Electronic Communications (Amendment etc.) (EU Exit) Regulations 2019

Lord Foster of Bath Excerpts

Tuesday 9th April 2019 Lords Chamber

[The Parliamentary Under-Secretary of State, Department for Digital, Culture, Media and Sport (Lord Ashton of Hyde) (Con)]

My Lords, noble Lords will be aware that the Secondary Legislation Scrutiny Committee reported on this instrument on 3 April. Its report drew attention to provisions relating to intra-EU calling, which I will cover in my speech.

I do not anticipate that many of the provisions in the regulations will be of significant interest to the House, as they simply revoke EU legislation which is directly applicable and would be redundant if converted into UK law after exit. Nevertheless, I will cover these briefly. Detailed explanations of each EU instrument being revoked are provided in the Explanatory Memorandum accompanying this instrument.

The redundant EU legislation being revoked here includes, for example, laws governing the workings of EU bodies such as the Body of European Regulators for Electronic Communications, or BEREC, and the European Regulators Group for Audiovisual Media Services, or ERGA. The EU legislation governing these bodies would have no effect if retained in UK law if we were not a member of the EU. Future UK participation in such bodies has already been discussed at length by the House in other debates. This instrument does not impact that future relationship so I do not intend to retread that ground here. Similarly, EU legislation concerning the .eu internet domain would have no effect if retained in UK law.

The regulations also make technical amendments to EU legislation relating to the notification of personal data breaches by providers of electronic communications services. These include matters such as replacing references to the “competent national authority” with references to the Information Commissioner. These amendments are designed with continuity in mind, seeking to maintain the current approach in a way that makes sense once the UK has left the EU.

I turn to those provisions which I expect to be of more interest to the House. These concern the regulation of prices for certain intra-EU communications. I shall refer to these as “intra-EU calls”, meaning mobile and landline telephone calls, although they also apply to text messages. New European rules regulating the price of intra-EU calls were legislated for in December 2018. However, while these rules are now in UK law, they become effective only on 15 May this year. These rules regulate the maximum cost of mobile and landline calls and texts made from one EU member state to another. For example, a Spanish person calling from Spain to a friend in Italy would be making an intra-EU call. I highlight the obvious point that this is different from rules on mobile roaming, which apply when people travelling in the EU outside their home country use their mobile phones to make calls, send texts and use their data. The EU exit SI relating to mobile roaming was approved by both Houses and made on 14 March.

I return to intra-EU calls. The new European rules will require communications providers in the EU to charge their customers no more than 19 euro cents per minute for calls and 6 euro cents for texts. As I stated earlier, these rules come into force in the EU from 15 May this year. I appreciate that the intra-EU calls rules can be seen as a benefit to consumers. These rules have been introduced as a single-market measure. The rules establish a reciprocal framework which has the purpose of strengthening the European single market. Obviously, if we leave the EU without a deal, the UK will not be part of the single market, and equally obviously, it would not be appropriate to adopt single-market measures when we are not benefiting from its reciprocal framework. Therefore, this instrument revokes the regulation of intra-EU call prices so that the rules do not come into effect in mid-May this year.

However, consumers will experience no negative impact as a result of this instrument. This is because it is not coming into force, and there are currently a range of alternatives to calls and texts available to them. These include internet-based services if they are worried about the costs of traditional calls and texts. Consumers can also use calling cards or bolt-on deals, which are options that provide cheap calls and texts to the EU on top of an existing phone package. In addition, Ofcom already has the power to regulate international markets in certain instances where it identifies that serious competition concerns have led to market failure. To remove the provisions regulating intra-EU calls from the statute book is therefore the appropriate thing to do.

As a Government we are committed to ensuring that the law relating to electronic communications continues to function appropriately after exit. We must provide clarity and certainty to consumers and businesses. That is what these regulations will do, and I commend them to the House.

[Lord Foster of Bath (LD)]

My Lords, as the Prime Minister traipses around European capitals, seeking to get an extension and, I hope, prevent a no-deal Brexit, I very much hope that today’s relatively short debate will be wasted time. None the less, I was somewhat surprised that this SI was before us. It was only on 18 February this year that we debated the Data Protection, Privacy and Electronic Communications (Amendments etc) (EU Exit) Regulations 2019, so I was somewhat surprised that we needed another one.

--- Later in debate ---

[Lord Ashton of Hyde]

My Lords, I am grateful to both noble Lords for their points and detailed questions on a detailed SI.

The noble Lord, Lord Foster, castigated us for bringing these small changes forward at a late stage and asked why we did not bring them forward earlier. The noble Lord, Lord Griffiths, looked at the details, a substantial number of which need to be addressed, not only in legislation but in EU decisions, regulations and directives. That takes time, and we want to get it right. He also asked whether I can categorically assure him that he will not have to deal with these matters again. Of course I cannot give him that assurance, as he well knows, but the point is made and I accept it.

On a serious note, it is important to get these things right. I pay tribute to the civil servants in my department, who have worked very hard to try to do that. Most of the provisions in this statutory instrument are genuinely technical, changing the language so that it makes sense in the event that we leave the EU. Of course, this is a no-deal Brexit SI, so it is contingent on that.

The noble Lord, Lord Foster, asked some specific questions about his favourite subject—the BEREC regulations—such as why we did not bring them forward. The reason is that this SI repeals the 2018 BEREC regulation, which replaced the 2009 BEREC regulation. That regulation was repealed and replaced in December 2018, so it is now necessary to revoke the new 2018 BEREC regulation. It was not ready at the time of the previous SI, which is why we are doing that now. I hope that he can feel happy with that.

As far as the GDPR is concerned, we agreed the data SI in this House some weeks ago. The noble Lord referred to Article 81 on the suspension of proceedings, which is omitted from the UK GDPR. In a UK-only context, that provision becomes redundant, because it is right that breaches of the UK GDPR are brought before UK courts. Of course, amendments to the retained GDPR were debated by this House in February 2019.

[Lord Foster of Bath]

I will be brief. The Minister is absolutely right: any breach affecting a UK citizen will be dealt with by a UK court. However, it is perfectly possible that the processor could have been guilty of similar offences in other European countries. In those circumstances, will he confirm that both countries will have to take proceedings in their respective courts, and that this is an additional cost that did not exist previously?

[Lord Ashton of Hyde]

The noble Lord is right. If a data controller causes an offence in two different jurisdictions, two different jurisdictions could decide where they want to hold the controller to account. In the same way, if a person or a company committed a crime in two different countries that are not outside the EU, those countries would be able to take action against them for the law that pertains in their own countries.

The noble Lord, Lord Foster, also asked about the public warning system under the EECC. That is not part of this SI or the BEREC regulation and is therefore not part of the intra-EU core system. Post exit in a no-deal situation, the Government would be minded to implement the EECC where it fits in with UK policy objectives, but there will be no requirement to do that. I will take back his suggestion about the public warning system, but I can make no commitments on it at the moment.

On timing, the GDPR and the Data Protection Act came into force on 25 May 2018. The focus of the Data Protection, Privacy and Electronic Communications (Amendments etc) (EU Exit) Regulations 2019, which were debated in this House in February, was on the retained GDPR and the Data Protection Act. I think that was my last point, which I have already answered, so I beg the noble Lord’s pardon. I will check the record to make sure that I have answered his detailed questions, and if I have not I will write to him.

