Joint Committee on Draft Communications Bill Report


APPENDIX 1:

Draft Memorandum by the Department for Culture, Media and Sport and the Department of Trade and Industry

This paper is a first draft memorandum on delegated powers set out in the draft Communications Bill. It is a work in progress, and has been provided to the Committee at this early stage in order to assist them with their work. It does not represent a finished or formal document. The Departments will, of course, be happy to supplement any part of this memorandum if the Committee would find it helpful.

Rather than simply going through the Bill clause by clause, this document deals separately with Order making powers and powers to make Regulations given to the Secretary of State (in Section A), powers to make Directions given to the Secretary of State (in Section B) and Order making powers and powers to make Regulations given to OFCOM (in Section C). The powers are dealt with in clause order within each Section.

INTRODUCTION

1  The purpose of the Bill is to give effect to the Government's proposals for the reform of the regulatory framework for the communications sector, as set out in the Communications White Paper - A New Future for Communications (Cm 5010) - published on 12 December 2000.

2  The draft Bill was published on 7 May 2002 for consultation. A Joint Committee for Pre-legislative Scrutiny has been established under the chairmanship of Lord Puttnam and this Joint Committee will deliver its report on the Bill by 7 August 2002. The Government's intention is then to introduce the Bill as soon as Parliamentary time becomes available.

3  The main provisions of the Bill provide for:

  • the transfer of functions to the Office of Communications (OFCOM) from the bodies and office holders which currently regulate the communications sector (which, broadly speaking, encompasses telecommunications, broadcasting and spectrum management);
  • the replacement of the current system of individual licensing for telecommunications systems with a new framework for the regulation of electronic communications networks and services;
  • the power to develop new mechanisms to enable spectrum to be traded in accordance with regulations made by OFCOM, and a scheme of recognised spectrum access;
  • the development of the current system for regulating broadcasting to reflect technological change, to accommodate the switchover from analogue to digital broadcasting, and to introduce a new coherent and more self-regulatory scheme for the public service broadcasters;
  • the establishment of a Consumer Panel to advise and assist OFCOM and to represent consumer interests;
  • the establishment of a Content Board to advise OFCOM in relation to the content of anything broadcast in an electronic communications service, or by means of an electronic communications network;
  • the concurrent exercise by OFCOM of powers under the Competition Act 1998 and the Fair Trading Act 1973 across the whole of the communications sector (including broadcasting); and
  • procedures for appeal of decisions relating to networks and services and rights of use for spectrum.

4  The purpose of this memorandum is to inform the Select Committee as to the powers exercisable under the draft Bill. It is submitted that in some cases such powers are required in order to allow sufficient flexibility to enable the regulatory framework to adapt to changes in technology, in the relevant markets and, if appropriate, in public attitudes on matters such as taste and decency. It is due to the fast-moving and unpredictable nature of the markets in question that provisions cannot be set out absolutely on the face of the draft Bill, but need to be capable of variation to reflect changes in circumstances.

5  Many of the other powers in the draft Bill relate to procedural or technical matters and are needed in order to keep the Bill to a manageable length. Many of the powers in Part 3 of the draft Bill relate to the definition and application of regulations concerning broadcasting and broadcast content: these powers are needed to ensure that the new regulatory framework can adapt to changes in technology, the commercial broadcasting environment and the nation's viewing and listening habits and expectations. Where the orders essentially deal with technical or procedural matters we have opted for use of the negative resolution procedure. Where the order making powers relate to issues of more substance, for example in the regulation of broadcasting and broadcasting content as set out above, we have proposed the use of an affirmative procedure; except where otherwise indicated, references below to the affirmative procedure are to the procedure under which the order or regulations in question must be approved in draft by both Houses of Parliament.

DELEGATED POWERS

6  The draft Bill contains 37 powers for the Secretary of State to make orders and 3 powers for her to make regulations that are described in more detail in section (A) below. It also contains a number of powers for the Secretary of State to give directions, which are set out in section (B) below for completeness. In addition, a limited number of order-making powers, and powers to make regulations, are granted to OFCOM, more description of which is set out - for completeness - in section (C).

7  Clause 254(1) provides that every power conferred by the Bill on the Secretary of State to make orders or regulations is exercisable by statutory instrument. Except where indicated below, and as set out in more detail in clauses 254(2) and (3), all statutory instruments containing an order or regulations made in exercise of such power are subject to annulment in pursuance of a resolution of either House of Parliament. In other words, the statutory instrument is subject to the negative resolution procedure.

8  Every power of the Secretary of State to make an order or regulation under this Bill, other than an order under clause 21 or 259, includes the power to make different provision for different cases, to include exemptions and exceptions, and to make such supplementary provisions as she sees fit.

A  ORDERS AND REGULATIONS

DIRECTIONS IN RESPECT OF NETWORKS OR SPECTRUM FUNCTIONS

9  OFCOM are under a duty to carry out their functions in accordance with such general or specific directions as may be given to them by the Secretary of State. The purposes for which the Secretary of State may give such directions are listed in clause 7(3) and relate to national security, public health and safety, international relations, and compliance with European Community obligations or with any international agreement to which the United Kingdom is party. Clause 7(8) enables the Secretary of State by order to amend clause 7(3) by adding to the purposes specified in that subsection. Orders made under this power would be subject to the affirmative resolution procedure.

DIRECTIONS FOR INTERNATIONAL PURPOSES IN RESPECT OF BROADCASTING FUNCTIONS

10  Clause 8 gives the Secretary of State the power, by order, to make directions in respect of OFCOM's functions under enactments relating to broadcasting. Such directions may only be made for the purposes of securing compliance with an international obligation of the United Kingdom. Clause 8(4) provides that any such direction must be contained in an order made by the Secretary of State.

