Political Monitor 24/07/2020

24 July 2020

COVID-19

DCMS Committee hears evidence on impact on COVID-19 on digital technology

On Tuesday, the DCMS Committee held an evidence session of their inquiry into Covid-19 impact on DCMS Sectors focused on digital technology. The session included witnesses from Which? and the CBI. Some key points included:

• MPs were interested in ISPs’ success during the coronavirus crisis, and all witnesses agreed that the last few months have highlighted the importance of good quality broadband.
• Research conducted by Which? shows that lockdown has not increased demand for better broadband connectivity.

• Piggin (Which?) argued that consumer demand must increase if gigabit rollout is to succeed. Current problems include a lack of understanding of telecoms terminology and speed as well as the benefits and costs of gigabit broadband.
• Piggin said it is crucial that telecoms, Ofcom and the Government improve consumer’s understanding of the benefits of gigabit. This must include tangible examples such as improved connection for talking to family or home-schooling.
• Burch (CBI) suggested that in order for the 2025 target to be met, the Government needs to focus on legislation to eliminate on the ground challenges e.g. right to entry and eliminating exclusivity for new build developments, as well as making sure the £5billion is made available in 2021.
• CBI argued that exemptions for laying fibre should also be increased to 2029. This is because they are currently extended to 2022 but most of fibre will be laid between 2022-25.

Broadband

Government announce approach to EECC implementation

DCMS have published the Government response to their consultation on the EECC. The full response can be found here, and the press release here. For reference, ISPA’s response to the original consultation can be found one our website. The response sets out the Government’s approach to transposing the EECC, and states which articles will be transposed in full, just copied out or deprioritised from the December 2021 timeline. The Statutory instrument needed to transpose the EECC will be laid in “Autumn” and the consultation notes further statement is expected from Ofcom regarding its planned implementation timeline in light of the pandemic.

DCMS has largely focussed on the infrastructure elements on the code with end user rights sections covered by Ofcom. Some of the main decisions made by DCMS regarding their transposition of the EECC include:

• Requiring Ofcom to publish aggregated build forecasts for areas not covered by any operator’s plans.
• Not transposing the fining mechanism or discretionary designation powers.
• Taking a modified and more prescriptive approach to the definition of bundles where only the services most relevant/related to telecoms are included in the scope of the EECC.
• Some provisions will be deprioritised from implementation by the 21st December 2020 deadline, where implementation deadlines fall beyond the end of the Brexit transition period, or where they would give the EU commission continued control over the UK market and regulator. E.g. Articles 6, 7, 8, 33, 65 & 75.

Treasury launch business rates review

Treasury have published a call for evidence on the fundamental review of the Business rates system in England as set out in the 2020 Budget. The review covers all types of business rates with the intention to reduce the overall burden on business, improve the current business rates system and consider more fundamental changes in the medium-to-long term.

The review is seeking more urgent responses on issues around reliefs and the multiplier (18th September) and further responses by 31st October. On reliefs the review asks several questions on how they can be simplified, more targeted and made robust against abuse.

The review includes a section on Plant and Machinery (P&M) rates which are levied on physical equipment rather than buildings. These questions focus on possible options for reform, including reviewing and updating the P&M principles, exempting some currently rateable P&M from business rates, and providing temporary relief (as with Fibre rates).

The call for evidence also considers new models for more frequent revaluations including increasing information provision for the VOA, regional or sectoral revaluations.

Ofcom

Ofcom publish guidance on the treatment of Vulnerable Customers

Ofcom have published some ‘best practice industry guidance’ on the treatment of vulnerable customers as part of their wider work on “treating consumers fairly”.  Whilst Ofcom note that over the course of the pandemic many more consumers will be considered vulnerable, the best practise guidance published is more general than COVID-19 specific. Ofcom considers the measures suggested as guidance rather than legal advice on how to comply with General Conditions on vulnerability.

Overall Ofcom’s guidance takes a very inclusive approach for who is potentially vulnerable, stressing that circumstances can change to indicate a customer’s changing vulnerability over time. Taking account of the “sudden and dynamic” changes that could be drivers for vulnerability is particularly important in the context of the current pandemic.

Ofcom note that “a large proportion of people in the UK might already be or could potentially become vulnerable due to their personal circumstances” and that operators continuously seek to develop their understanding of the different issues that could affect their customers. This includes most customers in areas which Ofcom expects providers to recognise as vulnerable. In the accompanying press release a quote from debt charity StepChange notes this and further highlights social tariffs for those behind on bills.

Consultation on business definitions and best tariff notifications

Ofcom have published a further consultation on the provisions within the European Electronic Communications Code (EECC) surrounding definitions of business and not for profit organisations, as well as best tariff notifications. Ofcom have revised proposals on definitions, and are now proposing to:

• Remove the financial threshold from the definition of microenterprise and small enterprise customers (under the old proposals this was set to annual turnover of £1.7m and £8.8m respectively).
• Use a single definition of ‘microenterprise or small enterprise customer’ with a headcount threshold set at 10 staff members (under the old proposals this was 0-9 employees and 10-49 employees respectively).
• Set a staff headcount threshold of 10 for not for profit organisations (under the old proposals there was no headcount threshold).

• Extend the guidance for providers on identifying employee headcount for not for profit organisations.

