Sector Overview

The availability of telecoms infrastructure underpins much of the economic and social activity in the UK and is considered by many to be of great importance (e.g. a broadband connection is now considered essential by most people)

Electronic communications (telecoms) networks and services include fixed and wireless based communications such as broadband, voice and data services. Fixedbased telecoms include broadband and telephony provided over a landline, whereas wireless connections usually refer to mobile phone and mobile broadband services, but also includes fixed wireless services and some satellite communications services.

As technology converges there is increasing overlap with other sectors, such as the broadcasting sector, and the digital tech sector. For example, several of the large telecoms firms provide content services alongside electronic communications services and/or networks, often to consumers as bundles of services.

The sector is highly regulated at the EU level through the Electronic Communications Framework (which is currently being recast as the European Electronic Communications Code (EECC). It seeks to strengthen competition in the sector, stimulate investment, drive innovation and foster freedom of choice for consumers. In particular, under these EU rules, National Regulatory Authorities (NRAs) – Ofcom, in the UK – are required to analyse specified markets in order to identify market failure or dominance (or SMP – Significant Market Power) and adopt remedies in order to ensure effective competition. The markets subject to scrutiny under the EU rules include: the business connectivity market; residential and business narrowband and broadband access; and fixed telephony and the mobile phone call termination market. Market reviews are currently conducted every three years.

The current EU regulatory regime

Key sector-specific legislation on telecoms

Electronic Communications Framework

Electronic communications services and networks are currently regulated in the UK by a European framework consisting of five directives and two regulations, known as the “Electronic Communications Framework” or “Common Regulatory Framework” adopted in 2002 and revised in 2009. It was implemented in the UK via the Communications Act 2003, and revised in 2011. The Framework aims to improve the functioning of the telecoms market across the EU, guarantees basic user rights and defines the powers, duties and independence of national regulators. A key principle is to promote competition in the electronic communications sector as a driver of private sector investment, and choice for consumers of high quality, innovative, affordable services. The competition aims are balanced with a range of consumer protection objectives.

The individual instruments are as follows:
– The Framework Directive (2002/21/EC) seeks to establish a harmonised framework for regulation of electronic communications networks and services and lays down the objectives of national regulators such as Ofcom. This Directive also sets out the framework for assessing significant market power (SMP) in telecoms markets. The UK regulation of security and resilience of the telecommunications market derives from this directive. The relevant clauses in the EU Directive were transposed into UK Law in the Communications Act 2003, and were updated in 2011 following the revision of the Directive in 2009’;
– The Access Directive (2002/19/EC) (amended in 2009) harmonises regulationof access to, and interconnection of, electronic communications networks andassociated facilities and to promote competition, interoperability and consumer benefits. This Directive empowers regulators to impose access and interconnection obligations, and under certain circumstances, to impose as a last resort remedy, the functional separation of a vertically integrated operator. It also sets out the conditions or access to digital television andradio service broadcast;
– The Authorisation Directive (2002/20/EC) (amended in 2009) is designed to facilitate cross-border market entry to further stimulate competition in the EU market. It introduced a general authorisation system for all electronic communications networks or services by removing the need for individual licences to be delivered by national regulators;
– The Universal Service Directive (2002/22/EC) (amended in 2009) strengthens consumer protection. It sets out users’ rights relating to the availability, affordability and accessibility of electronic communications networks and services. The directive allows member states to introduce a Universal Service Obligation (USO), which gives people the right to make a reasonable request for an affordable telephone and functional internet service from a designated provider. The Directive also requires provision of directory enquiries services, and phone directories, and the discretion for the regulator to require the provision of phone boxes;
– the E-Privacy Directive (2002/58/EC) aims to protect the individual’s privacy and regulate the processing of personal data in the electronic communications sector. As such this directive complemented the Data Protection Directive 95/46/EC (the revised General Data Protection Regulation, Regulation (EU) 2016/679, was adopted on 24th May 2016 andwill enter into force 25 May 2018).

The ePrivacy Directive specifies how some of the principles of Directive 95/46/EC apply to the electronic communications sector. Key areas it addresses include consent, cookies, unsolicited marketing and security breaches. EU negotiations on the proposals reforming the ePrivacy Directive into a Regulation are ongoing; and

– The Body of European Regulators for Electronic Communications (BEREC) was established by Regulation (1211/2009). BEREC is composed of regulators from each of the EU Member States as well as observers from other countries. BEREC assists the European Commission and the national regulatory authorities (NRAs) in implementing the EU regulatory framework for electronic communications. As such it produces Recommendations, Guidelines and Opinions. It also serves as a platform for the exchange of best regulatory practice.