FUNCTIONS IN RELATION TO EMPLOYMENT IN BROADCASTING

11  Clause 11 requires OFCOM, in relation to persons employed by broadcasters, to take all such steps as they consider appropriate to (a) promote the development for the training and re-training of such persons (and persons working in connection with the provision of such services otherwise than as an employee); (b) promote equality and opportunity; and (c) promote the fair treatment of disabled persons. Currently, equality of opportunity refers to that between men and women, between persons of different racial groups, between disabled persons and persons who are not disabled, and between persons who have had disabilities and persons who are not disabled and have not had disabilities. Clause 11(6) provides that the Secretary of State may amend this list by adding any other form of equality opportunity that she considers appropriate.

TRANSITIONAL FUNCTIONS AND ABOLITION OF PRE-COMMENCEMENT REGULATORS

12  Clause 21(4) and (5) provides that the Secretary of State has a power, by order, to appoint a day for the abolition of the offices of the pre-commencement regulators and of the advisory bodies established under section 54 of the Telecommunications Act 1984. The Secretary of State may appoint different days for the abolition of each of the different regulators and advisory bodies. Clause 254 provides that the negative resolution procedure shall not apply to clause 21.

13  Clause 21(4) and (5) have been included in the Bill to provide the Secretary of State with flexibility so that the relevant practical matters can be undertaken before the offices of the pre-commencement regulators are abolished.

PENALTY FOR CONTRAVENTION OF S. 23

14  Clause 23 allows OFCOM to designate certain classes of networks, services or associated facilities as requiring notification. No one may provide any network, service or associated facility that has been designated in this way, unless he has notified OFCOM in advance of his intention to do so. If a network, service or associated facility already being provided is subsequently designated by OFCOM as requiring notification, the person concerned must notify OFCOM within the time period specified in the designation. OFCOM must also be informed when a person intends to modify or to cease to provide a designated network, service or associated facility.

15  If it appears to OFCOM that a person has failed to so notify OFCOM, they must allow that person a specified period of time (usually one month) in which to make representations to OFCOM, and to comply with its obligations. If by the end of the specified period OFCOM are satisfied that clause 23 has still not been fully complied with, OFCOM may impose a fine of up to £10,000. Clause 28(10) enables the Secretary of State by order to substitute a different amount as the fine.

16  A power allowing the Secretary of State to vary a penalty provision is a standard delegation. If, after the Act has commenced, the Secretary of State believes that the amount set as a fine is not sufficient to provide a deterrent effect, or is for any other reason ineffective, this power will allow her to revise the level of the fine in the light of that experience.

PENALTIES FOR NON-PAYMENT OF CHARGES

17  If clause 29, which imposes administrative charges on providers of designated electronic communications networks, electronic communications services or associated facilities is not complied with, OFCOM may fine the notified provider. In deciding on the amount of a fine, OFCOM are required to consider whether the fine is appropriate and proportionate, and to take account of any representations made by the person concerned, and any steps taken by him to comply with clause 29. The maximum fine that may be imposed under this clause is twice the amount of the relevant administrative charge for the year in question. Clause 32(9) provides that the Secretary of State may by order amend the multiplier used in setting that maximum fine.

18  As indicated above, a power allowing the Secretary of State to vary a penalty provision is a standard delegation. If, in the light of experience after the Act has commenced, the Secretary of State believes that the amount set as a fine is not sufficient to provide a deterrent effect, or is for any other reason ineffective, this power will allow her to amend the level of the maximum fine.

TELEPHONE NUMBERING

19  Clauses 43 to 48 contain provisions for the regulation of telephone numbers. However, clause 43(8) provides that the Secretary of State may by order exclude such numbers as may be described from the numbers that are to be treated as telephone numbers for the purposes of Part 2, Chapter 1. Because of the constantly evolving nature of communications services, any definition of "telephone numbers" which was limited to what we currently recognise as such would be liable to go out of date. By way of future proofing, the draft Bill therefore uses a very general definition. As this would result in catching certain kinds of electronic identifier that do not require regulation in the near term, the intention is to use the power in this subsection to exclude e.g., e-mail addresses, domain names, etc.

MUST-CARRY OBLIGATIONS

20  General conditions may include provisions to ensure that services on the must carry list are carried, provided that the network is one which is used by a significant number of end users as their principal means of receiving television or radio. The must carry list contains the following services: a service of television programmes provided by the BBC in digital form (where the service is one in relation to which OFCOM have functions), digital channel 3, digital channel 4, digital channel 5, digital S4C and the digital public teletext service. Clause 49(5) provides that the Secretary of State can, by order, modify this list.

21  Clause 49(7) provides that the Secretary of State may by order make provision imposing requirements as to the terms on which a service is to be broadcast or otherwise transmitted. The Secretary of State must keep the list and the terms of trade under review. If she makes an order that allows for payment to be made, no subsequent order can reverse that.

AMOUNT OF PENALTY UNDER SECTION 76

22  Where it appears to OFCOM that a person is or has been in breach of any condition set by OFCOM under clause 35, they are obliged by subsection (1) to notify that person accordingly, and allow him a specified period of time (usually one month) in which to make representations to OFCOM and to take steps to comply with the condition or remedy the breach. Failure to comply will result in an enforcement notice being served by OFCOM. Where an enforcement notification has not been complied with, within the period allowed to the notified provider by OFCOM to make representations, OFCOM may impose a penalty. The upper limit for such a penalty is ten per cent. of the notified provider's turnover, and clause 77(3) provides that this turnover shall be set in accordance with such rules as may be set out by order made by the Secretary of State. Such an order can also determine what is to be treated as the network, service, facility or business by reference to which the calculation of that turnover falls to be made. Such orders are subject to the affirmative resolution procedure.

23  Clause 77(5) provides that the Secretary of State may amend this section by order so as to substitute a different percentage figure from the ten per cent. specified above. A power allowing the Secretary of State to vary a penalty provision is a standard delegation. If, in the light of experience after the Act has commenced, the Secretary of State believes that the amount set as a fine is not sufficient to provide a deterrent effect, or is for any other reason ineffective, this power will allow her to amend the level of the maximum fine.

