Memorandum by BT Cellnet
(i) BT Cellnet, a wholly owned subsidiary of
British Telecommunications plc, is one of four mobile network
operators in the United Kingdom providing services using the GSM900
and/or GSM1800 standards. Additionally, Dolphin provides mobile
services to business users utilising spectrum in the TETRA frequency
range. BT Cellnet currently has in excess of seven million customers
and its digital network covers 99 per cent of the UK population
and 85 per cent of the UK land mass.
(ii) BT Cellnet is leading the field in
the development of mobile e-commerce and mobile Internet services.
In 1997 BT Cellnet, in association with Barclaycard, introduced
access to Barclaycard account information and Barclays Bank accounts
via a customised BT Cellnet mobile phone. Also in 1997, BT Cellnet
introduced its Genie service, the first Internet-based information
service with a strong focus on mobile value added services. Genie
has now developed into one of the 10 largest UK Internet Service
Providers and is expected to have one million portal subscribers
by this spring.
(iii) BT Cellnet is the first UK operator
to launch a commercial Mobile-Internet service using the Wireless
Application Protocol (WAP). Data transmission for mobile Internet
users is set to increase significantly this summer with the introduction
of BT Cellnet's General Packet Radio Service (GPRS) network. GPRS
enables "packets" of information to be transmitted between
computers at speeds up to 10 times faster than today. The development
of Universal Mobile Telecommunications System (UMTS) will provide
the means for interactive multimedia and video mobile services.
The UK auction for the UMTS licences is due to commence on 6 March
and services are expected to be launched around 2002.
(iv) Analysts expect that, by 2004, one
in three Europeans will access the Internet using mobile devices.
Accordingly, BT Cellnet expects that Internet transactions carried
out on mobile devices ("m-commerce") will constitute
a significant proportion of e-commerce, which is expected to account
1.6 trillion within the EU by 2004.
BT Cellnet's interest in the development of policy on e-commerce
is, therefore, clear.
1. What needs to be done to create confidence
and to stimulate e-commerce?
1.1 Building confidence in the efficacy of e-commerce
is widely and, in BT Cellnet's view, correctly regarded as essential
to its growth. Using the Internet, consumers are able to engage
in transactions not under human control, to buy from remote locations,
from suppliers they do not necessarily know. There is ample scope
for errors, flaws and fraud. In addition, well-documented scare
stories do not inspire faith in the process and hold back further
1.2 In order for the benefits of e-commerce to
be fully realised, industry, government and consumer groups need
to build up trust and promote consumer protection.
1.3 BT Cellnet therefore welcomes the draft
European Directive on e-commerce in the Internal Market.
The Directive seeks to promote the growth and competitiveness
of e-commerce by establishing an appropriate legal framework and
giving confidence to consumers and businesses alike.
1.4 BT Cellnet supports the "country
of origin" approach set out in Article 3 as the only practical
1.5 BT Cellnet welcomes the effect of Section
3 of the Directive, which governs the rules for electronic contracts
and would require Member States to ensure that their legislation
permits agreements to be concluded electronically.
1.6 Article 16 of the draft Directive would
require Member States and the Commission to encourage the drafting
and implementation of codes of practice which seek to ensure compliance
with other parts of the Directive. These include provisions governing
the information to be provided with commercial communications,
unsolicited commercial communications and the information to be
provided to parties to proposed contracts. The Commission would
examine draft national and Community wide codes. BT Cellnet would
welcome such codes but notes that Member States and the Commission
would be required merely to "encourage" their drafting
1.7 BT Cellnet welcomes Article 17 of the
draft Directive, which would require Member States to ensure that
appropriate out-of-court dispute resolution schemes are available.
1.8 Article 18 would require Member States
to ensure that interim measures are available to consumers to
remedy alleged infringements. BT Cellnet welcomes this and expects
that consumer groups would be able to take representative action.
1.9 These measures should build consumer
and business confidence, promoting the growth of e-commerce within
the EU. Nevertheless, e-commerce between consumers and businesses
which extends beyond the EU would not seem to be subject to these
1.10 In addition, BT Cellnet notes that,
in order to engage in e-commerce, consumers need access to money
transmission services. A sizeable minority of people in the UK
does not have access to such services and are therefore effectively
excluded from engaging in e-commerce.
2. Does the European Commission's draft Action
Plan "eEurope: An Information Society for All" offer
a realistic means of promoting e-commerce in the EU?