In addition to the above legislation, the European Commission issued a number of telecoms-specific Recommendations designed to assist Regulators in the implementation of the Framework. BEREC has also issued several non-binding Guidelines of interpretation of legislation that national regulators have to take account of when formulating their decisions.

The Framework is reviewed every seven years approximately, and is currently being recast (with the exception of the E-Privacy and Roaming rules) as the European Electronic Communications Code (EECC).

Mobile roaming

There is currently surcharge-free mobile roaming across the EU and European Economic Area (EEA). This arrangement, based on the EU Roaming Regulations, is called “Roam Like at Home” (RLAH). It came into effect in June 2017. 46. RLAH works by the EU imposing caps on what mobile operators can charge other mobile operators – so-called ‘wholesale rates’. The relevant Regulations are listed below. EU-imposed caps on wholesale rates have been introduced over the last ten years via these Regulations. This means that retail roaming rates in the EU/EEA have also gradually been reducing. RLAH is the conclusion of this process (for consumers) that led to the abolition of surcharges for roaming within the EEA.

RLAH benefits all consumers who use a UK mobile phone in the EU/EEA and all consumers who use an EU/EEA phone in the UK. In addition, RLAH benefits all consumers who live in a border region such as Northern Ireland/Ireland and Spain/Gibraltar.

The UK cannot act unilaterally to set roaming rates, as it cannot set wholesale rates on non-UK operators. The following Regulations set the framework for the EU setting wholesale and retail rates in the EU/EEA. The Regulations represent the downward glide-path of EU wholesale rates, with the 2017 Regulation mandating retail-level surcharge-free roaming across the EU/EEA:
– Regulation 717/2007 on roaming on public mobile telephone networks within th Community and amending Directive 2002/21/EC [i.e. the Framework Directive] (revoked by 531/2012 below),
– Regulation 531/2012 on roaming on public mobile communication networks within the Union (recast), amended by: – Regulation (EU) 2015/2120 laying down measures concerning open internet access and amending Directive 2002/22/EC on universal service and users’ rights relating to electronic communications networks and services and Regulation (EU) No 531/2012 on roaming on public mobile communications networks within the Union (also known as the Telecoms Single Market (TSM) Regulation and the Connected Continent package) – Regulation 2017/920 amending Regulation 531/2012 on roaming on public mobile communication networks within the Union
– Implementing Regulation (EU) No 1203/2012 [roaming]
– Implementing Regulation (EU) 2016/2286 [roaming]
– Implementing Regulation (EU) 2016/2292 [roaming]

Open Internet Access Regulation (“net neutrality”)

EU Regulation 2015/2120, which came into effect on 30 April 2016, lays down provisions concerning open internet access (“net neutrality”). BEREC adopted Guidelines of interpretation in August 2016. The EU Open Internet rules were implemented in the UK via the Open internet Access Regulations 2016.

The EU rules give end-users the right to access and distribute information, content, applications and services of their choice, and prevents providers of internet access services to the public from blocking specific content or traffic on their networks anticompetitively. Reasonable traffic management is permitted (e.g. to deal with temporary network congestion); however, blocking or reducing traffic is permitted only in specific circumstances.

The UK has a competitive market for internet access services, with a self-regulatory Code of Practice for the Open Internet50 (reviewed in 2016 to bring it in line with the provisions of the EU Regulation). This has meant that “net neutrality” is not generally an issue in the UK51. All major providers of internet access services are signatories to the Code of Practice. Whilst the self-regulatory approach has worked well in the UK, the new EU rules have provided an additional legal backstop, providing Ofcom with responsibilities for the enforcement of the rules.

Broadband Cost Reduction Directive

The Broadband Cost Reduction Directive (2014/61/EU) was recently transposed (SI 2016/700) and requires telecoms operators and companies in a range of utility and transport sectors to share physical infrastructure (ducts, poles, and other ‘passive’ elements) at fair prices in order to roll out broadband networks. The Directive also requires sharing of information about such infrastructure, and encourages codeployment when carrying out civil engineering works. Ofcom is responsible for resolving disputes between companies in the UK, with appeal to the courts.