RESTRICTIONS AND CONDITIONS SUBJECT TO WHICH CODE APPLIES

25  Clause 85(1) provides that the Secretary of State, following consultation with OFCOM and others, may, by regulations, make the application of the code subject to restrictions and conditions. In making such regulations, the Secretary of State must consider OFCOM's general duties, and duties for the purpose of fulfilling Community obligations. She must also consider the environment, road-traffic management, the need to encourage the sharing of apparatus, and the necessity of ensuring that the provider will be able to meet any liabilities incurred due to the imposition of the code. Before making regulations under this section the Secretary of State must consult with OFCOM and such other person as she thinks appropriate.

PENALTIES FOR CONTRAVENTION OF CODE RESTRICTIONS

26  Where a notified provider has not complied with a notified requirement, or remedied the consequences of the notified contravention, OFCOM may impose a penalty. In deciding on the amount of a financial penalty, OFCOM are required to consider whether the fine is appropriate and proportionate, and to take account of any representations made by the person concerned and any steps taken by him to comply with the condition or restriction in question. The maximum fine that may be imposed under this clause is £10,000. Clause 88(10) provides that the Secretary of State may by order amend this section so as to substitute a different maximum penalty.

27  As noted above, a power allowing the Secretary of State to vary a penalty provision is a standard delegation. If, in the light of experience after the Act has commenced, the Secretary of State believes that the amount set as a fine is not sufficient to provide a deterrent effect, or is for any other reason ineffective, this power will allow her to amend the level of the maximum fine.

NOTIFICATION OF CESSATION BY PERSON TO WHOM CODE APPLIES

28  Where the electronic communications code has been applied to a person who does not provide an electronic communications network of the type designated under clause 23, and that person ceases to provide the network, he must notify OFCOM. Failure to do so may result in the provider being penalised an amount not exceeding £1000. Clause 91(8) provides that the Secretary of State may by order amend this section so as to substitute a different maximum penalty.

29  As above, power allowing the Secretary of State to vary a penalty provision is a standard delegation. If, in the light of experience after the Act has commenced, the Secretary of State believes that the amount set as a fine is not sufficient to provide a deterrent effect, or is for any other reason ineffective, this power will allow her to amend the level of the maximum fine.

PENALTIES FOR CONTRAVENING INFORMATION REQUIREMENT

30  Clause 98 gives OFCOM information-gathering powers. Where it appears to OFCOM that a person is or has been in breach of any requirement under clause 98, they are obliged by clause 99 to notify that person accordingly, and allow him a specified period of time (usually one month) in which to make representations to OFCOM and to take steps to comply with the notified requirement. Where a notified provider has not complied with a notified requirement, or remedied the consequences of the notified contravention, OFCOM may impose a penalty. The maximum fine that may be imposed under this clause is £50,000. Clause 101(9) provides that the Secretary of State may by order amend this section so as to substitute a different maximum penalty.

31  Again, a power allowing the Secretary of State to vary a penalty provision is a standard delegation. If, in the light of experience after the Act has commenced, the Secretary of State believes that the amount set as a fine is not sufficient to provide a deterrent effect, or is for any other reason ineffective, this power will allow her to amend the level of the maximum fine.

DIRECTIONS WITH RESPECT TO THE RADIO SPECTRUM

32  Clause 112 gives the Secretary of State a power, by order, to give general or specific directions to OFCOM about the carrying out of their spectrum functions. They may include a direction: (a) to reserve certain frequencies for different classes of use or user, for example broadcasting, mobile telecommunications, private business systems, air traffic control or radio astronomy, or within a class, for example for the provision of additional digital television or sound broadcasting multiplexes; or (b) to exercise their powers under the proviso to section 1(1) of the Wireless Telegraphy Act 1949 and/or sections 1 to 3A of the Wireless Telegraphy Act 1998 in accordance with the provisions of the direction. This power is in addition to the power conferred on the Secretary of State by clause 7 to give directions for limited purposes in accordance with which OFCOM must exercise their functions. The order is subject to the form of affirmative resolution procedure under which the order may be made first and is then laid before Parliament but ceases to have effect if not approved by both Houses within 40 Parliamentary days.

33  The Government has not yet reached a conclusion on the scope of the powers of direction on spectrum. The independent review of radio spectrum management by Professor Martin Cave recommended that they should not extend to the specifics of spectrum management. The Government is considering the review's report and will publish its response in the summer. Like other spectrum provisions, including those on Recognised Spectrum Access referred to below, the powers of direction may be changed in the light of the Government's response.

34  The radio spectrum is a finite resource of considerable economic and strategic importance. It is used widely within the communications sector and also beyond it, including for services essential to national security and safety of life. It is necessary in managing the spectrum to balance competing claims for access to this resource. By being able to reserve certain frequencies, the Secretary of State will be able to exercise control over which users and which applications have priority. She can, therefore, intervene to ensure that the spectrum resource is distributed optimally amongst all users of the spectrum, whether inside or outside the communications sector and whether commercial or non-commercial, in the broader national interest.

35  The proviso to section 1(1) of the Wireless Telegraphy Act 1949 allows classes or descriptions of wireless telegraphy stations or apparatus to be exempted from licensing requirements by regulations made by the Secretary of State. Such regulations will be made by OFCOM once the Bill comes into force. Section 1 of the Wireless Telegraphy Act 1998 allows the Secretary of State to make regulations setting the fees to be paid on the issue and renewal of wireless telegraphy licences (other than television licences). Section 2 of the 1998 Act provides for administrative incentive pricing which allows the Secretary of State to charge licence fees above the cost of exercising wireless telegraphy functions. Section 3 of the 1998 Act allows the Secretary of State to make regulations providing for wireless telegraphy licences to be awarded by means of spectrum auctions. Again, regulations under sections 2 and 3 will be made by OFCOM when the Bill comes into force. Section 3A is added by clause 117(4).