2.1 Chapter 3 of the document, entitled "Accelerating
e-commerce", notes that the US, with a similar sized economy
to that of Europe's, enjoys e-commerce revenues more than three
times European levels. It argues that there is a need for a reliable
Internal Market legal framework to deliver legal security, remove
barriers to cross-border services and build trust. Five targets
are set for the end of this year:
the implementation of e-commerce
changes to EU rules to permit public
procurement procedures and transactions to be carried out electronically.
Member States are to be encouraged to do likewise;
Member States and the Commission
to encourage online dispute resolution and other consumer redress
Member States and the Commission
to provide support to SMEs to "go digital"; and
the Commission to support the creation
of a ".eu" top level domain to encourage cross-bordere-commerce
and assist those companies wishing to establish an EU-wide Internet
An essential part of the package of measures
to encourage and accelerate e-commerce within the Community needs
to be EU-wide protection against "cyber-squatting",
ie rules need to be established such that the owner of a brand
has the rights to the domain name in that brand. As an example
BT Cellnet, as owner of the "BT Cellnet" brand should
have a legal right to use the domain name "www.BTCellnet.eu".
There has been a number of cases in the UK where well-known companies,
including BT Cellnet, have had to take legal proceedings in order
to protect the use of their name.
2.2 BT Cellnet agrees with the Commission's
analysis of how e-commerce might be promoted. Whether the challenging
targets and deadlines set out in the document can be met remains
to be seen.
2.3 At present, as noted above, a sizeable
minority of the UK population does not have access to money transmission
services and would therefore seem to be effectively excluded from
engaging in e-commerce. Chapter 5 of eEurope: An Information
Society for All, "Smart cards for secure electronic access",
proposes the development of common specifications for a generalised
smart card infrastructure. It is envisaged that such smart cards
would provide all citizens with access to electronic payment methods
and other uses. BT Cellnet welcomes this development.
3. Will codes of conduct and co-regulation
provide sufficient protection? Is there a case for intervention
by national governments and the EU?
3.1 BT Cellnet believes that self-regulation,
generally, and out-of-court dispute resolution mechanisms, as
described in Article 17 of the draft Directive, in particular,
would be appropriate for the majority of disagreements. BT Cellnet
that the Commission is seeking to establish an EU-wide clearing
house to direct complaints to appropriate national bodies which,
it is intended, will all operate an accepted dispute resolution
mechanism. The Commission is reportedly co-ordinating its efforts
with the US Federal Trade Commission, which is considering a similar
scheme. It is envisaged that dispute resolution might ultimately
be carried out online. BT Cellnet welcomes these developments.
3.2 Consumers should not enjoy worse protection
for online transactions than they do for equivalent conventional
transactions. Accordingly, a right to bring proceedings should
be retained for online transactions, where such a right existed
before. However, bringing proceedings in one Member State may,
in practice, prove to be uneconomic and impractical for consumers
in another Member State. In its White Paper
last summer, the UK Government proposed to seek agreement with
other Member States on proportionate and effective action in such
circumstances. BT Cellnet looks forward to closer co-operation
in this area.
3.3 In addition, BT Cellnet believes that
deceit, fraud and other malpractice cannot be left to self-regulation.
Cross-border co-operation between enforcement authorities is necessary,
and enforcement authorities must have the appropriate supervisory
and investigatory powers. Article 19 of the draft Directive seeks
to establish such a framework.
4. Do the institutions of national governments,
on the one hand, and the European Commission, the Council of Ministers
and the European Parliament, on the other, function with sufficient
flexibility and coherence to promote the EU's objectives in the
field of e-commerce?
4.1 There are a number of different groups
with an interest in the development of policy in this area. The
European authorities need to ensure that reasonable efforts are
made to consult with all such parties in the interests of openness
and transparency and also to ensure the application of similar
principles in converging industries.
4.2 A reasonable minimum period of responses
to consultation documents of eight weeks should be granted.
5. Should existing EU institutions' internal
structures be changed or new ones created, to improve policy development
5.1 No comment.
6. How can structural change be brought about
fast enough to accommodate to the growth of e-commerce?
6.1 No comment.
24 February 2000
3 www.forrester.com. Back
Amended proposal for a European Parliament and Council Directive
on certain legal aspects of electronic commerce in the Internal
Market, September 1999. Back
http://news.ft.com/news/industries/infotechnology, as at
22 February 2000. Back
Modem Markets: Confident Consumers, July 1999. Back