Other relevant sector-specific EU legislation

A number of technical matters are dealt with by EU legislation. Of particular concern to telecoms and ICT providers are the following:
– Radio Equipment Directive (RED) – 2014/53/EU – came into force in June 2016. It covers the performance of radio receiving and transmitting equipment to ensure that they operate effectively and do not interfere with other equipment. It replaces the Radio and Telecommunications Terminal Equipment (RTTE) Directive. There are significant differences to RTTE in that it narrows the scope to radio products, but it embraces a wider range of radio products than before;
– Electromagnetic Compatibility Directive (EMCD) – 2014/30/EU – describes how equipment, devices or systems will not interfere with or prevent each other’s correct operation through spurious emission and absorption of electromagnetic interference (ie radio waves). The current EMCD came into force in April 2016. It is broadly the same as its predecessor but streamlines and simplifies a number of issues; and
– European Standardisation Regulation – 2012/1025 – this describes how the EU works with standardisation and describes a legal hierarchy of standards and how they relate to each other.

Cross-sectoral rules, technical requirements and frameworks

The allocation of public funding to extend broadband coverage in areas where there are insufficient economic incentives for commercial operators to invest, is currently subject to EU State Aid rules. The BDUK funding programme, as described above, to roll-out superfast broadband is required to comply with those rules. The EU issued Guidelines specific to state aid for the deployment of broadband networks.

EU competition rules have implications for the sector. The most significant recent example being the European Commission’s rejection of a bid by the mobile operator Three to take over competitor O2 under the EU Merger Regulation in May 2016, on the basis of strong concerns – shared by OFCOM and the CMA – that UK mobile customers would have had less choice and higher prices as a result of the takeover,and that the deal would have harmed innovation in the mobile sector.53

EU rules on horizontal consumer protection are also relevant. Horizontal consumer law aims to create growth by empowering and protecting consumers so they are able to make informed decisions when purchasing goods and services and actively participate in markets. Clear rules and enforcement underpin this. There are cross-sectoral protections for consumers of electronic communications services. For example, consumers are entitled to a 14 day cooling off period, they are protected by regulations set in relation to distance contracts, and are protected from unfair commercial practices and unfair contract terms originating from European consumer law.

The following wider legislation will also have impact on this area given that they apply to telecoms and electronic equipment needed by the sector to operate:
– Registration, Evaluation, Authorisation and Restriction of Chemicals (REACH) – EU Regulation 1907/2006) – concerning chemicals and their safe use;
– Restriction of the Use of Certain Hazardous Substances (RoHS) in Electrical and Electronic Equipment (EEE) – Directive 2011/65/EU – controlling the amount and use of hazardous substances;
– Waste Electrical & Electronic Equipment (WEEE) – Directive 2012/19/EU -covering good use of materials and the disposal of electrical and electronic
waste; and
– Low Voltage Directive (LVD) – 2006/95/EC – specifies safety requirements for equipment connected to the electrical supply for mains and similar voltages. International obligations and standards

Domestic telecoms legislation is a mixture of law deriving from EU Directives, directly-applicable EU Regulations and Decisions, and law created in the UK.

Standards are generally global, although there are standards that are uniquely European or UK. The production of standards and their relationship with the market is described further below. Some standards are cited directly by legislation as ways in which products and services may comply with aspects of that legislation.

There are several international telecommunications inter-governmental organisations:

The International Telecommunication Union (ITU) is treaty-based (i.e. established through a multilateral treaty signed by its members with the ntergovernmental organisation), and the largest and most notable international telecoms organisation. The ITU is the United Nations specialised agency for information and communication technologies (ICTs). Its membership includes 193 Member States (including the UK) and around 700 public and private sector companies, as well as international and regional telecommunication entities. Its HQ is in Geneva. The ITU is both a intergovernmental and a sectoral organisation that allocates global radio spectrum and satellite orbits, develops the technical standards that ensure networks and technologies seamlessly interconnect, and strives to improve access to ICTs to underserved communities worldwide.

The European Communications Office (ECO), which includes greater Europe, including Russia and other non-EU countries, has its HQ in Copenhagen and is the permanent office supporting the CEPT (European Conference of Postal and Telecommunications Administrations). It is a treaty-based organisation established through a multilateral treaty signed by its member states. This in turn comprises its Presidency and its three Committees: the Electronic Communications Committee (ECC), the Committee for ITU Policy (Com-ITU) and the Committee for Postal Regulation (CERP). CEPT brings together the postal and telecommunicationsregulatory authorities of 48 European countries. CEPT’s activities include cooperation on commercial, operational, regulatory and technical standardisation issues. CEPT plays a key role in coordinating the pan European position in preparation for the World Radiocommunication Conference. CEPT provides technical recommendations to ETSI, when it is necessary to produce standards.

