Telecoms | UK Regulatory Outlook January 2023

Ofcom launches enforcement programme on telecoms price rises

In December 2022, following consumer complaints and concerns, Ofcom launched an industry-wide enforcement programme into whether in-contract price rises are set out clearly enough by telecoms companies before customers sign up.

The regulator's objectives for this programme are:

• to understand whether and how consumers were made aware of price variation terms and their effect at the time they entered into the contract, between 1 March 2021 and 16 June 2022; and
• to examine whether this raises issues under the relevant General Conditions to determine whether any further enforcement action is required.

Having updated its rules and guidance in June 2022, the programme will take into account the regulatory requirements which were in force from May 2021, including the requirement for providers to give customers at least one month’s notice of contractual modifications likely to be of material detriment and a right to exit the contract without penalty. These requirements did not apply to price variation terms, provided that when the customer entered into the contract those terms were sufficiently prominent and transparent, such that the customer could be said to have agreed to such terms. If this was not the case, the requirements in the relevant General Conditions (C.1.14) would apply.

Ofcom will gather information and engage with providers as part of the programme and the regulator encourages all providers to review the steps they took to ensure that price variation terms were prominent and transparent to customers.

Ofcom will provide updates as the enforcement programme progresses.

Ofcom proposed 'Plan of Work' published

Ofcom has published its proposed "Plan of Work" for 2023/24 setting out the areas of focus for the next financial year. As the regulator looks forward, it acknowledges that its remit is expanding, as it takes on new duties for telecoms security, video-sharing platforms and online safety.

One of the regulator's main priorities is to support the UK government's commitment to a secure and resilient telecoms infrastructure. Under the new Telecoms Security Act, Ofcom has been given powers to monitor and enforce security requirements in the telecoms sector to help ensure networks are designed with security in mind.

Another main aim for Ofcom is to further the interests of telecoms consumers. The UK government has confirmed a commitment to safeguarding the interests of customers. Ofcom supports this commitment and will continue to ensure that consumers are protected and treated fairly.

Ofcom welcomes responses to the proposed plan by 5pm on 8 February 2023 and aims to publish its final plan in March 2023.

Telecoms networks and security providers to implement new security measures by 2024

The Electronic Communications (Security Measures) Regulations 2022 and the Telecommunications Security Code of Practice are now in force.

The Code of Practice was issued and published pursuant to sections 105E and 105F of the Communications Act 2003 (as amended by the Telecommunications (Security) Act 2021). The Code of Practice came into force at the time of its publication, on 1 December 2022, in accordance with section 105F(6) of the Act.

The Code of Practice sets out what good telecoms security looks like, contains guidance on how telecoms providers can comply with the regulations, explains key principles and provides technical guidance on the measures that can be taken to demonstrate compliance with the legal obligations under the Telecoms Security Act and the regulations. The guidance uses a three-tier system based on a telecoms provider's annual relevant turnover to highlight how the regulations will apply to providers of different sizes. "Tier 1" telecoms providers will now be expected to implement the most straightforward and least resource intensive measures (for example, maintaining accurate records of all externally-facing systems) by 31 March 2024.

Ofcom also conducted its own consultation on new guidance for telecoms providers following the introduction of the Telecoms Security Act, which it is yet to publish. Ofcom's duties under the Act came into force on 1 October 2022. The regulator is responsible for ensuring that telecoms providers comply with the new rules to safeguard the security and resilience of the UK's communications networks against cyber attacks.

Failure to comply with the regulations could result in fines of up to 10% of their annual turnover or £100,000 per day for ongoing breaches. Further information on how Ofcom will use its power and regulate this framework will be contained within its proposed guidance.

Ofcom digital markets review

2023 is going to continue to see a focus on four core digital markets identified by Ofcom as requiring further review and consideration of whether the current legislative framework continues to be fit for the modern age.

In the communications sector, the internet now underpins our digital lives and is not only supporting traditional means of communication but has also provide the opportunity for innovation; alternative digital services have evolved as a result.  Ofcom is therefore shifting its focus, as digital markets have become integral in communications, Ofcom is considering them alongside traditional telecoms.

The four digital markets that Ofcom is reviewing are cloud services, net neutrality, digital content gateways and online personal communications services. The cloud services call for inputs and net neutrality consultation were launched in autumn 2022 and we can expect to see the Ofcom responses by autumn 2023.  The latter two consultations are due to be launched in spring 2023.  These two digital markets are perhaps more clearly looking at the alternatives to traditional communications services and it will be interesting to see what the scope of Ofcom's recommendations will be.

It will also be interesting to see the impact on the Digital Markets Act and the European Electronic Communications Code of the consultations to be launched this year (and vice versa).

Ofcom's space strategy for 2023/2024

In November 2022, Ofcom published its updated space strategy and work plan of activities within this area for the next year.

With an increase in the use and range of services provided via satellite, such as broadband, and an increase in benefit and use cases being made available to people, businesses and public sector users in the UK, there is increased interest in this area (including in the challenges that may arise as a result).

Ofcom's priorities within the UK during 2023 and 2024 cover a subset of activities that enable new and improved satellite services while developing its capabilities to deal with cases of harmful interference arising from the rapid deployment of NGSO (neo-geostationary) systems:

• Enabling the use of satellite communication systems which could bring higher speed services to users on aircraft, ships, and remote locations in the UK, specifically through proposals to expand the spectrum bands used for these purposes.
• Managing the risks to other users. Ofcom plans to focus on two aspects to provide it with additional levers and capabilities for dealing with the risk of harmful interference from NGSO satellite systems to other UK spectrum users by proposing new conditions on NGSO satellite downlinks providing added enforcement options and development of NGSO satellite monitoring capabilities, enabling Ofcom to effectively investigate cases of possible harmful interference to UK spectrum users and development of its communications to stakeholders about its approach to investigation and enforcement.
• Considering the implications of satellite communications directly with mobile handsets and "short range" devices, including whether any additional national or international regulatory measures are beneficial or necessary to enable further development.

Key dates for diary