Public Service Broadcasters

Lord Foster of Bath Excerpts

Thursday 28th March 2019 Lords Chamber

[Baroness Bonham-Carter of Yarnbury]

To ask Her Majesty’s Government what assessment they have made of the speech of the Chief Executive of Ofcom on 28 November 2018 in which she encouraged public service broadcasters to collaborate to compete with global giants such as Netflix and Amazon in producing high-quality original content.

[Lord Foster of Bath (LD)]

My Lords, on behalf of my noble friend Lady Bonham-Carter and with her permission, I beg leave to ask the Question standing in her name on the Order Paper.

[The Parliamentary Under-Secretary of State, Department for Digital, Culture, Media and Sport (Lord Ashton of Hyde) (Con)]

My Lords, the Government recognise many of the issues and new challenges facing our public service broadcasters, highlighted by the Ofcom chief executive in her speech on 28 November last year. The Government are committed to supporting the PSBs to ensure that they continue to meet audience needs in future and remain at the heart of our world-class TV industry. This may mean PSBs collaborating to compete and forming new partnerships to achieve greater reach and impact. The BritBox proposal recently announced by the BBC and ITV is an example of this, and we look forward to seeing more detail on this service as it develops.

[Lord Foster of Bath]

I thank the Minister for his reply, but does he agree that in this fast-changing world—with US-based on-demand video streaming services such as Netflix, Amazon and now Apple increasingly penetrating the UK market—we need an agile regulatory regime that does not act as a brake on UK innovation? Netflix updates its platform once a week, yet it could take up to eight months for Ofcom to approve very modest changes to the BBC’s iPlayer. Should we not find a quicker way to approve BBC initiatives that benefit UK audiences and new proposals—such as the joint venture proposed by ITV and the BBC for BritBox—that could provide additional investment for new British content?

[Lord Ashton of Hyde]

My Lords, I agree with the noble Lord that we should have nimble and agile PSBs and therefore a regulatory system that is capable of dealing with that. The analogy he draws is not quite correct. Netflix can change its platform overnight because it has to consider only Netflix, whereas Ofcom has to consider the whole regulatory landscape. It is therefore important that it takes into account what effect it has if the BBC changes something such as the iPlayer. I take the point he makes about being nimble and agile and moving with the times. The chief executive of Ofcom made that point exactly when she said that it needed to be,

“a forward-looking regulator that supports the future success of UK TV, firmly rooted in the online world”.

Mobile Roaming (EU Exit) Regulations 2019

Lord Foster of Bath Excerpts

Thursday 14th March 2019 Lords Chamber

[Lord Foster of Bath (LD)]

My Lords, we use strange language in your Lordships’ House: we do not say “no”, we say “not content”; we “adjourn at leisure” and we have “Motions of regret”. On this occasion regret is the appropriate term because I suspect that if this statutory instrument is introduced, large numbers of UK citizens who wish to travel in EU 27 countries will very much regret the loss of the benefits from the EU’s roaming regulation 531/2012 and the subsequent amendments.

No longer when we go to those 27 countries will we be able to “roam like at home” with guaranteed surcharge-free roaming. No longer, as we heard from the Minister, will UK mobile operators be protected by the regulations on what the mobile operators in the EU 27 countries—and the EEA countries of Iceland, Liechtenstein and Norway—can charge our operators for providing roaming services. There will be, as one website put it, a “wild west” where roaming charges are determined by commercial reasons and the relationships that exist between providers, which may lead to various preferential rates.

I therefore regret that we will return to a myriad of prices depending on which country we choose to visit, which supplier we use and which tariff or bundle we have. That said, I put on record that I welcome the decision by the Government, covered in this SI, to replicate the €50 financial limit. I note that the Government have translated that to £45, which is actually a worse pound-to-euro exchange rate than currently exists—the implication is that if we have a no-deal Brexit the situation will get worse, which I am pretty confident it will.

[Lord Ashton of Hyde]

The noble Lord will find that the pound will fall, which of course benefits foreign tourism.

[Lord Foster of Bath]

I do not for a minute deny that there are some benefits, but overall it is certainly not good news. I was praising the Government; let me continue, because I also welcome that within this SI mobile operators will be required to give the alert to users when 80% and then 100% of their data allocation has been used.

There are some pretty obvious questions for the Minister. As he knows only too well, having referred to it himself, the Secondary Legislation Scrutiny Committee has posed a number of questions. There is one in particular about which it would be helpful to hear what the Minister has to say:

“The House may wish to invite the Minister to explain why the possible effects of removing the EU guarantee of surcharge-free roaming were not evaluated, and press for further information on the likely impact on individual and business users”.


I hereby ask him, and hope that he will respond. I would also like to know what efforts the Government have made to broker some kind of deal between the UK mobile phone operators and the relatively small number of operators in the EU 27 countries. It would surely be disappointing if we were to hear that absolutely no efforts had been made.

I know that the Minister wearies whenever I raise BEREC—the Body of European Regulators for Electronic Communications—in your Lordships’ House. Indeed, he is already yawning. He knows that this body, on which Ofcom—our own regulator—sits, played an absolutely vital role in bringing forward these welcome EU mobile roaming regulations. Even if we leave the EU and Ofcom is no longer a voting member, I am sure the Minister will accept that BEREC will be absolutely fundamental in determining any future changes to mobile roaming regulations, and that those changes will have a significant impact on us and on people in this country who wish to travel to the EU 27 countries.

Clearly, we should therefore be seeking to ensure the best possible relationship between Ofcom and BEREC in the future. As the Minister knows, that is the Government’s position. Indeed, on 7 January in the other place the Digital Minister said that,

“the Government recognise that Ofcom would benefit from the continued exchange of best practice with other regulators, and from the exchange of information about telecoms matters more generally”.—[Official Report, Commons, First Designated Legislation Committee, 7/1/19; col. 6.]

In the light of that, what steps have the Government taken in conjunction with Ofcom since I last raised this issue with the Minister to seek to sort out what the relationship is going to be following Brexit? I hope we will not get the answer that nothing has been done.

The Minister referred to the technical note that was issued on 13 September last year and which was updated subsequently, in which it says, interestingly and perhaps rather overoptimistically:

“In the likely event of a deal, surcharge-free roaming would continue to be guaranteed during the Implementation Period”.


However, it goes on to say—the Minister has referred to this already—that in the event of no deal:

“Some mobile operators (3, EE, O2 and Vodafone—which cover over 85% of mobile subscribers) have already said they have no current plans to change their approach to mobile roaming after the UK leaves the EU”.


Can the Minister explain exactly what “approach” means in this context?

I note a number of recent advertisements. For example, Three put out an advertisement on Tuesday saying:

“Remain roaming even if the law changes. We’ll let you Go Roam at no extra cost in Europe, just the same”.


Does that mean that Three has already done a contractual deal with the EU 27 mobile operators and knows what prices it will be charged? If Three can do it, why have the Government not worked with all the other operators to secure certainty for them? Can the Minister explain what EE meant when it told the BBC only a few days ago:

“We are working closely with government on this”?


Can he inform us what work is being done by the Government with EE and what benefit that will bring to British customers?

We note another issue raised by the Secondary Legislation Scrutiny Committee. It drew our attention to the Explanatory Memorandum, which says:

“Mobile operators noted that absent a cap on the charges EU operators can apply to UK operators (as currently regulated by the EU), any increases in costs would likely be passed on to customers”.