The Commonwealth Telecommunications Organisation (CTO) is an international organisation subject to a Headquarters Agreement with the UK Government, and with its offices located in London. Its mission is to support the development and use of ICTs within the Commonwealth and beyond; promote the provision and use of ICTs to meet the needs of members, to support development in Member countries, and to ensure the inclusion of marginalised people; to promote effective cooperation and partnership amongst its members and other organisations.

The UK takes a leading part in the Organisation for Economic Co-operation and Development (OECD) Committee on Digital Economy Policies (CDEP) on various ICT issues, reports and initiatives. Besides participation by all 35 OECD Members States there are contributions by high-level representatives from nonmember governments, business, civil society and the Internet technical community.

The International Telecommunications Satellite Organization (ITSO) is a Treatybased intergovernmental organisation which establishes that communication by means of satellites be available to the nations of the world as soon as practicable on a global and non-discriminatory basis. It also incorporates the principle embedded in the “Outer Space Treaty,” which states that outer space shall be used for the benefit and in the interest of all countries. ITSO is a treaty-based organisation established through a multilateral treaty signed by its member states.

The International Mobile Satellite Organization (IMSO) is the Treaty-based intergovernmental organisation (comprised of 102 Member States) whose primary purpose is the oversight of certain public satellite safety and security communication services provided by mobile satellite communication systems.

The Eutelsat intergovernmental organisation (IGO) was originally set up in 1977 to develop and operate a satellite-based telecommunications infrastructure for Europe. In 1982 Eutelsat started Sky satellite broadcasts. Its satellites are now used for broadcasting some 6,000 television stations across Europe, Africa and Asia. After privatisation of the satellite service provider (to become Eutelsat SA) Eutelsat IGO is now a Treaty-based intergovernmental organisation based in Paris comprising 49 Member States from across ‘greater Europe’.


The main forum for international decisions about spectrum allocation (i.e. what radio frequencies can be used by what type of services under what conditions) is the World Radiocommunication Conference (WRC), run by the ITU. It is held every three to four years to revise the Radio Regulations, the international treaty governing the use of spectrum. The CEPT, of which the UK is a member of, plays a key role in coordinating the pan European position in preparation for the World Radiocommunication Conference.

The EU’s Radio Spectrum Policy aims at coordinating the approach to radio spectrum management across the EU. Whilst the European Commission does not manage radio spectrum directly, it’s role is to ensure that the use and management of radio spectrum in the EU takes account of all relevant EU policies. Spectrum allocation and management (i.e. decisions on what entity is allowed to use a particular band for a particular service) are actually administered by national authorities on the basis of the WRC Radio Regulations. EEA and non-EEA states tend to follow EU harmonisations for economic reasons (such as economies of scale for consumers, interoperability of consumer devices). Assigning spectrum bands differently from regulators in neighbouring countries can result in radio signal interference, requiring careful cross-border management by regulators.

Standards production

Standards underpin a range of issues such as trade, interoperability, security, quality, performance, innovation and market access. According to the Centre for Economics and Business Research (CEBR) ‘standards have been hugely influential in boosting the sales of UK products and services abroad, with reported impacts averaging 3.2% of annual exports, equivalent to £6.1 billion per year in additional exports. ICT technical standards are agreements between predominantly industry partners to create products and services that work in a defined way. They are created in a standards body that is usually industry-lead, and thus industry is very influential.

A lot of the bodies in the ICT area are industry only and the main involvement of governments is thus about the regulatory environment in which they work. Some of the bodies are so-called “formal” standards bodies, meaning that there is some legal recognition of them by governments, often through mention in regulation.

There are three European standards organisations (ESOs) recognised by the EU: the European Telecommunications Standards Institute (ETSI), the European Committee for Standardization (CEN) and the European Committee for Electrotechnical Standardization (CENELEC). The UK is a member of both CEN and CENELEC in its own right.

