Memorandum submitted by the Communication
Workers Union (CWU)|
1. The Communication Workers Union (CWU)
is the largest communications trade union in the UK, representing
approaching 300,000 members in the postal, telecommunications
and financial services industries. We represent the overwhelming
majority of staff in BT and O2 and have members in other telecommunications
companies like ntl and Telewest.
2. The main thrust of the draft Communications
Bill is to bring together into one regulator OFCOM the previously
separate regulation of telecommunications and broadcasting. We
strongly support this central objective. Indeed we called publicly
for the creation of OFCOM fully five years ago when we published
a policy booklet entitled ``Tomorrow's Telecommunications"
in April 1997.
3. Our reservationsand the subject
matter of this evidenceconcern three related issues:
We believe that OFCOM should be more
accountable to Government and Parliament principally through the
issue of an annual government policy framework within which OFCOM
We believe that OFCOM should have
an active role in the promotion of broadband Britain and that
this should be explicit in the proposed Government policy guidelines.
We believe that OFCOM should be promoting
a highly trained UK communications workforce based on secure,
motivated and rewarded staff.
OFCOM AND PARLIAMENT
4. Over the past two decades, the UK has
evolved a model of so-called independent regulation whereby a
regulator appointed by Government with powers granted by Parliament
effectively determines who can provide which services on which
terms. The current draft of the Communications Bill embraces this
model in respect of the proposed OFCOM.
5. The CWU's experience of such a regulatory
model has been particularly with Oftel with which we have inter-faced
for 18 years. However, we have also observed closely the operations
of other regulators for such services as gas, water and electricity.
It is our firm beliefsupported, we believe, by many politicians
and consumersthat independent regulation has become too
independent of both Government and Parliament. Therefore we believe
that the proposed OFCOM model needs revision.
6. Our concerns about the current model
of independent regulation have been highlighted most recently
by the activities of one of the UK's newest regulators, Postcomm.
Early this year, Postcomm published proposals for liberalisation
of the UK postal market in a form that was never envisaged by
either Government or Parliamentnamely the licensing of
bulk mailers instead of the reduction of the price/weight thresholdand
proposed a timetable that was never contemplated by either Government
or Parliamentnamely full liberalisation three years before
the EU requirement. This approach was so contrary to the views
of so many politicians that at least 130 MPs signed at least one
of several Early Day Motions protesting and the Secretary of State
for Trade & Industry reportedly felt obliged to write to the
regulator urging a rethink.
7. In our view, regulators should be the
instrument of policy and not the determinant of it. Policy should
be decided by the elected Government of the day which in turn
should be accountable to the Parliament of the day. Such guidance
should have statutory authority. The present Government took a
hesitant step in this direction with the Green and White Papers
on the Regulation of the Utilities as well as the Utilities and
the Postal Services Acts. This means that certain regulators are
now issued with guidance on social and environmental objectives,
but this guidance does not address the broad policy priorities
to be followed by the regulator in question which we are convinced
is essential if regulation is to become more accountable.
8. As regards the communications industry,
our proposal would mean the Government issuingpreferably
each year, but certainly each Parliamenta formal policy
statement on how it would like to see the industry contributing
to the Government's broad economic, social and political aims.
It would then be for OFCOM to operate within the terms of that
policy as regards its activities and to explain in its own annual
report how it has taken account of, and given effect to, the proposed
9. A new clause to this effect should be
included in the draft Communications Bill.
10. So much for the accountability of OFCOM
to Parliament via the Government. What about the accountability
direct to Parliament? Superficially it is there in abundance.
Paragraph A38 of the Regulatory Impact Assessment on the Bill
pointed out that "OFCOM will be audited by the National Audit
Office and kept under review by the Public Accounts Committee,
as well as the Select Committees on Trade and Industry and Culture,
Media and Sport".
11. But essentially this is no different
from the current arrangements in respect of regulators like Oftel
or Postcomm. By spreading the accountability so thinly between
so many bodies which are examining so many other regulators and
so many other subjects, effectively one is diluting the accountability
to little more than a facade. A much clearer structure is necessary
which lays out exactly what is required of OFCOM and the time
limits within which it must operate.
12. There should be a dedicated Select Committee
to monitor the work of OFCOM and perhaps the other major regulators.
OFCOM AND BROADBAND
13. Government has some clear policies as
regards the communications infrastructures of the UK:
To make the UK the best and safest
environment in the world for e-commerce by 2002.
To ensure that everyone who wants
it has access to the Internet by 2005.
To make all Government services available
electronically by 2005.
To make the UK the most extensive
and competitive broadband market in the G7 by 2005.