SPECIAL PROCEDURE FOR CONTRAVENTIONS BY MULTIPLEX LICENCE HOLDERS

36  Clause 132 gives OFCOM a power to impose fines for breach of the conditions of any "general multiplex licence". This will bring the enforcement regime for such multiplexes into line with that under the Broadcasting Acts of 1990 and 1996. Subsection (2) provides that the maximum penalty that OFCOM may impose under this clause will be the greater of either £250,000 or a percentage of the relevant amount of gross revenue. Clause 132(8) provides for the Secretary of State to amend by order the amount specified. This flexibility reflects provisions in the Broadcasting Act 1990 and allows the maximum to be adjusted in the light of changing circumstances.

"RELEVANT AMOUNT OF GROSS REVENUE" FOR THE PURPOSES OF S. 132

37  Clause 133(4) provides that a person's gross revenue for any period, for the purposes of clause 132, is to be calculated in accordance with such rules as may be set in an order made by the Secretary of State. Such an order may also make provision about the manner of determining the extent to which any part of a person's gross revenue is attributable to the provision of any service. These orders are subject to the affirmative resolution procedure.

MODIFICATION OF DEFINITION OF "WIRELESS TELEGRAPHY"

38  Clause 139 gives the Secretary of State the power to modify by order, subject to the affirmative resolution procedure, the definition of "wireless telegraphy" in section 19(1) of the Wireless Telegraphy Act 1949 so as to vary the upper frequency limit (currently 3000 Giga-Hertz) of the electromagnetic spectrum to which the Wireless Telegraphy Acts apply. Although current technology does not permit the use for radiocommunications of frequencies anywhere near that limit, as technology progresses it may be necessary to raise the ceiling, for example to include laser systems if licensing were to become necessary to prevent such systems from interfering with each other. Such an order would be subject to the affirmative resolution procedure.

MODIFICATION OF SS. 154 AND 155

39  Clause 156 provides that the Secretary of State may modify clause 154 - the meaning of "television licensable content service" - or clause 155 - a description of services that are not television licensable content services - by order, if she considers it appropriate. The order may also modify clause 238 (meaning of "available for reception by members of the general public"). In making any modification, she must take into account the level of protection expected by the public as respects the content of television programmes and text services, taking into account the means of reception; the ability of the public - having been made aware of the contents of a forthcoming programme - to control what they watch; technical innovation; the financial consequences of modification; and the relative ease or difficulty of setting different levels of regulation for different services. Such an order is subject to the affirmative resolution procedure.

POWERS WHERE FREQUENCIES RESERVED FOR QUALIFYING SERVICES

40  OFCOM, in fulfilling their spectrum management role, may reserve digital capacity on particular frequencies for use by relevant public service broadcasters other than the BBC. Clause 165(1) provides that the Secretary of State may by order require that digital terrestrial television services be licensed by OFCOM for broadcast on such frequencies. That order may either apply sections of the Broadcasting Act 1996 (with any appropriate modifications), or may make provision having effect in place of those sections.

LOCAL DIGITAL TELEVISION SERVICES

41  Clause 167(1) allows the Secretary of State, by order, to provide for Part 3 of the Bill (so far as it relates to television), Part 1 of the 1990 Act and Part 1 of the 1996 Act to have effect with appropriate modifications so as to allow for the provision of local digital television services. Such services should be provided with a view to including them in a television multiplex service. Such an order can be made only where the Secretary of State is satisfied that this will enhance the provision of such services. In turn, this should benefit the locality where the services are to be received, not least by broadening the range of programmes that can be received in that locality. The order may restrict advertising and programme sponsorship in the service. Such an order is subject to the affirmative resolution procedure.

MODIFICATION OF SS. 170 AND 171

42  Clause 172 provides that the Secretary of State may modify clause 170 - the meaning of "radio licensable content service" - or clause 171 - a description of services that are not radio licensable content services - by order, if she considers it appropriate. The order may also modify clause 238 (meaning of "available for reception by members of the general public"). In making any modification she must take into account one or more of the following: the level of content protection expected by the public; technical innovation; the fiscal consequences of modification; and the relative ease or difficulty of setting different levels of regulation for different services. The Secretary of State may also provide that a particular service should not be treated as a radio licensable content service for such provisions of this Bill as she specifies. Such an order is subject to the affirmative resolution procedure.

ACCESS RADIO

43  Clause 179 provides that the Secretary of State may, by order, modify regulation under the Bill, and the Broadcasting Acts, to permit the introduction of access radio. Such radio services should be broadcast mainly for the benefit of the public (or members of a particular community) rather than for commercial reasons and the services should confer significant benefits on the public for which they are provided. The order may restrict advertising and programme sponsorship in the services. Such an order is subject to the affirmative resolution procedure.

APPLICATION OF REGULATORY REGIMES

44  OFCOM must use their Broadcasting Act powers, and their powers under this Bill, to implement and enforce the regulatory regime for each service. These obligations apply equally to programmes included in digital or analogue simulcasts that are permitted or required by the licence for any Channel 3 service, for Channel 4 or for Channel 5. Clause 180(7) provides that the Secretary of State has the power, by order, to remove any provision from the regulatory regime. This power is required to allow for deregulation in the broadcasting sector if appropriate. Such an order is subject to the affirmative resolution procedure.

POWER TO AMEND PUBLIC SERVICE REMITS

45  Clause 188 provides the Secretary of State with the power, following a recommendation from OFCOM, to make an order amending the public service remits under clause 182, the list of public service television broadcasting requirements set out at clause 181(3), and the list of more detailed requirements set out at subsections (4) and (5) of clause 181. Both OFCOM and the Secretary of State will be under an obligation to consult such public service broadcasters (including the public teletext service provider if appropriate) as are likely to be affected by the remit change being proposed. Any such order made by the Secretary of State is subject to the affirmative resolution procedure.

PROGRAMMING QUOTAS FOR INDEPENDENT PRODUCTIONS

46  Clause 189 provides that OFCOM are to include conditions in the licences of all public service channels in order to secure that at least 25 per cent. of the time allocated to the broadcasting of qualifying programmes on that channel is allocated to the broadcasting of a range and diversity of independent productions. "Qualifying programmes" and "independent productions" are defined as such by the Secretary of State by order made under subsection (2) (a) or (b). The Secretary of State also has the power, under clause 189(3), to amend the percentage of time allocated to the broadcasting of qualifying programmes. Before making such an order, the Secretary of State must consult OFCOM, the BBC and the Welsh Authority. Any order under this clause is subject to the affirmative resolution procedure.