Under the previous proposals, consumer-like protections would have been extended to businesses of up to 50 employees and not-for-profits of any size, and these suggested changes are largely in line with ISPA’s arguments made in our response (found here).

On annual best tariff notifications, Ofcom are now proposing to:

• Amend the existing GC (C1.16) to specify that annual best tariff information only needs to be given for contracts which were previously subject to a minimum commitment period, which has now expired.

• Make a consequential amendment to their Guidance under GC C1 to remove now redundant text in relation to the timing of annual best tariff notifications.

The deadline for responses is 11th September 2020, and following this consultation period, Ofcom plans to publish a statement in Autumn 2020 covering industry implementation deadlines by provision.

Cyber Security

Digital Secretary gives evidence to Science and Technology committee

On Wednesday, the Science and Technology Committee heard their third round of evidence as part of an inquiry into UK telecommunications infrastructure and the UK’s domestic capability. Witnesses included, Oliver Dowden DCMS Secretary, and Henry Shennan, Interim Director of Digital Infrastructure at DCMS. Some key points included:

• Amy Karam, Fellow, Canadian Global Affairs Institute said that if the UK is to play a big part in 5G we must reach out and recruit more players from allies (e.g. Five Eyes) and emerging markets.
• MPs wanted to know what the Government was doing to support Nokia and Ericson and whether the Government was in talks with new vendors. Oliver Dowden MP, Secretary of State for Digital, Culture, Media and Sport confirmed they were in talks with Samsung and NEC.

• MPs also asked whether it was possible to trust the equipment of Nokia and Ericson, Dowden said there are risks with all equipment. He highlighted the fact that neither were British vendors and that this posed risks, especially with the supply chain.
• Even though Nokia and Ericson have said they can step up to the plate, Dowden feels the Government should introduce a new vendor.
• Asked how it would work with Samsung entering the market without legacy equipment, Dowden said that technical discussions are taking pace with both Samsung and NEC about this matter.
• Dowden stated they had a good relationship with existing vendors Nokia and Ericsson and the Minister for Digital Infrastructure continues to meet with them. Dowden said the Government were also looking at how they can support them by ensuring there is the sufficient market for 5G and by enhancing security levels and requirements.
• Dowden said the Government was choosing to stop the supply of Huawei equipment because of US sanctions and the implications these have for UK security.

DCMS publish statement on supporting the deployment of 5G and extending mobile coverage

Minister for Digital Infrastructure, Matt Warman MP announced that DCMS have published the Government’s response to the 2019 consultation on the principle of amending permitted development rights to support deployment of 5G and extend mobile coverage. The Government are satisfied that the proposed reforms are necessary, particularly in rural areas, where mobile coverage tends to lag behind more urban areas. The Government are intending to take forward the proposals consulted on to:

• Invest £200 million in a program of 5G testbeds and trials to encourage investment in 5G so that communities and businesses can benefit from this new technology.
• Enable the deployment of radio equipment housing, such as equipment cabinets, on land without requiring prior approval, up to specified limits and excluding on sites of special scientific interest, to support 5G deployment;

• Strengthen existing masts up to specified limits to enable sites to be upgraded for 5G and for mast sharing without prior approval;
• Enable the deployment of building-based masts nearer to highways to support deployment of 5G and extend mobile coverage, subject to prior approval and specified limits; and,
• Enable higher new masts to deliver better mobile coverage, and mast sharing, subject to prior approval and specified limits.

Written question about 5G

Shadow DCMS Minister Chi Onwurah, wrote to the DCMS Minister in reference to his oral statement on Huawei asking what risk assessment his Department made on the potential effect of allowing use of Huawei technology in the 2G, 3G 4G networks.

Warman replied the Government’s position on legacy networks had not changed and that mitigation arrangements will remain in place as the Government continues to work with operators to mitigate risks. Warman said the recent US sanctions will only impact future Huawei equipment including 5G, full fibre and beyond.

Written question on the cost of removing Huawei from 5G networks

Onwurah asked the Secretary of State for Digital, Culture, Media and Sport what estimate he has made of the amount of the £2 billion cost of requiring operators to remove Huawei equipment from their 5G networks by 2027 will be spent with British companies; and what estimate he has made of the potential number of jobs that will be created as a result of that spending. Warman replied that the figure of £2billion is an estimate of the additional costs to operators of removing Huawei equipment from their 5G networks. Warman said these costs will vary across the different mobile operators. The process for complying with the Government’s decision will include commercial decisions that are for the mobile operators to make.

Online Safety

DCMS Committee Report on Misinformation in the COVID-19 Infodemic published

This week, DCMS Committee published its report on Misinformation in the COVID-19 in which they explore evidence on a range of harms from dangerous hoax treatments to conspiracy theories that led to attacks on 5G engineers. MPs have voiced new concerns that the delayed legislation will not address the harms such as these which have been caused by misinformation and disinformation.

The Report finds that tech companies use business models that disincentivise action against misinformation while affording opportunities to bad actors to monetise misleading content. The DCMS Committee calls for the Government to make a final decision on the appointment of the regulator now, with Julian Knight MP, Chair of the DCMS Committee, saying the Government must “get on with the ‘world-leading’ legislation on social media that we’ve long been promised”. Knight continued that “the coronavirus crisis has demonstrated that without due weight of the law, social media companies have no incentive to consider a duty of care to those who use their services.”