intermediary service providers 15 months after the entry into force, so full implementation expected by 2024. Read more

No national legislation required for compensation on interception under EECC according to the Advocate General

Following an action by ECS providers claiming that full costs were not recovered after enabling interception of communications ordered by the Italian authorities, the local courts asked the CJEU to clarify whether local authorities should have a clear role in determining remuneration to operators for the mandatory interception of communications. Advocate General Collins gave his opinion that the EECC does not require national legislation for full compensation to be provided to electronic communications service providers for such costs. Further, Member states may operate an appropriate mechanism to compensate for such costs. Read more 

Council of European Union adopts Common Charger Directive

The Council has given its final approval to the Common Charger Directive, meaning that in 2024 a USB-C charging port will become mandatory for a whole range of electronic devices, such as mobile phones, tablets, and headphones. Consumers will no longer have to buy different chargers for new models of phones or devices. Read more

ECJ Ruling on Universal Service

On 10 November 2022, the ECJ gave a preliminary ruling on the interpretation of provisions of the Universal Service Directive (Directive 2002/22) on whether the net costs of the provision of the telecoms universal service impose an unfair burden on the designated universal service provider.
The ECJ concluded that by taking account of the situation of a USP relative to that of its competitors, it is possible for the NRA to determine whether the net cost of its USOs constitutes, by reason of the resulting distortions of competition in the relevant market to the detriment of that provider, an unfair burden on the USP, within the meaning of Articles 12 and 13 of the Universal Service Directive. Read more

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Ofcom statement on Openreach fibre build

Ofcom has published a statement in relation to its assessment of the concerns raised regarding Openreach’s fibre build and the risk of Openreach strategically targeting areas where competing alt networks have built or plan to build in order to prevent network competitors’ roll-out in wider areas.
Ofcom stated that it has not seen evidence to suggest Openreach has rolled out its fibre network to target or harm competitors, or that these build decisions were not commercially rational in any way.

See here for the open letter published.

Openreach has notified Ofcom of their “Equinox II” Offer

Openreach have notified Ofcom of a new “Equinox II” pricing arrangement that it intends to put in place from 1 April 2023. Ofcom is considering whether the offer raises competition concerns requiring ex ante intervention. They plan to consult on the offer in late January/early Feb 2023 and give stakeholders an opportunity to express their views.

According to press reports, Openreach has indicated that the new long-term pricing included speed tiers, with incentives to encourage the take-up of faster services and that the offer also has a “failsafe mechanism”, which removes the theoretical possibility that Equinox 2 would stop an ISP choosing to use an altnet in a specific area. To find out more, please click here.

Ofcom proposes new net neutrality guidance

On 21 October, Ofcom proposed to revise guidance on how net neutrality rules should be applied in the UK. Ofcom’s role is to monitor and ensure compliance with the rules and provide guidance on how broadband and mobile providers follow them. It is proposing to review its guidance to ensure that net neutrality continues to support innovation, investment and growth, through innovative services and increased choice. Read more

Ofcom clears new commercial drone services from start of 2023

Ofcom has confirmed that companies will be able to apply for a new type of spectrum licence from 20 January 2023. Ofcom plan to issue new spectrum licences for essential drone safety and communications equipment. This will allow companies to use mobile and satellite networks to enable their drone fleets to operate a wider range of services and over longer distances. To find out more, click here

Government response to consultation on revised Interception of Communications code of practice

Following a consultation to revise the code of practice on the Interception of Communications, the Home Office has published its response reflecting the government’s position with regards to serving warrants on cloud-service providers or enterprise customers and the circumstances under which this should be permitted. The revised code of practice will be laid before Parliament and if adopted will come into force later this year. Read more

Ofcom consults on incident reporting under NIS Guidance

The Network and Information Systems (NIS) Guidance sets out the manner in which Operators of Essential Services (OES) should fulfil their duty of ensuring security of their network and information systems. Ofcom is consulting on proposed changes to the NIS guidance for OES. The consultation is open until 13 January 2023 and the revised guidance is expected to be published by Spring 2023. To find out more, click here

New rules from Ofcom on use of CLI

Ofcom has published new rules for telecoms providers to help improve the accuracy of calling line identification (CLI) data with a view to disrupting scammers who “spoof” the identity of a caller to mislead the call recipient.

Ofcom will modify General Condition (GC) C6 to require providers, where technically feasible, to identify and block calls with CLI data that is invalid, does not uniquely identify the caller, or does not contain a number that is dialable. Read more

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Movement on the Digital Markets, Competition and Consumer Bill

The government announced in its Autumn Statement 2022 that it’s bringing forward the Digital Markets, Competition and Consumer Bill in the third Parliamentary session. Movement on this Bill is therefore expected to happen in early 2023.