POWER TO MODIFY TARGETS IN SECTION 203

47  Clause 203 provides that OFCOM are to draw up, publish and maintain a code giving guidance as to extent to which the services to which the section applies should promote the understanding and enjoyment by those who are deaf or hard of hearing, and blind or partially-sighted. Subsections (2) and (3) set out the targets for the proportion of programmes contained in those services set out at subsection (9) that shall, within 10 years of the 'relevant date' (which is defined in clause 205), be respectively subtitled, audio-described, and presented in or translated into sign language. Clause 206(1) provides that the Secretary of State, following consultation with OFCOM, may by order vary the target percentages set out in subsection (3) of clause 203. She may also extend the deadline for those targets to be reached, and include additional obligations in the code. This power is provided in order to allow the Secretary of State to respond to unforeseen changes in need, or the commercial or technological broadcasting environment. Such an order is subject to the affirmative resolution procedure.

QUOTAS FOR INDEPENDENT PROGRAMMES

48  Clause 208 provides that OFCOM shall set licence conditions for all digital television programme services that are not included in a licensed public service channel to ensure that at least 10 per cent. of the time allocated to the broadcasting of qualifying programmes in the service is allocated to the broadcasting of a range and diversity of independent productions. The Secretary of State may, by order, and having consulted OFCOM, vary this percentage. The reference to qualifying programmes, and to independent productions, shall both be construed as references to the descriptions of such programmes or productions as the Secretary of State has by order specified. Any order under this clause is subject to the affirmative resolution procedure.

CODE OF PRACTICE FOR ELECTRONIC VISUAL PROGRAMME GUIDE

49  OFCOM must draft and maintain a code of practice for electronic visual programme guides. This may extend to ensuring that programmes on public service channels are adequately listed or promoted in, and made accessible from, the guide. For the purposes of these provisions the public service channels are, the BBC, any Channel 3 service in digital form, Channel 4 in digital form, Channel 5 in digital form, S4C digital, the digital public teletext service. Clause 209(4) provides the Secretary of State with a power to amend this list by order. Before making such an order, the Secretary of State must consult OFCOM.

MODIFICATION OF MATTERS TO BE TAKEN INTO ACCOUNT UNDER S. 212

50  Clause 212 places OFCOM under a duty to set standards for the content of television and radio services, which shall be contained in a code or codes. In setting the codes, OFCOM are under a duty to have regard to the factors set out in subsection (4). These concern the degree of harm or offence like to be caused by the content of programmes; the probable size and composition of the audience; the expectation and state of awareness of the audience as to a programme's content; the danger of accidental exposure of a person to content, the nature of which they were unaware; and the desirability of the content of a programme being left in the hands of its editors. Clause 216 provides that the Secretary of State, following consultation with OFCOM, may by order modify the factors set out in clause 212(4) to be considered by OFCOM when setting or amending standards codes. Such an order is subject to the affirmative resolution procedure.

PROMOTION OF EQUAL OPPORTUNITIES AND TRAINING

51  Clause 224 provides that licence holders shall be required by OFCOM to promote equal opportunities in relation to employment between men and women, between different races, and between the disabled and those who are not disabled. Those licence holders that employ fewer than the threshold number of people (20) or broadcast for fewer than the threshold number of days per year (31) are not caught by these provisions. Clause 224(8) provides that the Secretary of State may, by order, add any other form of equality of opportunity that she considers appropriate, and amend either of the threshold numbers specified above.

LICENCE REQUIRED FOR USE OF TV RECEIVER

52  Clause 240 prohibits the installation or use of a television receiver without a TV licence issued by the BBC, and makes it an offence, punishable by a fine, for any person to:

  • install or use a television set without a TV licence; or
  • possess a television set, intending to install or use it without a TV licence, or knowing (or having reasonable grounds for believing) that another person intends to install or use it without a TV licence.

However, Clause 240(6) gives the Secretary of State the power to make regulations exempting from the requirement of a licence, certain categories of person in certain circumstances.

TV LICENCE FEES

53  Clause 242 permits the Secretary of State - subject to obtaining the consent of the Treasury - to make regulations setting the fees payable by licensees to the BBC (a) on the issue or renewal of a TV licence, and (b) in such other circumstances as the Secretary of State provides for in the regulations. Regulations may also allow for concessions, and provide for payment of the licence fee by instalments.

MEANING OF "TELEVISION RECEIVER" ETC

54  Clause 245(1) defines a television receiver as apparatus of a description defined by the Secretary of State, by order, as a television receiver. This power is needed to allow for technological changes.

MATTERS IN RELATION TO WHICH OFCOM HAVE COMPETITION ETC. FUNCTIONS

55  Clause 246 explains the expression "communications matters" as it is used throughout this Part. "Communications matters" include any one or more of the following:

  • the provision of electronic communications networks;
  • the provision of electronic communications services;
  • the making available of services or facilities in association with a network or service or for facilitating the use of a network or service;
  • apparatus used for any of the above;
  • broadcasting and related matters.

The significance of this definition is that it determines the scope of OFCOM's concurrent powers under the Competition Act and Fair Trading Act as set out in Part 5 of the Bill.

56  Clause 246(2) gives the Secretary of State a power by order to amend this definition. This allows the Secretary of State sufficient flexibility to ensure that nothing that should be captured by the definition of "communication matters" escapes that definition. An order under this clause is subject to the affirmative resolution procedure.