It goes on to point out that the effects of all these changes could mean that,

“roaming services could be removed altogether from some customers”.

Can the Minister tell us what estimate the Government have made of that possibility that roaming might disappear altogether? It is certainly not covered in the impact assessment.

The technical note to which I have referred also advises UK citizens visiting EU 27 countries post Brexit to,

“be aware that Ofcom rules allow cancellation of your contract free-of-charge if your operator makes certain price increases”.

I gave the Minister advance notice that I would raise this matter, so I hope that he will be able to help us by saying what “certain price increases” enable us to cancel contracts and switch to another provider free of charge. The technical note cross-references Ofcom’s Guidance under General Condition C1—contract requirements. I confess that I simply could not understand a word of that document and what it means, so I went to other sources, and in particular to the Which? website, which was infinitely more helpful. That says:

“Rules set by the regulator Ofcom mean that customers can leave mobile, landline or broadband contracts penalty-free if a provider ups prices mid-contract if the rise is of ‘material detriment’, for example a rise that’s bigger than the RPI rate”.


Is Which? correct in defining material detriment as a rise bigger than the RPI rate? More importantly, I—and I am sure the House—would like to know whether that applies to a rise in mobile roaming rates while abroad. After all, that is a bolt-on to the contract that we all have with our providers, not the main contract. So the question is: if the main contract conditions for calls, texts and the use of mobile data remain the same but there is a significant increase in the cost of mobile roaming when in the EU, does the material detriment rule apply in those circumstances so we can switch contract and get a better deal with another supplier?

I look forward to the Minister’s response. While I was looking at the Which? website for help with some of these definitions, I noticed the words of Alex Neill of Which?, who said:

“Two-thirds of people think free roaming is important when travelling in Europe, so any return to sky-high charges for using mobile phones abroad would be a bitter blow for millions of consumers”.


That is why we should regret this SI if it ever has to come into force.

[Lord Ashton of Hyde]

My Lords, I am slightly surprised that I am on my feet already. I thank noble Lords for their contributions. I will try to ask their specific questions before coming on to the point in the amendment to the Motion.

The noble Lord, Lord Foster, made a general point about “regret” being the correct word in these circumstances. Of course it is obvious that “roam like at home” in the EU 27, which has been with us for 18 months, is a good thing for consumers, and I think that many of us who have been abroad in the EU 27 or possibly even the EEA countries have benefited from that. In fact, we have had that not just in the last 18 months; wholesale charges have been capped to some extent for nearly 10 years. Therefore, I agree that there are detriments. However, it is true that consumers are used to dealing with the absence of “roam like at home” in every other country in the world, and there are now many ways by which one can alleviate that, such as the increased use of wi-fi and apps that allow you to communicate over the internet—and of course the ultimate sanction is to switch roaming off. However, I accept that it is a useful thing.

The noble Lord, Lord Stevenson, in speaking to his amendment to the Motion went a bit wide of the issue, as is his wont, but it was interesting nevertheless. He talked about roaming in the UK, which is a domestic issue, not the question of roaming when abroad. It is true that in previous debates—I remember debates with both noble Lords on the subject of domestic roaming—we have said that we were not in favour of it because it prevented investment and stopped competition, and it is true that in most countries roaming at home is not an accepted practice. However, we want to have high-quality mobile connectivity where people live, work and travel in this country, we have committed to extending geographic mobile coverage to 95% of the UK by 2022, and we are looking at ways to achieve that target.

Particularly in rural areas, it is possible to allow customers to be switched on to a network service if their provider has none. I can confirm to the noble Lord that the new statement of strategic priorities for Ofcom, which is our suggestions for what it should consider, has recommended that it further examine the costs and benefits of domestic roaming and to retain the option of requiring operators to introduce rural roaming.

--- Later in debate ---

The noble Lord, Lord Foster, talked about the impact assessment and the cost on business. The reason that the impact assessment has not laid out a cost to business is that it highlighted the difference between this SI and doing nothing. We have not assessed the impact of removing the requirement for guaranteed surcharge-free roaming. That is because that impact would not be a result of the statutory instrument. The proof of the pudding is that the big four operators have no plans to implement roaming charges, even if the SI is passed and comes into force.

[Lord Foster of Bath]

On that point, the Minister said that the operators have no plans to introduce charges. In fact, the government document I referred to said that they had no plans to change their approach. Can he guarantee that he has confirmation from the big four that they have no plans to introduce mobile roaming charges following a no-deal Brexit?

[Lord Ashton of Hyde]

We have had discussions with operators, and it is correct that they have said that they have no plans to do that after Brexit. They have not said that if they are charged increased charges by foreign operators, they will absorb all the costs ad infinitum, for the rest of time, irrespective of what they are. That is not an unreasonable position. The point is that since roaming as if at home has been introduced, consumer requirements have changed, what consumers want has changed, the methods and technology has changed and consumer data usage has changed. For example, I think there is four times as much data being consumed as phone calls. It is very difficult to compare the situation 10 years ago, before any caps came in, to what will happen now.

However, in this country, there is competition between operators, which does not exist in all European countries, so the competitive element is very much at the forefront of consumers’ minds, but we are not requiring operators to accept a differential status, a one-sided regulation. I shall come to that later. When the Regulatory Policy Committee considered the impact assessment, it said that it was satisfied that any impact on price changes will not be a direct result of this SI.

The noble Lord, Lord Foster, asked who we have consulted. We have consulted the big four operators O2, Vodafone, EE and Three, the mobile virtual network operators Sky, Virgin Media and Lebara, trade bodies Mobile UK, the Broadband Stakeholder Group and many consumer groups. He also asked what were the views of the mobile network operators. They expressed similar concerns about this scenario. Of course they were concerned about not being party to the EU roaming regulation, but that is a function of leaving the single market. They did not believe that the regulation mandating surcharge-free roaming could and should endure, for the reasons I mentioned, but I confirm that they said that, because of customer demand, they have no current plans to reintroduce roaming surcharges. That is not an unlimited guarantee forever, as I think I said.

As for BEREC, I agree entirely with both my honourable friend in the other place and the noble Lord, Lord Foster, that our relationship with the European regulator has been beneficial not only to us but to BEREC. We are one of the leading regulators in the EU. Of course, if there is an agreement and an implementation period, the Government will seek arrangements with the EU or BEREC and, if there is no deal, it will be desirable for the Government to seek participation in BEREC. We have agreed in government—not just in DCMS but more widely—that that is beneficial. We will therefore continue making overtures to BEREC to try to have an arrangement that will involve not full membership but, if you like, associate membership where we can contribute our views.

I turn to the amendment to the Motion, which implies that we should not have done what we said we would and capped roaming charges. I explained in my opening speech why the UK cannot retain surcharge-free roaming in law in the event of no deal. The instrument recognises this by correcting deficiencies in retained EU law and removing rules on wholesale and retail charges that are simply unworkable if we leave the EU without a deal.

The noble Lord, Lord Stevenson, prayed in aid the recommendations made by consumer bodies. As I said, we have had a number of conversations with them and provided detail of those interactions to the Secondary Legislation Scrutiny Committee in advance of its report. I mentioned that it noted the benefits of surcharge-free roaming, but the fact is that when the UK is outside the single market, we will not be able to control the charges levied on UK mobile operators by their European counterparts, because this Parliament has no authority over them. The consumer organisations recognise that. For example, Which? stated on its website on 7 February 2019:

“In order to keep ‘roam like at home’ going, it is likely a similar mutual cap”—


by which it means on wholesale prices—

“would have to be agreed for it to be cost effective for mobile operators”.