14. In our view, OFCOM should be an active
player in promoting these policies, no more so than in relation
to the development of broadband Britain. Broadband changes the
experience of Internet usage through the always-on and faster
connection to richer and more variegated services.
15. For the individual customer, it means
much faster loading of web pages and access to more sophisticated
services. It means that the user is likely to spend more time
on line and make more use of interactive and commercial services.
Also it means the ability to access services which require greater
bandwidth like video on demand or video-conferencing. Finally
it makes running a business from home a much more practicable
and effective proposition.
16. For the nation, it means a high-tech
infrastructure than will enable us to locate worthwhile jobs anywhere
in the country, since the information superhighway does not require
special access to power or physical resources or need road or
rail links. It means the ability to attract international investment
and compete effectively with other modern economies. One recent
study has suggested that success in the new technologies could
increase the UK's non-inflationary rate of growth from 2.5 per
cent to 3.5 per cent by 2005.
17. The objectives are clear, but our ability
to reach them is much less so. In our view, the simplistic reliance
on competitionand specifically the faith in local loop
unbundling (LLU)to deliver broadband Britain has been shown
to be a failure.
18. The Broadband Stakeholder Group (BSG)
report of November 2001 argues that:
Based on its extensiveness index,
which combines coverage and addressable market into a single index
for each country, the UK is currently ranked 5th in the G7 (ahead
of France and Italy).
Based on its competitiveness index,
which combines regulation, choice and price into a single index
for each country, the UK is currently ranked in 4th place in the
G7 (ahead of France, Italy and Germany).
19. Therefore OFCOM needs to promote broadband
in a whole variety of ways which move beyond Oftel's ideological
and na-ve faith in the competitive model.
20. It would not be appropriate to refer
directly and specifically to broadband Britain in the actual Bill.
The term ``broadband'' has no precise definition and indeed it
will be an evolving concept as envisaged by the Broadband Stakeholder
21. In its report to Government in November
2001 the Group suggests that:
Broadband should not be defined in
terms of particular bit rates but in terms of delivery of services
to the end user.
Broadband should be defined in terms
which are technology neutral and represent access to progressively
22. Consequently the Group offers the following
definition of broadband: "Always on access, at work, at home
or on the move provided by a range of fixed line, wireless and
satellite technologies to progressively higher bandwidths capable
of supporting genuinely new and innovative interactive content,
applications and services and the delivery of enhanced public
23. The annual policy statement from Government,
referred to earlier, should spell out the Government's broadband
objectives and how OFCOM is expected to contribute to them.
24. The draft bill should be amended to
include within the remit of OFCOM, the responsibility for ensuring
the success of the Broadband agenda.
OFCOM AND THE
25. As a trade union for communications
workers, the CWU understandably has a special concern for employment
issues. We want to see the maximum sustainable employment in the
industry, with secure and quality jobs based on fair terms and
conditions and with the best training and development. This in
part is why we support so enthusiastically the promotion of Broadband
Britain. In turn, Britain will not develop a modern communications
infrastructure as rapidly and successfully as its international
competitors unless it has a well-trained and motivated workforce.
26. In their introduction to "The Draft
Communications BillThe Policy", the Secretaries of
State for Trade & Industry and for Culture, Media & Sports
state that the proposed changes in the regulatory regime "will
be the right conditions for effective competition, increased investment
and high levels of employment".
27. Therefore it is both surprising and
disappointing that the draft Billspecifically in Clause
3 (1) of the general duties of OFCOMmakes no requirements
of the regulator in respect of employment issues. In describing
the duties of OFCOM, there is reference to customers and to competition
and freedom of expression, but not a word about the hundreds of
thousands of people who work for telecommunications and broadcasting
enterprises. When Clause (2) spells out the matters to which OFCOM
should have regard in performing its duties, it mentions children,
the disabled, the elderly, those on low incomes, those living
in rural and urban areas, and persons in different parts of the
UK, but it says nothing about those who workor wish to
workin the communications industries.
28. Clause 3 (1) should be amended to make
it a duty of OFCOM to promote secure employment and Clause 3(2)
should be amended to require OFCOM to have regard to the employment
consequences of the performance of its duties.
29. The only Clause in the current draft
of the Bill to make specific reference to employment is Clause
11. This talks of the promotion of training & retraining,
of equality of opportunity and of fair treatment of disabled persons.
This is all welcome, but the Clause is entitled "Functions
relating to employment in broadcasting" and sub-clauses (1),
(2) and (3) refer specifically and exclusively to "employment
by those providing television and radio services".
30. Clause 11 should be amended to refer
to all those providing services covered by the ambit of OFCOM.