The Bill will be focused on competition, consumer rights and digital markets and will give the CMA new powers to deal with anti-competitive practices in digital markets. The proposed legislation will afford new statutory powers to the CMA and provide the Digital Markets Unit (DMU) that sits within it with the statutory footing it requires to regulate the market.

The proposal came about in response to evidence showing that “a lack of competition is degrading the quality of people’s experiences online, putting at risk the viability of companies dependent on dominant firms and holding back innovation across the digital economy”.

While the exact definition of the “digital activities” in scope has yet to be fully defined, the regime will apply the label of having Strategic Market Status (SMS) to a small number of the most powerful and entrenched firms that fit the respective criteria (with an expectation this will cover the likes of Apple, Amazon, Meta and Google). Those firms deemed to have SMS will be subject to a bespoke and binding code of conduct. Importantly, the code will include a category which will prevent a firm from leveraging other parts of the business to further entrench its power in a designated activity.

See here for the statement

Ofcom fines Sepura £1.5 million for breaching competition law

Ofcom has also recently fined Sepura £1.5m for a breach of competition law. Their investigation concerned an exchange of commercially sensitive information by Sepura (between senior employees by text message) with their competitor Motorola about pricing intentions during a procurement process. To find out more, click here

Opinion issued on the Commission’s appeal against the General Court’s ruling in CK Telecoms UK Investments v Commission

Advocate General Kokott has issued her opinion in respect of an appeal brought by the Commission against the General Court’s judgment in CK Telecoms UK Investments v Commission, in which the court upheld an action for annulment of the Commission’s 2016 decision to prohibit the proposed acquisition by Hutchinson 3G UK Investments Limited (Three) of Telefonica plc (O2). Advocate General Kokott suggests that the Court of Justice should set aside the General Court’s judgment. To find out more, click here

Viasat’s merger with Inmarsat referred for a Phase 2 investigation

The merger between Viasat and Inmarsat has officially been referred for a phase 2 investigation by the CMA. To find out more, click here

CMA proposing price controls to address overcharging for emergency service radio network provided by Motorola

The CMA has proposed price controls on the Motorola owned Airwave Network, which has a monopoly over the provision of the separate mobile network that enables emergency services to communicate securely. A provisional assessment carried out by the CMA fond that due to the lack of competion, Motorola makes around £160 million in excess profits per year. The CMA believes the price controls will help to ensure lower costs for taxpayers to run the service. It is now inviting comments on its provisional findings. To find out more, click here

New UK focused block exemptions

The government has laid before Parliament both the Competition Act 1998 (Specialisation Agreements Block Exemption) Order 2022 (SABEO) and the the Competition Act 1998 (Research & Development Agreements Block Exemption) Order 2022 (R&D BEO). These orders are being used to implement the CMA’s recommendation that the retained EU Horizontal Block Exemption Regulations should be replaced with bespoke UK focused orders. While they remain largely the same, there are some changes relating to scope of coverage and threshold tests. See here and here for the Orders (downloads PDF).

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Secretary of State for Digital, Culture, Media and Sport confirms return of Online Safety Bill to Parliament

Speaking at the recent Conservative Party Conference, Michelle Donelan, the new DCMS Secretary of State, confirmed that the Online Safety Bill “will be returning to Parliament” and that she and her team are “working flat out to ensure the bill is delivered” and “strengthening the protections in place for children”. Read more

Ofcom reviews first year of video-sharing platform regulation

The report released by Ofcom covers its key findings since it was appointed as the statutory regulator for platforms. The report covers VSPs falling under Ofcom’s remit, as well as a number of adults VSPs. Ofcom reported that it found that VSPs are not prioritising risk assessment processes, which it believes are fundamental to proactively identifying and mitigating risks to user safety, and will be mandatory under the Online Safety Bill. To find out more, click here

Voluntary Code of Practice for app store operators, platforms and developers

Following a consultation, the Department for Digital, Culture, Media & Sport (DCMS) has published a voluntary Code of Practice for app store operators, app developers and platform developers to help protect users. Read more

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Regulations made implementing Telecommunications Infrastructure (Leasehold Property) Act 2021

Following the publication of the Telecommunications Infrastructure (Leasehold Property) Act 2021, the Telecommunications Infrastructure (Leasehold Property) (Conditions and Time Limits) Regulations 2022 (SI 2022/1057) have been published and will enter into force 26 December 2022. Read more

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European Electronics Communication Code (EECC) Tracker

For the latest update on the varied implementation of EECC we are observing across the UK and in the EU/EEA, please find attached our latest European Electronic Communications Code tracker – which provides an at-a-glance view of implementation as well as a detailed summary of the current status for each territory.

To find out more on any of the above updates or other communications provider requirements please get in touch.

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