Let us be clear on the implications of the noble Lord’s amendment to make provisions to retain surcharge-free roaming. The policy would explicitly put British companies at a disadvantage, compared with foreign competitors, by capping their retail charges but allowing EU operators the freedom to charge them whatever wholesale rate they like. It would put roaming at risk for some operators, thus removing competition. It could therefore force British network operators to increase their overall prices to recoup the foreign charges, so the policy could increase consumers’ costs.

However, it is worse than that. It would mean that people who choose to remain in this country are subsidising those travelling to Europe. The policy would increase the risk of legal uncertainty. Lastly, it would penalise heavily smaller mobile virtual network operators, because they use the physical networks of the main operators and therefore must accept the increased costs without a corresponding network usage to offer EU operators in return. To sum up, the policy could increase costs, have a negative impact on consumers and increase the legal risks around future roaming policy.

Which? suggests that the UK should seek to include mobile roaming in a deal with the EU and in trade deals with other countries. As government Ministers first set out in Answers to Written Questions last June, mobile roaming could form part of any trade negotiation we have with other countries after we leave the European Union, and the Government are exploring all options. Any arrangements on mobile roaming would be subject to negotiations. In the meantime, as I said before, there is no reason to prevent commercial negotiations between UK and EU operators.

For reasons noble Lords will understand, it is too early to detail exactly the future arrangement with our European partners. In the event of a no-deal exit, the amendments in the SI are essential. They will ensure legal clarity for consumers and businesses, retain all operable parts of current roaming law and protect consumers in the event of a no-deal exit. Meanwhile, I repeat that the largest four operators have no current plans to reintroduce charges, so on exit day and thereafter there will be no change.

I hope therefore that we can all agree that it is in the clear interests of British consumers and businesses that this SI is in place in the event of a no-deal outcome. In the light of my remarks, I hope that the noble Lord will feel able to withdraw his amendment and I hope that these regulations will be approved.

Electronic Communications and Wireless Telegraphy (Amendment etc.) (EU Exit) Regulations 2019

Lord Foster of Bath Excerpts

Thursday 7th February 2019 Lords Chamber

[The Parliamentary Under-Secretary of State, Department for Digital, Culture, Media and Sport (Lord Ashton of Hyde (Con))]

My Lords, I thank noble Lords for their contributions to the extensive debate in Grand Committee on Wednesday 23 January. I committed then to provide further information concerning the engagement with stakeholders that had occurred, especially with the UK Competitive Telecommunications Association. I wrote to all noble Lords who participated in the debate and placed a copy in the Library on 29 January. I hope that that was acceptable to noble Lords and I beg to move.

[Lord Foster of Bath (LD)]

My Lords, we had a full debate in Grand Committee on this statutory instrument last week and I place on record my gratitude to the Minister for the comprehensive letter that he sent to many of us following our deliberations on that occasion. I am sure that it will be a great pleasure to the Minister to know that I do not intend to revisit all the points that I raised on that occasion, with the exception of one, which is very important.

A general point has been occupying and concerning Members of your Lordships’ House in relation to our leaving the European Union, not least during a debate on 30 January on the Trade Bill. There was much discussion about the vital importance, following our exit from the European Union, of remaining as close as we possibly can to all the various organisations within the European Union that determine the rules on which trade between the UK and the European Union will depend.

The Minister will be well aware that, in relation to the specific business and trading arrangements that will occur between the UK and the EU, with this instrument we are talking about the broadband and telecoms industries. I note with great interest, in the light of the debate that we have just had on roaming charges, what the Government said in their technical notice issued on 13 September last year, which stated that,

“irrespective of the outcome of the negotiations between the UK and the EU, we do not expect there to be significant impacts on how businesses operate under the telecoms regulatory framework and how consumers of telecoms services are protected”.

But we have just heard in relation to roaming charges that that simply does not stack up and that there will be serious implications for our telecoms and broadband sectors. They are very important to the economy of this country. For instance, telecoms has revenues of something like £40 billion. There are going to be significant impacts.

The Minister was very clear in relation to roaming charges that because we are leaving the European Union we cannot participate in harmonised roaming arrangements. We have to accept that we have to face the consequences of a no-deal situation. I suggest to the Minister that there is one area in which we could try to do what we can to mitigate some of the consequences that will occur following exit, in relation to the way in which we seek to participate in the very body that will determine the rules under which our telecoms and broadband organisations will have to operate. As the Minister well knows, as we have debated this on many occasions, that body is BEREC. It brings together all the relevant regulators, including our highly regarded UK regulator Ofcom, to discuss all the rules that will affect everybody.

The House will be well aware that very recently the European Union introduced the new Electronic Communications Code, which will have a significant bearing on how all the industries throughout the 27 and within the UK operate in future. In future there will be further changes to those rules, and it is therefore very important that we do everything in our power to remain involved. I accept that there will not be the opportunity to be a full member with voting rights, but it is important that we remain as close to BEREC as possible. That view is shared by many organisations, not least Ofcom. It has pointed out that in future BEREC will be hugely influential in, for instance, changes to the European Electronic Communications Code, and in any new guidelines on international roaming, net neutrality and many other issues. It said:

“Even if the UK is not bound to follow EU laws, the approach taken at EU level on these issues will continue to be relevant to the UK and to many of the companies we regulate, many of whom also have operations in other EU countries or are subsidiaries of international telecoms groups that have substantial operations in other countries”.


It gives the examples of Telefónica, Three, Virgin Media and Vodafone, and goes on to say:

“There are also more general benefits from participation in EU networks since they provide a forum in which we can cultivate and sustain bilateral relationships with our EU peers, at both senior and working levels, to exchange experiences and share best practices”.


It is clear that Ofcom believes it is important to remain as close as it can to BEREC. I believe it is important for our telecoms and broadband industries in the UK, and I am delighted that the Government seem to share that view: in the other place on 7 January the Minister, Margot James, said that,

“the Government recognise that Ofcom would benefit from the continued exchange of best practice with other regulators, and from the exchange of information about telecoms matters more generally”.—[Official Report, Commons, Delegated Legislation Committee, 7/1/19; col. 6.]

Given that we are all agreed, the question is: how is that going to be achieved? When we debated this in the Moses Room, the Minister said very clearly that he was confident that, because Ofcom is such a highly regarded regulator, BEFEC would be very keen to involve it. One would hope that that would be the case.

However, the Minister is also aware that he is part of a Government who have signed up to the withdrawal agreement, which contains within it at Article 128 a very clear statement that our bodies and expert groups, such as Ofcom, will not be able to participate in gatherings such as BEREC. It is clear that they cannot do that, or can do so only in certain circumstances—I suspect the Minister is about to get up and give the exceptions; if he wants to do so rather than me, I am happy to give way.

[Lord Ashton of Hyde]

That is kind of the noble Lord. Is he aware that this is a no-deal SI and that therefore the withdrawal agreement does not apply?

[Lord Foster of Bath]

I absolutely accept that; my point is that we need to look at the attitude of the Government towards their relationship with bodies such as BEREC. If, even without a no-deal situation—that is, even within the withdrawal agreement, where it is hoped there will be a deal—the Government are supporting a mechanism that they have written themselves, which makes it difficult for Ofcom to be involved in BEREC, then we should have some real concern.

