The general authorisation regime under the Act does not make a distinction between fixed, mobile and satellite networks and services. All electronic communications networks (ECNs), electronic communication services (ECSs) and associated facilities (AFs), fall under the scope of the Act, irrespective of the means of transmission. Moreover, under the general authorisation regime there is no requirement for specific licensing of ECNs, ECSs and AFs.
The broad definition of ECN to include any transmission system for the conveyance of signals between a transmitter, a medium and a receiver, by use of electrical, magnetic or electromagnetic energy, is in line with the EU’s overarching principle of technology neutrality. Equally widely defined, an ECS is a service that has as its principal feature the conveyance of signals by means of an ECN, excluding content services (the provision of material such as information or entertainment). Under the Act, an AF is a facility, element or service that is or may be used to enable the provision of an ECN or ECS or other services on that network or service, or supports the provision of such services.
ECNs or ECSs are able to provide networks or services to the public without the need for prior authorisation from Ofcom where they have complied with the General Conditions of Entitlement (the General Conditions). In more limited circumstances, the ECNs or ECSs may also need to comply with specific conditions. The General Conditions apply to ECNs irrespective of whether a provider owns or rents some or all of the network in question. The ECS will generally be the entity with a direct contractual relationship with the end user, or the reseller or other intermediary in the case of a wholesale provider. Ofcom provides further guidelines on which organisations will fall within these categories.
Entities using radio spectrum, such as mobile network operators or satellite service providers, will require the grant of a licence from Ofcom under the Wireless Telegraphy Act 2006 (the WTA). Each grant will detail the specific frequency, use, fees and duration of the licence. Some services, such as receive-only earth stations, may not fall within the scope of the WTA licence condition, but still require Ofcom to authorise any such use under a scheme of recognised spectrum access. Operators of set-top boxes that convert signals for viewing will also need an operating licence under the Broadcasting Act 1996. The usage of certain frequencies in the radio spectrum for short-range devices, such as alarms and radio frequency identification equipment, is exempt from the need to obtain licences.
Ofcom’s approach to spectrum award is to allow the market as much flexibility in how the spectrum is used without assigning it to a particular technology or application. While spectrum licences are most commonly awarded via auction, Ofcom is able to design these in such a way as to ensure that there is the greatest possible competition within the market. The UK’s mobile 4G network was auctioned by Ofcom in 2013, with a further 4G and 5G auction set to take place in late 2017 (see question 3).
There are currently 23 General Conditions in force, the majority of which must be complied with by all ECNs and ECSs. The remainder apply in more limited circumstances, such as for public pay telephones. The most recent iteration of the General Conditions was published on the Ofcom website on 28 May 2015. Under the Act, Ofcom has the power to amend or revoke any of the General Conditions as appropriate. In September 2017, Ofcom published a statement about changes to the General Conditions to take effect on 1 October 2018.
In the smaller number of cases where an ECN or ECS is subject to specific conditions, Ofcom will notify that provider of the fact that those conditions are to be imposed. A summary of the main types of specific condition is given below.
Universal service conditions
The basis for this condition is to ensure that everyone within the UK is afforded basic access to telephony. In the UK, the designated service providers are KCOM in the Hull area and BT for the rest of the UK. See question 6 for more detail.
In order to ensure end-to-end connectivity for end users through the interconnection of different networks, Ofcom may impose specific conditions relating to access on ECNs.
Privileged supplier conditions
Where a supplier has special or exclusive rights in relation to the provision of any non-communications service (services other than ECNs or ECSs) then Ofcom must ensure that the privileged supplier complies with specific accounting requirements under the Act.
Significant market power (SMP) conditions
An operator will have SMP if it is in such a position to act independently of its competitors and consumers or end users. See question 4 for more detail.
Licences issued by Ofcom under the WTA have varying durations depending on the type of licence granted. The mobile 3G licences granted in 2000 were subject to a fixed term of 20 years. Following the WTA (Directions to Ofcom) Order 2010, and subsequent consultation by Ofcom, mobile licences will continue for an indefinite period but be subject to annual renewal fees. ECNs and ECSs provided under the general authorisation regime are not subject to licensing requirements and therefore there is not set licence duration applicable to the provision of ECNs and ECSs.
Modification of licences
Although ECNs and ECSs will not be subject to any direct licence modification, under the Act Ofcom may impose changes to the General Conditions or specific conditions from time to time. The Act requires that Ofcom publish a notice, outlining the proposed changes and justifying its reasons for these, providing a period for proposals from those providers affected of not less than one month. Variations to SMP conditions are subject to additional requirements, including consultation with the European Commission and the EU independent advisory body for telecoms regulations, the Body of European Regulators in Electronic Communications (BEREC). Licences under the WTA may be varied by Ofcom providing written notice to the licence holder or publishing a general notice to all holder of a class of licence.
As a result of the passing of the Digital Economy Act 2017, Ofcom is entirely funded through industry fees and charges.
Communications service providers (with a revenue of more than £5 million) must pay 0.1160 per cent of relevant turnover in the year ending 31 December 2016.
Operators that have code powers under the Electronic Communications Code (conferring benefits such as not having to apply for a street works licence to install certain equipment) will also have to pay an annual fee to Ofcom. The charge for 2018/2019 was £1,000. Operators also have to pay a one-off charge of £10,000 for Ofcom’s cost of dealing with the application for code powers.
Ofcom has the power under the WTA to set fees in relation to wireless telegraphy licences, other than for those awarded by auction. Under the WTA, Ofcom is able to prescribe ‘Administered Incentive Pricing’, allowing for fees to be set at above administrative costs so as to encourage efficient use of the spectrum. Ofcom must set out the fees through published regulations. Ofcom is able to either update existing regulations or publish new ones. Since the Wireless Telegraphy (Licence Charges) Regulations 2011, Ofcom has taken the former approach of prescribing new fees by means of updates. The latest changes were made in 2016. See Ofcom’s website for more details.
Television and radio
Ofcom also charges licence fees for the radio and television sectors. The percentage of annual turnover payable varies according to the turnover of the operator. Further details can be found on Ofcom’s website.
The Investigatory Powers Act 2016 (IPA) applies to public Wi-Fi providers, which may result in them being required to retain and disclose communications data to authorities.
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