Digital News Bytes January 2022Posted: 21 Jan 2022
Welcome to our first edition of the New Year!
Protecting the UK’s full fibre rollout – policymakers safeguard critical national infrastructure
UK space policy and sustainability – securing the long-term future of a commercially exploitable space ecosystem
EU roaming in a post-Brexit World – UK challenges in maintaining EU cooperation
Protecting the UK’s full-fibre rollout – It is welcome news from Ofcom that the last part of 2021 saw an acceleration in the availability of full-fibre rollout, but this does not represent actual connections. Moreover, the government’s strategy relies significantly on BT delivering the necessary critical infrastructure investment – a strategy that saw Ofcom “sweeten the pill” with regulatory incentives to invest in full-fibre given to BT back in March 2021; and more recently in December 2021, the government issued a stark warning about protecting BT’s critical national infrastructure from “foreign takeover” following stake-building in BT by Altice. National safeguarding in the interests of public policy concerns will need to be balanced against fair and proportionate responses from UK policymakers in seeking to protecting the UK’s fibre rollout ambitions, so that investor and market confidence can be maintained.
UK space strategy and sustainability – Following on from last year’s first ever National Space Strategy, Ofcom has now announced “lighter touch” regulation of any new non-geostationary (NGSO) satellite earth stations and networks. A bold new strategy governing the UK’s approach to commercial exploitation of outer space has much to recommend it, but there still seems to be a need for a more radical overhaul of the existing outer space legislation to deal with the sustainability of this shared scarce resource, given the anticipated growth of commercial activities, not just in the UK but around the world. Hopefully, this will at least be referenced as an issue for regulatory coordination and cooperation by the forthcoming spectrum management strategy to be issued by Ofcom.
EU roaming in a post-Brexit world – With some minor delays, the reintroduction of EU roaming charges is imminent post-Brexit, at least in the case of 3 of the 4 UK mobile operators at the current time – the latest announcements suggest that Vodafone’s charges will be implemented end January, EE’s in March and 3’s in May. Only O2 is holding out for the time being. Greater divergence between the EU and the UK regulatory regimes is inevitable post-Brexit, but at least in the case of roaming, we will return to a previous world order of reciprocal commercial agreements being negotiated between UK and EU operators for the termination of mobile traffic. With the news that EU leaders have provisionally agreed to extend the current EU Roaming Regulation until 2032, perhaps this would provide a useful backdrop for the continued cooperation between the UK and EU on the “fair and transparent” mobile termination rates contemplated in the Brexit Trade Agreement.
Protecting the UK’s full-fibre rollout – Ofcom issued a report in December 2021 which found that Full-fibre broadband (FTTP) is now available to 8.2 million homes (28%), 3 million more premises (10% more) than a year ago, which represents the highest year-on-year increase since full-fibre started being rolled out in the UK. It is indeed good news that BT/Openreach’s fibre rollout is gaining momentum, but this is a UK wide figure (with the biggest increase in Northern Ireland), and we still have some way to go to translate this availability into actual connections to home by ISPs.
Indeed, perhaps we are starting to see the signs that the policymakers appreciate the large mountain yet to climb in rolling out these higher speed next generation networks following the “Project Gigabit” plan announced by the government last year. In March 2021, Ofcom incentivised BT to make further investment in fibre by confirming that it does not intend to impose price caps on wholesale broadband services until at least 2031, and will allow BT would have the opportunity to earn a return above its cost of capital over the whole fibre investment cycle. As a result, BT has committed to pass 25 million homes with its full fibre network by 2026.
In addition, the government was very quick to react to potential stake-building by French telecoms company, Altice, totalling an 18% stake in December 2021 - no doubt attracted by BT’s committed next generation infrastructure investment against a favourable regulatory backdrop. The UK government immediately stated that it was “monitoring the situation carefully” and that “The government is committed to levelling up the country through digital infrastructure, and will not hesitate to act if required to protect our critical national telecoms infrastructure.”