I have drawn attention—I will not repeat the detail in your Lordships’ House now—to how Article 128 makes it difficult for Ofcom to be involved in BEREC. During the debate on the Trade Bill, the Minister concerned gave a very different interpretation of that situation. He made it clear that he thinks it will be perfectly possible for Ofcom to be involved. I challenged that Minister, the noble Lord, Lord Bates, on whether he agreed with my interpretation or with that of his noble friend. I was somewhat surprised by the answer he gave. He said:

“The noble Lord, Lord Foster of Bath, made an interesting point about the reputation of Ofcom, which of course we all recognise as a world-leading authority. He then offered me a pretty difficult choice of choosing between his persuasive speech and the words uttered in Committee by my colleague in government, my noble friend Lord Ashton of Hyde. Given that I speak from the Government Benches, I am afraid that I must side with my noble friend Lord Ashton in this regard”.—[Official Report, 30/1/19; col. 1156.]


So two Ministers now have disagreed with my interpretation of whether we will be able to participate closely with BEREC. I end with a simple question for the Minister today: will he give a clear assurance that, in the event of no deal, it will be the Government’s intention to take all necessary steps to ensure the maximum co-operation between Ofcom and BEREC?

[Lord Griffiths of Burry Port (Lab)]

My Lords, I rise to wish the Minister well. We had a good debate in Grand Committee. We shared very frankly a number of views. There were questions relating to what kind of consultation had taken place; others were raised persistently and clearly by the noble Lord, Lord Foster of Bath, and he has continued to pose them this morning. I was reassured by the letter that we received, which took up and dealt with a number of the questions that we had been struggling with.

Once again, as I said from the Dispatch Box yesterday, I am trying to make a clear distinction between what needs to happen to the statutory instrument laid before us—I am sure the matters arising from it have now been adequately aired—and the questions that will go on worrying us after this instrument has been passed; as we move into the next phase, we will be debating substantive issues that certainly have not been answered in a debate of this kind. For the purpose of dealing with the piece of business directly before us, I am happy to give our accord from these Benches, but not if that should be supposed to cancel, diminish or sideline the issues that have been raised from the other Benches.

[Lord Pannick (CB)]

My Lords, I support the noble Lord, Lord Foster, in the concerns that he has raised. It is not just the Minister in the other place who says it is important for Ofcom to benefit from the continuing exchange of best regulatory practice; it is in paragraph 7.35 of the Explanatory Memorandum:

“However, the Government recognises that Ofcom would benefit from the continued exchange of regulatory best practice with other national regulatory authorities and the exchange of information about electronic communications matters more generally”.


The memorandum goes on at paragraph 7.36 to note that,

“the BEREC Regulation presently allows BEREC to invite observers to attend its meetings, and that the new BEREC Regulation is expected to provide that the Board of Regulators, the working groups and the Management Board should be open to the participation of regulatory authorities of third countries”—

which of course would include us in the event of no deal—

“where those countries have entered into agreements with the EU to that effect”.

My question is therefore about whether it is the intention of the Government that, in the event of no deal, Ofcom should urgently seek from other EU states an agreement that will allow Ofcom to have such observer status so that Ofcom can benefit from the continuing exchange of best regulatory practice, and indeed the regulators at BEREC can benefit from Ofcom’s expertise.

[Lord Foster of Bath]

Does the noble Lord agree that if he wishes to achieve that which he seeks—I entirely agree with him—there will have to be a change to Article 128 of the withdrawal agreement? That article specifically says that any invitation to attend will be exceptional and only in specific circumstances—namely, as it says in paragraph 5(a) and (b), that,

“the discussion concerns individual acts”,

or individuals within the UK, or, and this is critical,

“the presence of the United Kingdom is necessary and in the interest of the Union”,

and so on. So it is very clear that even if we sought that invitation to attend, it would be in limited circumstances unless changes are made to Article 128.

[Lord Pannick]

I share the noble Lord’s concern. It is all very puzzling. That agreement is of course a premise that contradicts the premise of these regulations. As the noble Lord says, these regulations are entirely on the premise that there is no agreement. What is puzzling is that if there is an agreement, the circumstances in which Ofcom would be able to participate in BEREC appear to be very restrictive indeed. There is therefore real concern that, in the event of no agreement, it might be said by BEREC that the circumstances in which Ofcom could participate could not be greater than the circumstances if there were an agreement. That is why I ask the Minister to confirm that it is the Government’s intention that Ofcom should be able to participate, which is obviously sensible and desirable for everybody. Has there been any discussion with our European colleagues on whether that can and will be secured in the event of no deal?

Broadcasting (Amendment) (EU Exit) Regulations 2019

Lord Foster of Bath Excerpts

Wednesday 6th February 2019 Lords Chamber

To conclude, I believe that the draft regulations are necessary to ensure that the UK statute book works on exit and that audiences are protected from harm, and I commend them to the House.

[Lord Foster of Bath (LD)]

My Lords, the Minister will be pleased to hear that it is not my intention to oppose to this instrument. As he indicated, in the event of a no-deal Brexit, we need to ensure that those companies that provide at least linear television services in the UK are properly licensed—whether they are based here or elsewhere—and that viewers are protected. However, I take a very different view from the Minister in describing this instrument, particularly the description we find in the Explanatory Memorandum. Paragraph 12.3, for example, explains and justifies the lack of an impact assessment on the grounds that,

“the instrument will maintain the status quo as far as possible”.

It also suggests that the only inconvenience broadcasters with services available in the UK will face is the,

“need to familiarise themselves with new licensing system and guidance as proposed by Ofcom”.

Both lines show significant complacency on the part of the Government and are a massive oversimplification of what will happen if the instrument is needed.

The Explanatory Memorandum states explicitly that,

“no, or no significant, impact”,

on the private or voluntary sector is foreseen. Frankly, this is nonsense. When this instrument was debated in the other place on 29 January, the Minister there, Margot James, was forced to admit that at least 50 or 60 channels will for the first time be required to be licensed by Ofcom—hardly evidence of no, or no significant, impact.

Even more significantly, the Minister appeared to acknowledge that the loss of involvement with the AVMS directive regime, including the country of origin principle, should be of concern to us in this country, noting that the UK currently has a sizeable share of the entire European television market. As noble Lords will be well aware, we have something like 1,200 of the 3,000 channels across the whole of the EU. She said:

“A sector that grows at 25% more than the average rate of the economy is certainly a success. In part, that success is indeed down to the very beneficial regime, the AVMSD”.—[Official Report, Commons, Sixth Delegated Legislation Committee, 29/1/19; col. 7.]


So the loss of that “very beneficial regime” can surely be expected to have rather more than,

“no, or no significant, impact”.

The reason, of course, is that owners of the 600 or so channels currently licensed in this country but shown in other EU countries will now need to make new arrangements, not least by seeking licences elsewhere in the European Union. As I am sure noble Lords are well aware, to achieve that, they will either have to move their headquarters from the UK to another EU 27 country, or at the very least move some of their editorial staff to ensure that they have what is known as a “meaningful presence” in a different European country.

We already know that Sony is moving its headquarters to the Netherlands. We have already heard about Discovery Channel, Turner and NBC planning the movement of staff. Even the BBC is planning the movement of staff. Hardly surprisingly, Ireland, Germany and the Benelux countries—Belgium, the Netherlands and Luxembourg—are all actively targeting UK-based companies to persuade them to move to their country so that they can benefit from the AVMS directive and the current country of origin regime.