GENERAL RESTRICTION ON DISCLOSURE OF INFORMATION]

57  Clause 251 imposes limits on the disclosure of information relating to the affairs of any particular business obtained under this Bill. Subsection (1) prohibits the disclosure of such information while the business in question is still being carried on, unless consent has been obtained from the person carrying on that business. Subsection (2) provides for a limited number of exemptions from this prohibition where the disclosure satisfies certain criteria. One examples of an exempt disclosure is that required to facilitate the carrying out by Ministers, the DGFT, the Competition Commission, the Consumer Panel or a local weights and measures authority of 'relevant functions' under this Bill or other specified enactments. Clause 251(3)(f) provides that this exemption can be extended to such other person as is specified by an order made by the Secretary of State. Clause 251(4)(c) provides that 'relevant functions' shall include such other functions as specified by an order made by the Secretary of State. Any order under this clause is subject to the affirmative resolution procedure.

MINOR AND CONSEQUENTIAL AMENDMENTS, TRANSITIONALS AND REPEALS

58  Clause 258(2) provides that the Secretary of State may by order make such consequential modifications of any local enactment or subordinate legislation as she thinks appropriate in consequence of any provision of the Bill. This is a natural result of the implementation of the Bill, and allows the Secretary of State, in order to ensure consistency, to deal with any effects that implementation has upon existing legislation.

COMMENCEMENT

59  Clause 259 (2) gives the Secretary of State the power by order to bring the Act into force on different days and for different purposes. The intention is to provide the Secretary of State with flexibility so that, for example, those provisions implementing EC Directive requirements can be brought into force on the day required, whilst other provisions might need to be brought into force at a different time.

RETROSPECTIVE MODIFICATION OF A TRANSFER SCHEME

60  Paragraph 3(1) of Schedule 2 gives the Secretary of State the power, by order, following consultation with OFCOM, to provide for a transfer scheme to be deemed to have come into force with such modifications (including modifications retrospective to the time of the coming into force of the scheme) as may be provided for in the order. The power exercisable under this provision may only be exercisable for the purpose of making provision that could have been made by the scheme. The reason for the inclusion of this provision is to ensure that the Secretary of State may modify a transfer scheme where a matter comes to light that was not apparent at the time the transfer scheme came into force. For example, a particular liability or right of one of the existing regulators may come to light after a transfer scheme has been made and in such a case this provision would enable the Secretary of State to modify the transfer scheme in order to transfer that liability or right to OFCOM.

B  DIRECTIONS

DIRECTIONS IN RESPECT OF NETWORKS OR SPECTRUM FUNCTIONS

61  OFCOM are under a duty to carry out their functions in accordance with such general or specific directions as may be given to them by the Secretary of State as provided for at clause 7(2). The purposes for which the Secretary of State may give such directions are listed in clause 7(3) and relate to national security, public health and safety, international relations, and compliance with European Community obligations or with any international agreement to which the United Kingdom is party. The Secretary of State shall publish a direction under this clause in such a manner as she considers appropriate for the purpose of bringing it to the attention of the persons most likely to be affected by it.

62  Under Clause 9, the Secretary of State may require OFCOM to represent the UK in international and other bodies that deal with communications matters, by representing Her Majesty's Government, attending meetings in their own right in their capacity as the UK communications regulator or subscribing to such bodies.

PROVISION OF INFORMATION TO THE SECRETARY OF STATE

63  Clause 14 provides that, when directed to do so, OFCOM must provide the Secretary of State with such information as is reasonably required by the Secretary of State in order to enable her to secure compliance with an international obligation of the United Kingdom. The direction will also set out the manner by and times at which such information must be provided.

TRANSFERS OF PROPERTY ETC. FROM PRE-COMMENCEMENT REGULATORS

64  Clause 20 would give the Secretary of State a power to make directions requiring any pre-commencement regulator to make a scheme or schemes for the transfer to OFCOM of any of that regulator's property, rights and liabilities. The Office of Communications Act 2002 gives the Secretary of State a power to require that such schemes are prepared in draft form. Before making such a scheme the pre-commencement regulator must consult OFCOM, and must submit that scheme to the Secretary of State for approval.

TRANSITIONAL FUNCTIONS AND ABOLITION OF PRE-COMMENCEMENT REGULATORS

65  Clause 21 imposes a duty on the pre-commencement regulators to take all such steps as are necessary or expedient for ensuring that OFCOM are able effectively to carry out their functions from the time that they are vested in OFCOM. Clause 21(2) provides that the Secretary of State may direct the pre-commencement regulators as to how to carry out this duty.

POWERS TO REQUIRE SUSPENSION OR RESTRICTION OF A PROVIDER'S ENTITLEMENT

66  Clause 106(1) gives the Secretary of State a power to direct OFCOM to issue a person with a direction to suspend or restrict that person's entitlement to provide a network, service and/or associated facility where it appears to her to be necessary to protect the public from any threat to public safety or public health, or in the interests of national security. This is permitted by Article 3 of the Authorisation Directive.

67  Subsection (2) places OFCOM under a duty to comply with any such direction by the Secretary of State. Once a suspension or restriction is in place, both the Secretary of State and OFCOM must allow the person in question an opportunity to make representations to them and to propose steps for remedying the situation. OFCOM may modify the terms of a suspension or restriction imposed under this clause. The Secretary of State may direct OFCOM to revoke a suspension or restriction imposed under this clause.

OBJECTIVES FOR ADVERTISEMENTS AND SPONSORSHIP

68  Standards set by OFCOM must ensure that the inclusion of unsuitable advertising in television and radio is prevented. Clause 214 deals with the specific objectives for advertisements and sponsorship. Subsection (1) requires the standards set by OFCOM to include general provisions about the required standards in advertising and sponsorship and permits OFCOM to prohibit advertisements and methods of advertising and sponsorship.

69  Subsection (4) imposes on OFCOM a general responsibility, with regard to advertising and sponsorship. To fulfil this responsibility, OFCOM are permitted to impose licence conditions that go further than the specific terms of OFCOM's standards code. This clause also provides for consultation between the Secretary of State and OFCOM on what advertising should not be included in a programme service and the forms and types of advertising and sponsorship that should not be used. In addition, clause 214(5) provides that the Secretary of State has a power to issue directions (which OFCOM must comply with) on any of these matters.

