Joint Committee on The Draft Communications Bill Appendices to the Minutes of Evidence


APPENDIX 76

Memorandum submitted by Communications for Business (CfB)

SUMMARY

  1.  CfB would like to see greater clarity of both definition of the "consumer" and the "provider", throughout the Draft Bill.

  2.  CfB believes that the duties of the Consumer panel should include monitoring the effectiveness of the new regulator.

  3.  CfB believes the Consumer Panel should be able to advise OFCOM on whether its remit continues to be sufficient.

  4.  On the scope of the Panel, CfB believes that its remit should be at least as wide as the remit of OFCOM.

  5.  CfB would like to see the Consumer Panel empowered to advise OFCOM on the consumer implications of policy affecting content.

  6.  CfB believes that appointments to the Consumer Panel should be made by the relevant Secretary of State.

  7.  CfB would like the Consumer Panel to have the power and resources to establish appropriate consumer committees.

  8.  CfB believes that there is sufficient commonality of interests between smaller enterprises with up to five employees and residential consumers for their interests to be represented by the Consumer Panel.

  9.  CfB is considering the merits of recommending a separate OFCOM Consumer Panel for small business users with six to 50 employees.

DETAIL

  1.  Communications for Business (CfB) is one of the six Advisory Committees on Telecommunications (ACTs) established under the Telecommunications Act 1984. CfB advises the Director General of Oftel and represents the interests of small businesses.

  2.  On 12 February 2002 the EU published a report reviewing how each EU member state is implementing the Small Firms Charter and Nigel Griffiths MP, the Minister for Small Business, commented that it "puts the spotlight back on small firms, recognising their central role in economic activity in the European Union".[87] More recently he confirmed the importance of small businesses to the UK and EU and their economies:

    "We all know the key role small firms play in creating jobs and driving economic reform—the 3.7 million SME's in the UK employ 12 million people and contribute £1 trillion per year to our economy. In Europe, a massive 65 million people depend on this thriving sector for employment."

    "The potential collective force of this sector in wealth creation, innovation and economic development is second to none and only promises more as the EU enlarges".[88]

  3.  Clearly the small business sector is highly significant for "UK plc". In turn, the Draft Communications Bill is significant for the small business sector—numerically small firms make up a large proportion of both users of communications services and networks; increasingly they are providers. CfB will respond to the DTI/DCMS formal consultation invitation but wishes its preliminary views to be known to the Joint Scrutiny Committee.

  4.  For some time CfB has argued the necessity of consumer impact statements to help consumers to respond of Oftel's consultations. Impact statements that identify the issues for consumer, small businesses and otherwise, go part way to helping them formulate their responses—particularly when the issues are complex and public consultation is frequent. For these reasons we welcome the Regulatory Impact Assessment (RIA) published with the Draft Bill.

  5.  Clause 3 of the Draft Bill proposes that OFCOM will have a duty to further the interests of "persons who are customers for services and facilities", ie users. We note that the word "consumer" only appears in the Draft Bill in the context of the Consumer Panel. "Persons who are customers" is far too narrow. It does not take account of other users and seems to imply only persons who have a contractual or pre-contractual relationship with a service provider and to exclude other users, for example, employees or other members of a household. Relevant "persons" should be defined as widely as possible, ie everyone in society in their role as a buyer or potential buyer and user or potential user of services. There are a number of related terms used in the Draft Bill, such as "citizens" (Clause 4(5)), "members of the public" (Clause 12 (1)(a) and (b)), "end users" (Clause 38(1)(a)). Their relationship to "persons who are customers" is unclear.

  6.  Clause 96(1)(a) refers to "communications providers"—persons who provide an electronic communications network or service. This term may be intended to encompass BT and other large companies but it is not clear whether it covers, for example, a myriad of small businesses that could be defined as providers of such services.

  7.  CfB would urge greater clarity of both definition of the "consumer" and the "provider" to ensure that small businesses are aware of their rights and responsibilities as users of communications services and when they have regulatory obligations as providers.


  8.  In Section 96(2) the Consumer Panel is set to advise OFCOM and "such other persons as the Panel think fit". CfB welcome this wide brief and would be opposed to attempts to narrow this to (essentially private) advice to OFCOM. CfB's working relationship with Oftel allows the committee to respond to DTI and other government consultations and to give views to other bodies, including the European Commission. This is beneficial for small consumers and Oftel.

  9.  We would welcome explicit clarification that the term "persons" in this context includes government departments, other official bodies and international organisations such as the European Commission—indeed all relevant bodies, both national and international.

  10.  Clause 96(3) lists the functions of the Consumer Panel in addition to giving advice to OFCOM. CfB believes that this should include monitoring the effectiveness of the new regulator in pursuing its duties as they affect small business and other consumers. The new legislation attempts to be "convergence proof"; if the need should arise the Consumer Panel should be able to advise OFCOM on whether its remit continues to be sufficient to regulate the changing communications sector.

  11.  On the scope of the Panel, we believe that its remit should be at least as wide as the remit of OFCOM in relation to delivery of electronic communications services. While it would not be appropriate for the Consumer Panel to deal with specific content matters, such as complaints about taste and decency or unfair treatment (issues for the Content Board), it should nevertheless be empowered to advise OFCOM on the consumer implications of policy affecting content, such as "walled gardens" and the objectivity of electronic programme guides.

  12.  Rather than OFCOM, we believe that appointments to the Consumer Panel, should be made by the relevant Secretary of State (SoS). This is essential to ensure a measure of independence form the regulator. The SoS should also take decisions on removal of members, should the need arise.

  13.  Clause 97 contains provisions for consumer representation for each of the four nations of the United Kingdom but does not prescribe how this should be put into practice. In contrast, the current Telecommunications Act (TAct) 1984 contains provisions for advisory bodies of this kind. We believe that there should be specific provision on the face of the Bill that permits the Panel to establish and adequately resource consumer committees for the regions/nations/other interest groups. This should include representation of small businesses.

  14.  Although there is reference to "small business customers" in Clause 96(2), there is no reference in Clause 97 to the interests of small businesses. We regard this as an omission (and retrograde in the light of the current provision in the TAct). CfB is considering its view but there may be merit in establishing a separate OFCOM panel for small businesses users with six to 50 employees. There is sufficient commonality of interests between smaller enterprises with up to five employees and residential consumers for their interests to be represented by the Consumer Panel. We note that this will require changes to definitions of consumers in sections of the Draft Bill. We also note that the new Telecoms Ombudsman will deal with disputes raised by these two groups with maximum awards (including costs) up to £5,000.

June 2002


87   Nigel Griffiths MP, DTI press release P/2002/083, 12 February 2002. Back

88   Nigel Griffiths MP, speech to the UK Federation of Small Business Annual Conference, Friday 22 March 2002. Back


 
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