Given that we do not know yet which companies are likely to move their headquarters or their staff, and we do not know where they are likely to go, or how many staff are likely to go with them, it is difficult to be clear about precisely what the impact will be. However, I would argue strongly that there should have been a detailed assessment of the likely impact. We should have had, for example, detailed discussions with each of the potential receiving countries about what is meant in their country by a “meaningful presence” to ensure that a company would be allowed a licence in that country. Indeed, it is somewhat unclear what a meaningful presence in this country would be. Could the Minister give us a definition of what would amount to a meaningful presence here, enabling a company to get a licence here?

We know that some UK-based companies already have staff in other countries. I am not suggesting that there will be a total flood of people leaving, which would be catastrophic for the industry, but it will certainly make a significant dent in our world-beating broadcasting sector. Does the Minister believe the words in the Explanatory Memorandum—that there will be,

“no, or no significant, impact”?

Can he justify why we have not had an impact assessment for this instrument?

I am aware that when the Minister responds to my query he may refer to the convention on transfrontier television—the ECTT. He may argue, just as the instrument does, that implementing the ECTT—which, as he rightly pointed out, we signed and ratified as far back as 1993—provides a similar system of freedom of reception and transmission between the parties to the convention as the AVMS does between EU members. If the Minister uses that to justify the claim that,

“the instrument will maintain the status quo as far as possible”,

I suspect he will be in significant difficulty, because there are major problems in making that claim.

The Minister said that “only seven” of the EU member states are not members of the ECTT. However, only seven is more than 25% of the EU 27, so that means that UK companies that wish to have their channels shown in Belgium, Denmark, Greece, Luxembourg, Sweden or—especially important in this regard—the Netherlands or Ireland, will have no choice but to move HQ, as I said, or at least to move some staff, to another EU country. So will he acknowledge that describing the ECTT as a “similar system” is not a widely shared view?

Indeed, PACT—a trade organisation representing, among others, UK television companies—notes that the enforcement regime of the ECTT has nothing like the same ultimate recourse to a body such as the EU Court of Justice. COBA, the Commercial Broadcasters Association, describes the ECTT as having significant limitations. Our own House of Lords EU Select Committee, in HL Paper 135, said that,

“neither the Transfrontier Television Convention nor coproduction treaties are viable alternatives for trade”.

In the other place, the House of Commons DCMS Select Committee concluded just last month that the ECTT was “severely limited”.

Even the former Digital Minister, Mr Matt Hancock, was forced to admit when giving evidence to the EU Select Committee, that the ECTT was agreed in 1993, and that,

“in this space, that is a long time ago”.

No doubt because of that huge distance, another difference appears, in relation to how the ECTT handles advertising, compared with the AVMS directive.

If the Minister needs any further convincing, he should surely note what the creators of the ECTT itself said. What did the Council of Europe say about it? It published a paper very recently—its 2018 report, Brexit: The Impact on the Audiovisual Sector—which says:

“In the absence of the COO principle, UK-based companies would face new barriers when broadcasting to Europe and could choose to relocate their headquarters to another member state, with the consequent direct negative effects on employment in the UK, and additional indirect losses for the UK creative economy”.


Even the creators of the ECTT do not appear to think of it as the solution to the problem. Faced with all this, does the Minister stick to the view that the ECTT is a similar system to the AVMS directive, that if we implement it there will be no, or no significant, impact, and that the status quo is being maintained? Surely he cannot agree with any of that.

I turn now to another aspect of the instrument that definitely does not meet the Government’s claim to be maintaining the status quo. By waiving any UK licence or notification requirements for on-demand services other than UK-based ones, they will intensify rather than mitigate the already uneven playing field between linear and the increasingly popular on-demand services. It is already bizarre that, in relation to non-EU so-called third countries, we rely on the host country’s regulator to provide a licence, and no UK licence is required, even if the services are being made available here in the UK.

Of course, I am prepared to admit that, in a sense, under the AVMS directive that is also true for on-demand service providers coming from the other EU 27 countries. But there is a major proviso: there is no formal legal dispute mechanism through the European Commission in the alternative arrangements. We will suddenly deny ourselves any formal dispute mechanism, at least for on-demand services coming to the UK from the EU 27 countries.

--- Later in debate ---

[Lord Ashton of Hyde]

I take that point, although I would not bet on it myself. On that point, I emphasise that the ministerial round tables took place not just once but regularly between August 2016 and March 2017, led by the Secretary of State, and in March and July in 2018, led by the Minister. But I take the point about explaining that. The difference between this and the SI we talked about the other day is the commercial sensitivity of the decisions that have to be made in moving head offices, the effect on the workforce, and so on.

I will address the general issue of whether we are being complacent about relying on the ECTT. We acknowledge that it might be possible that some services will require two licences—one for the purposes of the AVMSD, and one for Ofcom—because this is the case for services which are available in both ECTT and non-ECTT countries. In the way that these services are received—by satellite—it is difficult to exclude some countries from the distribution. There are about 500 Europe-facing services out of the 1,200 that Ofcom currently licenses. To date, we are aware of about 130 licences moving. It is fair to say that broadcasters are concerned about the risk of dual regulation, and are reluctant to rely on the ECTT—it is considered an untested convention, as EU law has been in place for so long. Nevertheless, I am sure noble Lords would agree that we should not ignore conventions and international agreements that we have signed up to, nor should the other countries which have signed them.

[Lord Foster of Bath]

If we follow the Minister’s logic, he said earlier that there are about 50 or 60 channels that are currently not EEA members but which are based there, and which will need a licence. They will get a six-month period, a point raised by the noble Lord, Lord Pannick. In view of what the Minister is saying, is it not quite likely that the number of channels that are in EEA EU countries will themselves decide to get an Ofcom licence? What assessment has he made of the number that may well choose to do that, and in considering that, is he aware that the latest information I have received is that only one company is considering basing all of its planning on the ECTT? Following from that, presumably there will potentially be a large number of people wanting licences from Ofcom, so can he also tell us how long it will take Ofcom to deal with each licence and whether it will be able to get through the requisite number in the six-month period?

[Lord Ashton of Hyde]

I do not agree with that premise. We have said that we will apply the ECTT, and in fact, this SI brings it into law.

[Lord Foster of Bath]

That was not the point I was making. The point is that I understand that it is quite likely that a number of companies that are providing services to the UK, which could rely on the ECTT to not require a licence, will, none the less, make the decision that it is in the best interests of their protection to seek such a licence from Ofcom. Presumably, they will be required to do it within the same six-month period, so there is a potential problem with the number of licences that Ofcom can handle.

[Lord Ashton of Hyde]

I am still not clear why, given that we have explained that we will accept ECTT countries, they think they should have to take the precautionary approach of getting a licence as well.

[Lord Foster of Bath]

I will give a specific example: it could be in relation to the differences that exist in the advertising regime, to pick up the point I raised earlier in my initial contribution about any changes that we might make. Given that there is not a formal legal redress system under the ECTT, they may feel it better to have a licence here and simply stick to the rules that we impose.

Electronic Communications and Wireless Telegraphy (Amendment etc.) (EU Exit) Regulations 2019

Lord Foster of Bath Excerpts

Wednesday 23rd January 2019 Grand Committee

[Lord Ashton of Hyde]

In answer to the noble Lord, Lord Adonis, I am informed that I can publish them.