DIRECTIONS TO WELSH AUTHORITY TO TAKE REMEDIAL ACTION

70  Clause 226 provides that the Welsh Authority is under a duty to ensure that that S4C and S4C Digital fulfil their public service remits. The Secretary of State may review the Welsh Authority's performance in this regard, but not within five years of the passing of the Act. Any subsequent review must not be undertaken within a further five-year period. The Secretary of State must publish a report of her conclusions after each review. Clause 227(2) provides that, if the review reveals that, without reasonable justification, the Welsh Authority has not properly performed its duty, the Secretary of State may direct the Welsh Authority to take remedial action. However, the Secretary of State shall not give such a direction unless, having consulted with the Welsh Authority, a draft of the proposed direction has been laid before Parliament and approved by a resolution of both Houses.

TV LICENCES

71  Clause 241(1) provides that the BBC has the power to issue TV licences. The BBC may include in TV licences such conditions and restrictions as it thinks fit, but must attach such conditions and restrictions as the Secretary of State directs, and may not attach any conditions expressly prohibited by a direction issued by the Secretary of State. It shall be the duty of the BBC to revoke or modify a TV licence if directed to do so by the Secretary of State. Any direction by the Secretary of State under this section may be given either generally in relation to all TV licences or in relation to a particular licence.

C  OFCOM

72  The Bill grants OFCOM a degree of discretion in, for example, matters such as approving codes of conduct and enforcing licence conditions. However, the Bill also contains a limited number of grants of delegated powers that are to be made by order or regulation. Clause 255 provides that any power of OFCOM to make regulations or to make an order shall be exercisable by statutory instrument. However, before making any regulation or order, OFCOM shall publicise their proposal, allow at least 28 days for responses, and consider any representations received.

REGISTER OF DESIGNATIONS AND PROVIDERS

73  Clause 25 places OFCOM under a duty to keep an up-to-date public register of designations made under clause 22 and the persons who provide designated networks, services and associated facilities. This register will be compiled by OFCOM using the information supplied in notifications submitted under clause 23. Clause 25(4) gives OFCOM an order-making power to fix the hours during which this register will be open to the public, and the fees for inspection. This must then be notified to all those likely to be affected by this information.

ORDERS BY OFCOM IN THE ABSENCE OF CONDITIONS UNDER S. 39

74  Clause 42 enables OFCOM, by order, to take appropriate measures where public communications providers have failed to put in place suitable procedures, standards and policies for complaints handling and dispute resolution, and where OFCOM consider it necessary for the protection of consumers or to comply with EU obligations. Appropriate measures by OFCOM may include establishing an independent body corporate to administer and enforce the necessary arrangements, and obliging public communications providers to pay for the establishment and maintenance of such a body. Before making an order under this clause, OFCOM must consult the Secretary of State. A statutory instrument containing such an order is subject to annulment in pursuance of a resolution of either House of Parliament.

DESIGNATION OF UNIVERSAL SERVICE PROVIDERS

75  Clause 51(1) provides that OFCOM have the power, by regulations, to provide for a procedure for designation of providers (or non-providers in the case of supplying directories or directory enquiry facilities) that will be subject to universal service conditions. Such regulations must establish an efficient, objective, transparent, and non-discriminatory procedure for designation.

SHARING OF BURDEN OF UNIVERSAL SERVICE OBLIGATIONS

76  Clause 55 enables OFCOM to periodically analyse the net financial cost to a designated provider of complying with universal service conditions applied to him. OFCOM shall then have these costs audited by an independent auditor, or shall themselves audit those figures. Based on the audit report, OFCOM are under a duty to publish their conclusions, alongside a summary of that report.

77  If, following such an analysis, OFCOM conclude that a net financial burden is imposed on the provider of universal services, OFCOM shall assess whether it would be unfair for that provider to shoulder the entire burden. If they determine that it would be unfair, and if the provider applies to them, OFCOM may determine that contributions from other providers, who themselves are subject to general conditions, are to be made. Clause 56(4) provides that all this should be carried out in accordance with regulations made by OFCOM. These regulations should ensure that the calculation, collection and distribution of such contributions is to be done in an objective, transparent, and non-discriminatory way, and in a manner that avoids or minimises any distortion to competition or demand.

78  Clause 57 provides that where regulations that provide for the sharing of the financial burden of providing universal services are in place under clause 56, OFCOM must prepare and publish an annual report about the process.

APPLICATION OF THE ELECTRONIC COMMUNICATIONS CODE

79  Clauses 82 to 95 and Schedule 3 amend the telecommunications code (set out in Schedule 2 to the Telecommunications Act 1984) in order to translate it into a code applicable to apparatus used in electronic communications networks and services. The telecommunications code is designed to facilitate the installation and maintenance of telecommunications systems. It confers rights on operators to install and maintain apparatus in, over or under land and results in considerably simplified planning procedures, similar to those given to utilities. Paragraph 16(3) of the new electronic communications code, as it shall be known, specifies the minimum amount of compensation entitled to the holder of land disrupted by a provider with code powers. Clause 82(5) provides that OFCOM may, by order, substitute a different amount for that set out in paragraph 16(3) of the Code.

REGISTER OF PERSONS IN WHOSE CASE THE CODE APPLIES

80  Clause 84 places OFCOM under a duty to keep an up-to-date public register of persons to whom the electronic communications code applies and to record in this register every direction applying the code that is given under clause 83. Clause 84(4) provides that OFCOM must make the register available for public inspection, and may by order prescribe the hours during which this register will be open to the public, and the fees for inspection.

TRANSITIONAL SCHEMES ON CESSATION OF APPLICATION OF CODE

81  Clause 92(1) provides that OFCOM, may by order, put in place a transitional scheme in cases where the electronic communications code has ceased to apply to a provider by reason of the code being either suspended, or revoked or modified in relation to that provider.

82  Subsection (3) gives a non-exhaustive list of the type of provision that might be contained in a transitional scheme. The examples given relate to the removal or retention of apparatus installed under the code, and the restoration of land affected by the code. Such a scheme may also provide for the transfer of rights and liabilities arising out of agreements made or obligations incurred under the code; authorise apparatus on code land to be retained for use by other providers; and provide for any issues arising from the scheme to be referred to OFCOM.

