Memorandum submitted by Microsoft
We very much appreciate the Committee's offer
to consider specific drafting suggestions relating to Microsoft
Ltd's comments of 6 June 2002 on the draft Bill. As I emphasised
in my testimony before the Committee, it is not our intention
to tell the Committee how to draft legislation, and there may
certainly be many ways to incorporate the general comments that
we provided on the content of the draft Bill. However, I do hope
the attached, more concrete, suggestions are useful. We of course
would be pleased to discuss any of these issues at your convenience.
Our specific suggestions on our general points of comment follow.
Microsoft supports the Government's stated intention,
continued from the earlier Communications White Paper, to continue
with the current policy on voluntary Internet regulation. We believe
the draft Bill could more clearly advance this policy with the
following suggested changes (in order of these sections' appearance
in the Bill).
Section 18, Functions of the Content Board
We would recommend deleting the words "or
otherwise transmitted by means of electronic communications networks"
from Section 18(2)(a) of the draft Bill. It may also be advisable
to replace those words with the words "by means of the electronic
media" to bring the concept in line with its intent as we
Section 22, Definition of "Electronic Communications
We would suggest adding at the end of the current
definition the words "and except insofar as it is an information
society service" to bring this definition more closely in
line with the same definition in the Framework Directive. The
drafters may wish to reference Directive 98/34/EC as the source
of the definition of "information society service" for
the sake of clarity, but we do not view this as essential. Alternatively,
this exemption could be included in the definition of a "content
service" in Section 22(7).
Sections 154-155, Meaning of "Television
Licensable Content Service"
This definition could be narrowed by replacing
"by means of an electronic communications network" with
"by means of the electronic media" in Section 154(1)(b).
Alternatively, it could be clarified that video streaming and
other transmission of video content via the Internet or similar
networks falls within the exception for a "two-way service"
in Sections 155(3) and 155(4). This likely could be accomplished
by deleting clause (b) of Section 155(4), but our views on this
point would benefit by more specific discussion with the drafters.
Section 17, OFCOM's Content Board
We have commented that it would be useful for
OFCOM to be required to consult with the Secretary of State, and
for the Secretary of State in turn to consult with the industry,
prior to any expansion of OFCOM's content regulation remit. Such
an obligation could be added as a new Section 17(13). Such a new
section could read as follows (although it could be drafted in
several ways): "Before expanding the duties of the Content
Board to other media or electronic communications networks, OFCOM
must consult the Secretary of State, who must in turn open a public
consultation on OFCOM's proposal".
Here, we are concerned that two definitions
in the Bill extend beyond the terms of the directives in a manner
that could extend regulation to the Internet as the Bill clearly
does not intend. This concern could be met with the following
Section 22(1), Definition of "Electronic
The term "software and stored data"
could be taken from the definition by deleting Section 22(1)(b)(iii).
Section 22(3), Definition of "Associated
The term "available for use" in clause
(a) should be changed to "is used", and the term "is
so available" in clause (b) should be changed to "is
used". We also believe that the concept of "other services"
in clauses (ii) and (iii) of Section 22(3) should be deleted from
the definition because it expands the concept of associated facilities
beyond that encompassed within the Framework Directive, but again
would be pleased to discuss this matter with the drafters. If
this change is made, clause (b) could simply be amended to read
"is used for the purpose of making the provision of that
network or service possible".
We have suggested that OFCOM ought to strive
for new levels of transparency and accountability as hallmarks
of the newly converged regulatory framework to be created by the
draft Bill. These principles are, of course, included in a general
way in Section 3(2)(a), but we would suggest that the importance
of these principles to reasoned decision-making would justify
further emphasis in a separate section.
Section 3, General Duties of OFCOM
We would add a new subsection to Section 3 (perhaps
before the current subsection 7) that would state something akin
to the following: "OFCOM's general duties of transparency
and accountability under subsection (2)(a) require that (i) all
decisions made by OFCOM on matters required in this Act or presented
to it must be rendered in writing (or, if verbal, summarised in
writing) within a reasonable time after such decisions are made;
(ii) all meetings of OFCOM and its subsidiary bodies at which
decisions will be taken shall be open to the public, except where
law requires such meetings to be taken in closed session; and
(iii) appropriate consultation with the public and the industry
be required on significant decisions to be taken by OFCOM and
its subsidiary bodies, including all matters relating to the remit
of OFCOM or such subsidiary bodies."
We believe, as do most participants in the industry,
that broadband take-up has been disappointing. To be sure, there
are marketplace measures to be taken, and Microsoft is committed
to taking those measures. It may also be helpful, however, for
OFCOM to have as part of its remit a duty to (1) encourage the
development of new communications technologies, such as broadband,
and (2) aggressively monitor and encourage local loop unbundling
as one of several paths toward increased broadband availability.
We agree with INTELLECT that attempting to define "broadband"
would be counterproductive because technology continues to develop.
Yet, it would be possible to include in OFCOM's remit a goal of
encouraging technological development.
Section 3, General Duties of OFCOM
The rollout of broadband and other new technologies
could be encouraged by the inclusion of a new subsection, optimally
located after current subsection (c), which could state: "to
encourage the provision of new technologies and services to the
public for the better and more efficient development of electronic
communications networks and services".
Section 4, Duties for the Purpose of Fulfilling
Local loop unbundling, which is important to
the rollout of broadband, is required by Regulation (EC) No 2887/2000
on unbundled access to the local loop (18 December 2000). Accordingly,
it may be appropriate to reference that obligation in Section
4, perhaps by including as part of subsection (11) that "in
this section"securing efficiency and sustainable competition"
shall include prompt and effective enforcement of Community regulations
fostering competition in electronic communications networks, including
Regulation (EC) No 2887/2000". Of course, this goal could
be expressed in many different ways.
Thank you again for the opportunity to provide
these more specific suggestions to you. We would be pleased to
meet with you to explain them or work through alternative language
formulations if you wish.