[Lord Foster of Bath (LD)]

My Lords, following that interesting exchange, I pick up where the noble Lord, Lord Adonis, began, by pointing to what he described as the Minster’s “carefully woven” speech. I confess that I do not quite agree with that definition, as the speech appeared to be a cut-and-paste version of the speech that was given by the Minister in the other place, Margot James, on 7 January. Having gone through that speech, I noticed that odd words were missed out in the noble Lord’s version. In the other place, the Minister thought that there may well be a case for Ofcom remaining involved in BEREC—the word “well” was missing in the noble Lord’s version.

More important, we should recognise that over the last 30 years the industry that we are dealing with, including within it the telecoms industry, has developed from a monopoly situation to a highly competitive market, with annual revenues now in excess of £40 billion. It therefore forms an important part of our economy. Because of the way in which the industry is intrinsically linked to the European Union, there is no doubt in my mind that Brexit will have a significant impact on it, not least because a number of UK providers operate in other member states but have headquarters in the UK. I also believe that Brexit will have a significant impact on the regulatory regime under which those providers operate.

The Minister said, as indeed did Margot James in the other place, that the draft regulations will provide “clarity and certainty” both for the operators and for the regulator. I am somewhat inclined to disagree with that view. Indeed, the technical notice to which the Minister referred, which was issued way back on 13 September last year, explained that, irrespective of the outcome of the negotiations between the UK and the EU, the regulations would not have a significant impact on how businesses operate under the telecoms regulatory framework or on how consumers of telecoms services are protected within the UK. That claim is highly questionable.

Before I turn to those impacts, I want to seek clarification on consultation, the issue that has occupied a few minutes between the noble Lord, Lord Adonis, and the Minister. In the other place, the Minister for Digital and the Creative Industries, Margot James, said:

“All the changes that the draft regulations will make have been considered on a case-by-case basis and discussed with the regulator and stakeholders where possible”.—[Official Report, Commons, First Delegated Legislation Committee, 7/1/19; cols. 3-4.]


One has to assume that she believes that, as the noble Lord said only a few minutes ago, extensive consultation has taken place. The noble Lord told us about consultation with the Broadband Stakeholder Group and listed its membership. Interestingly, he did not mention the other part of the equation, which relates to the telecoms industry. There is a major body—the UK Competitive Telecommunications Association, or UKCTA—which represents very many of the key stakeholders in that field: Virgin Media, Vodafone, AT&T, the Post Office, Sky, TalkTalk; I could go on. If extensive consultation has taken place, one would assume that that key body, UKCTA, has been involved in the discussions. Yet I have received a note from UKCTA—I would be grateful if the Minister could explain whether this is correct—which says:

“UKCTA has not had any advance notice of, or discussions about, the SI despite regular meetings with DCMS, the most recent being on Monday 14th January”.


Can the Minister explain whether what I am told is incorrect, and if it is correct, can he explain why, despite the Government having claimed that there has been extensive consultation, this important body in the industry and the sector has not been consulted? On the impacts of these draft regulations, which the Government say they do not expect to be significantly—

[Lord Adonis]

The noble Lord has just raised an extremely important point about consultation. As he knows, in the discussions which the Grand Committee has been having on these no-deal regulations, the issue of inadequate consultation has been a running theme. As we probe beneath the regulations, significant issues of substance come to the fore when the Government tell us that the changes that are being made are technical. In fact, the actual change brought about by this regulation is substantial, because it entirely removes the European Commission from the whole process of deciding on competition issues.

The noble Lord is much closer to this sector than I am, and he has clearly had contact with the UK Competitive Telecommunications Association—I have to confess that I was not even aware of the existence of that body until he mentioned it, which is a huge lacuna in my understanding of public affairs. The noble Lord told us that it had not been consulted but that he has been speaking to it. Can he tell the Grand Committee what its view is of these regulations? Clearly, that is a material point, but it will also be a material point when the House itself comes to consider these regulations, also in the light of the further consultation responses which the Minister has kindly agreed to publish after the meeting of the Grand Committee.

[Lord Foster of Bath]

I am grateful to the noble Lord for his intervention. I assure him that I am more than happy to help to resolve the lacuna he has, and I will go even further and share with him a few thoughts that that association has about the draft regulations before us. I will take one particular one, which is its reaction, and the reactions of many other people, to the Government’s claim that the changes envisaged in these draft regulations will not significantly change the protections that are currently enjoyed by consumers of UK telecoms services. That claim is disputed, and I am keen to hear the Minister’s reaction to that, particularly in relation to the fundamental question of who will now supervise the regulator.

The UK regulator is Ofcom, which is probably the most highly regarded regulator throughout the whole of the European Union. It is a regulator in which most of us have great confidence, but from time to time it can make questionable decisions. Within the EU arrangements there are processes which provide for oversight of decisions of all national regulatory authorities, including Ofcom. These processes are covered under Regulation 7, particularly 7(1). As the Minister knows, they ensure oversight of a regulator’s decision by the Commission, and peer review by other EU regulators—in this case by members of BEREC, which the Minister has already referred to: the Body of European Regulators for Electronic Communications.

Post Brexit, the EU checks and balances against bad regulatory decisions will clearly fall away, yet safeguards to ensure regulatory certainty, and safeguards against bad regulatory decisions, are critical to ensuring that businesses in this sector can have the confidence to make major investments. Can the Minister provide a clear explanation of how, under these draft regulations, Ofcom will be held to account post Brexit? Can he confirm that, for instance, the Digital Economy Act, which went through your Lordships’ House some while ago, has weakened the telecoms appeal regime and that all that appears to be left for those who believe that an Ofcom decision is wrong is the judicial review process? As the Minister said, in certain cases there might also be the opportunity to go to the Competition Appeal Tribunal, but in the majority of cases it would appear that we are left with only judicial review, which, as noble Lords know, has undergone some quite significant and worrying changes in recent times. Therefore, does the Minister agree that this is a significant diminution of the protections against bad decisions by the regulator, however infrequently they are likely to occur?

--- Later in debate ---

[Lord Adonis]

My Lords, the noble Lord is making a very powerful argument about the weakness of consultation and the problems that will be caused by these regulations. Is he suggesting that Ofcom itself said to him that it was not content with these regulations in their current form and that it is worried about the regime that will apply after a no-deal Brexit? That would be a very serious state of affairs if that were the case.

[Lord Foster of Bath]

That would be taking the interpretation of the conversations and correspondence I have had with Ofcom a step too far. I do not think that Ofcom feels that it is its place to comment on the rightness or otherwise of the regulations. However, it is pointing out very clearly that when these regulations come into force, its ability to do the work to the level that it wishes will undoubtedly be diminished because of its inability to influence future EU legislation which will have a significant bearing on companies that operate in this country. Equally—I shall come on to this in a second—its ability to engage in discussion and debate with fellow regulators in this field across the 27 EU countries will depend on what happens now.

I hope that the Minister will agree to extend his remit just a little in this discussion. It would be enormously helpful to hear from him what he understands the situation will be not only in relation to a no-deal Brexit but, if the Prime Minister is successful in achieving her deal, what it will be during the implementation period and then after it. So there are three possible scenarios in which it would be helpful to learn from the Minister how he thinks the arrangements will operate.