83  A statutory instrument containing such an order is subject to annulment in pursuance of a resolution of either House of Parliament.

GRANT OF RECOGNISED SPECTRUM ACCESS

84  Clauses 115 to 118 introduce a new scheme of "recognised spectrum access". Recognised spectrum access ("RSA") will offer greater security and quality of access to spectrum to persons who, in circumstances to be specified by OFCOM in regulations, transmit radio signals for reception in the United Kingdom, but who are not currently required to hold a licence under the Wireless Telegraphy Acts. The scheme is likely to apply to operators of wireless telegraphy stations or apparatus (for example, satellites) that are located outside the UK, who cannot be licensed under the current legislation and so cannot formally be recognised in spectrum management decisions. RSA will not be compulsory. Clause 115(1) provides that RSA will be available where a person is proposing to use or to continue to use a station or apparatus for wireless telegraphy in circumstances specified by regulations made by OFCOM. RSA may be auctioned and Clause 117(4) provides for OFCOM to make regulations governing the conduct of auctions of RSA. This parallels provisions for auctioning licences.

CONVERSION INTO AND FROM WIRELESS TELEGRAPHY LICENCES

85  Clause 118 provides that OFCOM may by regulation make provision for the conversion of a wireless telegraphy licence into a grant of RSA, and vice versa. This will enhance flexibility in spectrum use, especially in frequency bands that are shared by licensed services and services that have RSA.

LIMITATIONS ON AUTHORISED SPECTRUM USE

86  Clause 120(1) provides that, where OFCOM consider it appropriate to limit the number of wireless telegraphy licences or grants of RSA on certain frequencies or for certain uses for the purpose of ensuring efficient spectrum management, they must do so by order. The purpose of this duty is to ensure fairness between potential users. The order must set out the criteria OFCOM will apply in limiting the number of grants and deciding to whom to issue licences or RSA. The criteria must be objective, non-discriminatory, proportionate and transparent. OFCOM must keep the criteria under review. Clause 120(7) provides that it shall be a duty of OFCOM to make an order revoking or amending any provision of an order made under clause 120 if, on reviewing it, they consider it necessary to do so for the purpose of securing the efficient use of the electro-magnetic spectrum.

SPECTRUM TRADING

87  Clause 124 gives OFCOM the power to make regulations authorising the holder of a wireless telegraphy licence or the holder of a grant of RSA to transfer the rights and obligations under their licence or RSA grant to another person. This will enable the development of a secondary market in licences and RSA where this is permitted by OFCOM. It is envisaged that spectrum trading will be introduced progressively and will be tailored to the technical and market characteristics of the service in question. Subsection (3) sets out the range of provisions that may be included in regulations authorising spectrum trading. For example, under paragraphs (c) and (e) regulations may require the approval of OFCOM before a trade can be made, and may make trades subject to compliance with conditions imposed by OFCOM. Under paragraph (i), the regulations may require that trades be notified to OFCOM both in advance of, and after, the trade taking place.

88  The introduction of spectrum trading continues the market-based approach to spectrum management introduced by the Wireless Telegraphy Act 1998. Before 1998, spectrum management in the UK relied exclusively on administrative allocation. The 1998 Act introduced new market-based tools, administrative incentive pricing, and spectrum auctions, in order that the finite spectrum resource could be managed more effectively.

WIRELESS TELEGRAPHY REGISTER

89  Clause 126 provides that OFCOM may, by regulation, set up a public register of information about the holders of wireless telegraphy licences, and those to whom recognised spectrum access has been granted. This may also include details about the licences and frequencies assigned. The Radiocommunications Agency has recently conducted a consultation about such disclosure and any safeguards that may be needed. The regulations may also prescribe when the register shall be open to the public.

REGULATIONS ABOUT COVERAGE OF LISTED EVENTS

90  Clause 202 inserts a new section 104A into the Broadcasting Act 1996 enabling OFCOM to make regulations for determining, for the purposes of Part IV of that Act, first, the circumstances in which the televising of listed events is or is not to be to treated as live (listed events are sporting or other events of national interest, which the Secretary of State has listed for the purpose of attracting the legal consequences provided for by Part IV) and, secondly, what is to be taken to represent the provision of adequate alternative coverage for the purpose of section 101(1C) of the 1996 Act.

D  OTHER MISCELLANEOUS DELEGATED POWERS

ADVANCE NOTIFICATION TO OFCOM

91  Clause 23(1) provides that a person shall not provide a designated electronic communications electronic communications network or service or make available a designated associated facility unless before beginning to provide it or make it available he has given a notification to OFCOM. Clause 23(2) provides that an electronic communications network, an electronic communications service or an associated facility is designated if it is of a description of network, services or facilities that is for the time being designated by OFCOM as a description of networks, services of facilities for which notification is required. This provision enables OFCOM to ensure that they are notified of all networks, services and associated facilities, which they consider they need to know are being provided or made available. It would not be possible to specify these networks, service and associated facilities on the face of the Bill, because given rapid technological changes, it would be impossible to know in advance what these would be. The alternative, which would be requiring all providers of networks and services and people who make available associated facilities to notify OFCOM, would result in OFCOM being overloaded with unnecessary information and would also place additional unnecessary burdens on the persons providing or making available those networks, service and associated facilities.

OBLIGATIONS TO BE SECURED BY UNIVERSAL SERVICE CONDITIONS

92  Clause 50 provides that the Secretary of State shall publish a notice ("a universal service notice") setting out the extent to which electronic communications networks and services, facilities capable of being made available as part of or in connection with any electronic communications service, directories and directory enquiry facilities, must, for the purpose of securing compliance with Community obligations, be provided, made available or supplied throughout the UK. Clause 52 provides that OFCOM may set such universal service conditions, as they consider appropriate for securing compliance with the obligations set out in the universal service notice.

June 2002



 
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