Memorandum submitted by The Internet Services
Providers Association (ISPA UK)
ISPA welcomes this opportunity to comment on
the draft Communications Bill to the Joint Scrutiny Committee.
We welcome the Government's attempt to streamline the myriad of
regimes that affect the communications sector. However, we do
have some particular concerns which are addressed herein under
the four headings "Content Regulation"; "Procedures
of OFCOM"; "Access"; and "Notifications &
The Communications Bill's approach to content
regulation is broadly welcomed by the Internet industry. The Government
states in the policy narrative that "it is not the intention
for the draft Bill to extend regulation into the Internet"
(policy narrative section 18.104.22.168); a position which remains unchanged
from the White Paper. It is worth noting however, that it is incorrect
to assume that Internet content is currently unregulated: the
online world is of course already subject to the laws of the offline
Clarification of meanings and definitions
The definitions in Sections 154 to 155, meaning
of "television licensable content service" and Services
that are not television licensable content services, are not sufficiently
clear to ensure that Internet content does not fall under the
former definition. We would urge the Government to refine this
definition as well as others appearing in these Sections, including
"electronic visual programme guide", "relevant
ancillary service", "two way service" and, in Section
238, "general public" and "broadcasting or distribution".
It is possible at present to interpret the definitions
in such a way that even the most simple Internet content, such
as web pages, plain tv listings or hyperlinks could be covered.
There is even the potential for the basic hosting of third party
content to be covered, under Section 238.5 "distribution".
We understand the desire for the Bill to remain as technology
neutral as possible, but it must also be clear in its intent.
We are also concerned that the draft Bill assumes
an out-of-date definition of "broadcasting". In particular,
it appears to assume that producers of content also have responsibility
for its distribution. There should be an understanding that while
the content of "web casting" can be equivalent to broadcasting
in its form (ie simultaneous, single point to multi-point transmission),
it differs from television broadcasting with respect to the editorial
control. That is, the means of transmission is operated by a third
party and not the broadcaster.
Discretionary powers of the Secretary of State
(ss 156): modification of ss. 154 and 155
We believe there should be a duty placed on
the Secretary of State to consult with OFCOM, and for OFCOM to
formally consult with industry before modifications to these provisions
are considered. This is an area of fundamental importance to the
Function of Content Board
We believe it would be inappropriate, as well
as impractical, for the Content Board's remit to extend to Internet
content. It would also conflict with the Government's commitment
regarding Internet content in the policy narrative. We appreciate
that Section 18 "Functions of the Content Board" states
that the Content Board's remit will cover anything "published
by being distributed by means of any electronic communications
network to members of the general public or of any section of
the general public" as defined in Section 238 (ie "available
for reception by members of the general public"). However
we believe an explicit sub-Section exempting the Internet would
be a useful clarifier. It should, furthermore, be recognised that
there is a significant "grey area" between on demand
and broadcasting services which risks creating legal uncertainty
for both ISPs and broadcasters. This will be particularly problematic
with respect to the regulation of interactive television where
viewers can switch between broadcast content and e-commerce services.
Such complexities of today's media will require OFCOM's particularly
For this reason, we suggest that the Bill stipulates
that the membership of the Content Board includes representatives
of all industry sectors covered by its remit and, as such, it
should be revised in line with any revision of the definition
of "television licensable content service" in section
Liability for Third Party Content
The draft Bill does not contain any cross-reference
to the e-Commerce Regulations, which transpose the European e-Commerce
Directive, in particular the liability provisions for intermediaries.
Given that the e-Commerce Directive explicitly absolves intermediaries
of all liability for the transmission, caching or hosting of third
party content (provided certain conditions are met), we would
expect the draft Bill to maintain explicit consistency with the
Directive and the UK Regulations.
Promotion of Media Literacy
We endorse OFCOM's proposed role to raise awareness
and use of consumer tools, including filtering and rating systems,
to enable consumers to manage their own Internet experience. A
particular example of would be the ICRA self-rating and filtering
system, which is receiving wide-scale international support from
stakeholder groups. We are concerned, however, that in the draft
Bill no guidance has been given as regards allocation of costs
for development and deployment of such systems. We believe it
would be inappropriate for OFCOM, in promoting awareness of such
tools generally, to promote or even require their provision, but
not contribute financially to their deployment or development.
Lessons to be learnt from Oftel
There has been some concern over delays in decision
making by the current Telecommunications regulator, Oftel, which
has been felt to hamper effective competition and innovation in
the market. The speed of decision-making by OFCOM must reflect
the speed of commercial decision-making in the communications
industry. There is a need for a "service level agreement"
between OFCOM and industry to this effect. Decision-making on
the part of OFCOM also needs to be transparent to industry players.
To provide effective and timely regulation,
OFCOM must be equipped with experienced and knowledgeable staff.
Oftel has suffered from a high turnover of staff, which affects
both the speed, and consistency of decision-making and the general
level of industry and technological knowledge of the regulator.
We would therefore urge that payment of employees at OFCOM should
not be rigidly tied to civil service pay scales and allow OFCOM
the discretion accorded to other regulators such as the ITC.
Interaction of OFCOM with other bodies and agencies
Given that the draft Bill awards OFCOM concurrent
powers with the OFT under the Competition Act, we would urge that
there be greater clarity as to how OFCOM and the OFT will interact
regarding competition issues.
We would also emphasise the need for greater
clarity as to how OFCOM will interact with bodies with a self
or co regulatory mandate in this area, such as the IWF, ICSTIS,
and the Telecoms Ombudsman, with a recognition that cumulative
costs of maintaining these bodies, along with the new notification
costs imposed on ISPs under the draft Bill, have the potential
to significantly increase the cost of doing business in the sector.
We believe that issues concerning access to
services and networks by operators should be addressed in such
a way that effectively promotes competition within all relevant
sectors and is in accordance with the EU Communications Framework.
In particular, access costs and conditions should be cost orientated,
transparent and non-discriminatory since competition at this level
will continue to be key for the competitive provision of down
stream services such as Internet services.
General Conditions of Entitlement
Whilst the authorisation scheme suggested in
place of the existing telecommunications licensing requirements
is permissible within the scope of the EU Communications Framework,
it is nonetheless key that the burden of such a regime is kept
to the minimum to be in line with the Government's policy of de-regulating
We will be responding separately to Oftel's
consultation on "The General Conditions of Entitlement".
Clarification of OFCOM funding model
We believe that funding of the regulator by
the communications industry should be in proportion to the division
of work between the sectors covered. No one sector should be placed
under a disproportionate financial burden. For example, the cost
of regulating Conditional Access Services (CAS) expenses should
be met by the contributions made by broadcasters, particularly
Multiplex licence holders.
Within each sector, there should be a fair balance
between the charges imposed on large and small players, with a
minimum threshold of turnover set, below which there should be
no imposition of charges. We feel this is essential to ensure
that notification charges do not act as a barrier to market entry
for small businesses.
General Costs to the Internet industry
Efforts should be made to ensure that costs
incurred by the industry in the form of notifications, funding
for the telecoms Ombudsman scheme etc are not prohibitive to new
market entrants nor innovations in technology.
There should also be recognition that costs
incurred under the draft Communications Bill, along with those
incurred by the industry under RIPA and the ATCS Act, may represent
a significant increase in the cost of doing business in the communications
In conclusion, we welcome the Communications
Bill and the Government's intention to provide a modern, converged
regulator for an innovative and evolving communications industry.
If the above issues are satisfactorily addressed during the consultation,
we believe the Communications Act will deliver significant benefits
for industry and consumers alike.