Product and service regulation

Standards may be referenced by regulation directly. There is also a hierarchy of standards that is set largely through European legislation. This supports specific needs such as security and safety, as well as supporting products and services that work in all EU countries in a similar manner and facilitate the Single Market. The ESOs have a special status, working with national bodies such as British Standards Institute in the UK. In particular they have the ability to produce standards called ENs (European Standards) which are approved by the European Commission and in many cases EFTA as well.

Existing frameworks for how trade is facilitated betweencountries in this sector

The arrangements described in this section are examples of existing arrangements between countries. They should not be taken to represent the options being considered by the Government for the future economic relationship between the UK and the EU. The Government has been clear that it is seeking pragmatic and innovative solutions to issues related to the future deep and special partnership that we want with the European Union. There are a number of existing arrangements which govern the way in which non-EU Member States trade with the EU in this sector.

Telecommunications is an example of a liberalised, yet highly regulated sector. NonEU based telecoms companies operate in UK and EU markets without discrimination compared to domestic and EU companies as a result of commitments made under the WTO General Agreement on Trade in Services (GATS).

GATS includes an Annex on Telecommunications,and a Protocol on Basic Telecommunications.This sets out the international rules for a highly liberalised market in telecoms services. Post-GATS, WTO members negotiated on basic telecommunications services which are set out in the Fourth Protocol to the GATS which include additional commitments made by a subset of WTO Members.

These rules apply to 108 of the WTO’s 159 Member States and include the EU / UK. The GATS rules provide the rules for cross-border trade in telecoms services, which the UK currently adheres to as a member of the EU.

Paragraph 5(a) of the GATS telecoms annex states that each Member shall ensure that any service supplier of any other Member is accorded access to and use of public telecoms networks and services, on reasonable and non-discriminatory terms.

The EU Framework (EU Access Directive) is based on the same principles of liberalised and competitive markets as GATS. GATS does not require regulatory harmonisation but seeks to ensure liberalised access by any company that offers telecommunications services within any member (for example providing access to an incumbent’s infrastructure).

Telecoms chapters of trade agreements go beyond the provisions in GATS to deliver further incremental liberalisation in the sector. For example, the EU-Canada Comprehensive Economic and Trade Agreement (CETA) improves access, while guaranteeing regulatory transparency and safeguarding against anti-competitive practices, while also including a requirement for suppliers to have access to domestic dispute resolution procedures.

The majority of EU agreements with third countries include a telecoms section. For example, these range from the Moldova-style Association Agreements60 that are aimed at approximating the telecoms laws of Moldova to those of the EU acquis; to CETA that have a dedicated telecoms chapter but do not require fully harmonised law, through to agreements the EU has with countries like Algeria that call for a dialogue on telecommunications policies.

In addition, the EU – Moldova / Ukraine / Georgia Association Agreements establish Deep and Comprehensive Free Trade Agreements (DCFTAs), which allow third country access to EU markets and grant EU investors the same regulatory environment in the associated country as in the EU. The agreements refers to, among other things, the powers, impartiality and independence of NRAs; access to markets, networks and other elements; authorisation, registration and licensing; competition and significant market power; and interconnection and universal service obligations.

Devolution and overseas territories

Telecoms regulation is a reserved matter and implementation of the EU Electronic Communications Framework is undertaken at the UK level.

Gibraltar is in the EU, having joined the EEC as part of the UK’s 1973 accession.Following the Lisbon Treaty, Article 355 (3) of the TFEU applies to ‘the European territories for whose external relations a Member State is responsible’. As such the EU Electronic Communications Framework currently extends to Gibraltar and the UK has addressed EU Pilot cases linked to potential breaches of the Framework in Gibraltar.

UK Overseas Territories and Crown Dependencies must be represented by the UK at ITU, OECD, CTO, ECO, ITSO, IMSO and Eutelsat IGO forums. The Overseas Territories cannot officially represent themselves or be represented by any country other than the UK in these forums.

Except for Gibraltar, the EU’s roaming regulations do not apply to the Overseas Territories and Crown Dependencies. The current roaming rules allow Gibraltar consumers to use Spanish mobile phone networks surcharge-free. The roaming regulations have also removed the previous problem of accidental roaming across the Gibraltar / Spain border.

Telecoms is a reserved matter and therefore not devolved. However, mobile roaming is of particular importance to consumers in Northern Ireland, given the high volume of frequent cross-border travel and the effect on daily life for people in the border regions. The EU’s roaming regulations have removed the previous problem of inadvertent mobile roaming across the Northern Ireland and Ireland border. (See section 2.1 above for further information on roaming).

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