The UK is now clearly more aware of potential national security threats to its core digital infrastructure following the removal of Huawei from the 5G rollout – as seen through this month’s implementation of the National Security and Investment Act, under which it gains tougher powers to block the takeover of important national assets. This would certainly include BT, and so potential buyers beware, although a fair and proportionate regulatory balance will need to be achieved to maintain market and investor confidence.
UK space strategy and sustainability – Satellites enable modern life, using carefully coordinated radio spectrum in already crowded orbits to avoid harmful interference between different satellites.
Global communication, Internet and Earth observation services all use the inherently limited radio spectrum. It’s a space ballet which since the dawn of the space era, has been coordinated to avoid harmful interference between satellites.
With tens of thousands of new satellites poised for operation, new rules announced by Ofcom are set to liberate and streamline the process - building on the UK’s wider space policy ambitions, as set out in the first ever National Space Strategy issued by the government last year.
Certain orbits are crowded – particularly the Geostationary realm. NGSO satellites however work in their thousands to provide remote areas with high speed connections – but with increased numbers, comes increased risk of harmful interference. Ofcom is therefore implementing improved licensing approval and cooperation for NGSO earth stations and user devices to allow operators to safely deliver their space-based services on- ground without disruption and undue administration.
This welcome move is designed to encourage and support, in particular, the creation and innovation of high-capacity connections, such as for home broadband, Wi-fi onboard aircraft and trains, mobile phone backhaul and IOT enterprise services in remote areas. However, the important issue of sustainability remains to be addressed – with increasing numbers of players in the space ecosystem comes the potential for greater space debris, an area which has yet to be tackled by the UK or other countries. The forthcoming issue of a spectrum management strategy by Ofcom touch on this, but a more radical overhaul of the regulatory framework is likely to be needed.
EU roaming in a post-Brexit world – Despite assurances that post-Brexit EU roaming charges would not be implemented by the 4 UK mobile operators, the implementation of EU roaming charges is coming to pass in 2022 - at least in the case of 3 of the 4 UK mobile operators at the current time. The latest announcements this month suggest that Vodafone’s charges will be implemented end January, EE’s in March and 3’s in May 2022. However, all will offer fixed price/flat fee deals to try and help customers ease back into the new charging regime. O2 has confirmed that it will continue free roaming in the EU for customers, but it remains to be seen how long this will prove to be a competitive advantage for as pressure continues to build on mobile operators to invest in 5G.
Although free EU roaming was not agreed, the Brexit deal did provide some protection against consumer bill shock by including a monthly user cap of £45 on data roaming charges, unless a user expressly decides to go beyond this. This will no doubt operate in a similar way in practice to the previous Fair Usage Policy, where data caps would often still apply in order to prevent abuse of unlimited data plans.
Greater divergence between the EU and the UK regulatory regimes is inevitable post-Brexit, but at least in the case of roaming, we will return to a previous world order of reciprocal commercial agreements being negotiated between UK and EU operators for the termination of mobile traffic. The EU-UK Trade Agreement provides a backdrop for this though, as although it didn’t guarantee free EU roaming, it did contain general cooperation language aimed at identifying “measures to encourage cooperation on the promotion of fair and transparent rates for international mobile roaming services in ways that can help promote the growth of trade among the Parties and enhance consumer welfare.”
Since free EU roaming is set to be extended for EU members until 2032, according to the provisional agreement reached on December 9 by negotiators from the Council and the European Parliament, perhaps the UK could use this development in its next round of discussions with the EU on ”cooperation on the promotion of fair and transparent rates for [UK/EU] mobile roaming services”?
Article written by:
Dhana Doobay is a Partner at Spencer West. She specialises in Telecoms, Media & Technology, Cloud and digital services, Network-sharing and infrastructure projects, International “best practice” regulatory strategy, Mobile ecosystems and Strategic partnerships
Partner – Telecoms, Media & Technology
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