It might help him if I shared with him my own understanding of what the situation is likely to be and possibly made his response much briefer, because he could then say that I have got it right. In the debate on 7 January in the other place, Margot James acknowledged that,

“the Government recognise that Ofcom would benefit from the continued exchange of best practice with other regulators, and from the exchange of information about telecoms matters more generally”.

She went on to say:

“Ofcom intends to seek observer status after the UK has exited the EU”.—[Official Report, Commons, Delegated Legislation Committee, 7/1/19; col. 6.]


Can the Minister confirm that this is a huge oversimplification of the process that now applies in the event of a no-deal Brexit? In the past, it would have been a relatively simple matter for Ofcom to seek observer status. Under the rules that applied until December 2018, just a month ago, BEREC could simply have invited Ofcom to have observer status and that would have been fine, but the BEREC regulations have changed and are now very different. I am sure that the Minister will confirm that, under those regulations, the only possibility of Ofcom having even observer status on BEREC is if the European Union has agreed to it. That would require the UK Government specifically to negotiate such an arrangement with the EU. I would be grateful if the Minister could confirm that that is the case, because it is very different from saying that Ofcom will seek observer status. The Government will have to engage positively in negotiations with the European Union to bring that about.

Can the Minister also confirm his understanding of the position of Switzerland? It is a very good example, because its regulator was an observer member of BEREC. With the change in rules in December 2018, it no longer has observer status and the Swiss Government are currently in extensive negotiations with the European Union to see whether agreement can be reached for that to happen—there is no certainty that it will, any more than there will be certainty, for reasons that I shall come on to in a few minutes, about an agreement on this matter being reached between the UK Government and the European Union.

I accept that the Minister is slightly stretching the issue, but I hope that he will confirm that under transitional arrangements of the withdrawal agreement—if the Prime Minister is successful in getting her deal through—the key provision is Article 128 along, in part, with Article 8, which states clearly the UK has no right to participate in decision-making or governance of any EU bodies and no right to attend meetings. During the transition period, there will no opportunity for Ofcom to be involved—with, however, one caveat.

The caveat comes in two parts. It says that there are exceptions: Ofcom may be allowed to pop along for the odd meeting and to participate in discussions but not have a vote, but only in the very limited case where BEREC is discussing a specific case that relates to the United Kingdom or if, by having Ofcom present, it would be beneficial to the EU as a whole. That is a decision for it to make. I would be grateful if the Minister could clarify the point. My understanding is that if the Prime Minister is successful in getting a deal, during the transition phase, the position of Ofcom will be even worse than it would be if it had observer status. That, I believe, would be significantly detrimental to the UK. Post Brexit, if the Prime Minister is successful with her deal, clearly the situation will be somewhat uncertain because it will depend on the interpretation of and success of the negotiations. However, the draft political declaration covers the issue in paragraphs 33 to 35 and 40 to 42. It would be helpful to hear the Minister’s views on how he thinks that this will work out.

My final point is simply this. All of this is dependent on an agreement. Whether we are in the situation of a no-deal Brexit as regards the regulations before us or even if the Prime Minister achieves her deal and we have a transition period with an exit being subject to whatever arrangements have been made, it will all depend on whether the UK has achieved a data adequacy agreement with the European Union. Nothing can happen unless we have one because it is absolutely crucial. I could read out to noble Lords many learned articles about whether it would be possible for the UK to get a data adequacy agreement easily or even to get one at all. For instance, criticisms are already raging about the impact of the investigatory powers legislation, the GDPR regulations, the e-commerce and e-privacy regulations and so on. Whether those will enable us to get a data adequacy regulation or prevent us doing so is very unclear indeed.

I have raised some important points and I look forward to the Minister’s response. Above all, however, he must give us a clear understanding of the Government’s view about the likelihood of us getting a data adequacy agreement. The Minister in the other place made it absolutely clear that if the Prime Minister gets her deal and we have a transition period of almost two years, it will take the whole of those two years to get agreement on data adequacy. She went on to say that if we have a no-deal Brexit, the chances are that getting such an agreement will take even longer. Does that not mean that all of the claims that there will be no significant impact as regards these regulations on people in the UK, both service providers and the regulator, really do not stack up?

[Lord Adonis]

The noble Lord has referred to the data adequacy agreement, which is clearly an important issue. What is his understanding of what the impact would be on the United Kingdom if we did not secure such an agreement in the event of a no-deal Brexit? Presumably it will be quite a tall order to get such an agreement in the next eight weeks.

[Lord Foster of Bath]

Let me give the noble Lord one example. I said earlier that for Ofcom to become a member of BEREC, it is no longer a case of it going to BEREC and saying, “Please can we have observer status?” It will require a negotiated agreement between the UK and the EU. In my view and those I have spoken to about this, the agreement will not be reached unless we have an adequacy agreement. If the adequacy agreement is going to take at least two years and may not be achieved anyway, then during the whole of that period there is no way of Ofcom performing any role whatever within BEREC, for example.

[Lord Adonis]

Does the Minister want to respond to the noble Lord, Lord Foster, before I and my noble friend speak?

--- Later in debate ---

[Lord Ashton of Hyde]

The noble Lord asked a lot of questions. Underlying it all is the fact that this SI is there in the event of no deal. Of course, it is not surprising that references to and some of the effects of being in the EU are going to change. The essential point of the SI is that telecoms regulation is performed by national regulatory authorities with EU supervision. The issue is whether the supervision element is significant. The whole point of the SI is to make the regulatory system the same after we leave. The noble Lord made a lot of mileage out of whether we would remain a member of BEREC—

[Lord Foster of Bath]

The issue is not about the regulatory regime staying the same but about who is regulating the regulator. I hope that the Minister will come on to that.

[Lord Ashton of Hyde]

Yes, absolutely. I will come on to that because nobody regulates the regulator today.

The noble Lord asked me to go beyond no deal to what happens to our membership of BEREC if we have a negotiated deal with an implementation period. During that period, the UK will no longer be a member state of the EU but, as is set out in the terms of the withdrawal agreement, common rules will remain in place. That is why we expect Ofcom to continue to participate in BEREC in line with the terms of the agreement, in the way that the noble Lord, Lord Foster, mentioned.

I point out to noble Lords that there is every reason to suppose that the EU would want that, because Ofcom is one of the leading telecoms regulators in Europe—if not the leading one. The interchange between Ofcom and other European regulators has been extremely beneficial, not only for them but for this country. There is every reason to think that they would wish to continue that—

[Lord Foster of Bath]

I am sorry. The noble Lord is entitled to assert whatever he likes, but I specifically read out a section from the withdrawal agreement, which says, and I repeat, that the UK has no right to participate in decision-making or governance in any EU body of any type and no right to attend meetings. I have given the two caveats: the first relates to any discussion that,

“concerns individual acts addressed to the UK”,

or persons residing or established in the UK; and the second is that the presence of the United Kingdom is,

“necessary and in the interests of the Union”.

It is all very well for the Minister to say that he hopes that it will be perfectly all right and that the EU will have us for other things, but a specific clause in the withdrawal agreement says the opposite.

[Lord Ashton of Hyde]

I was going to read out that exact clause to make my point. If it is,

“in the interests of the Union”,

or where the discussion concerns acts addressed to the UK and its citizens, it provides that the UK will continue to participate in EU agencies and bodies. I think that those two things apply and, as I was saying, the reason why I think that is the mutual benefit Ofcom has. It is a world-leading, well-respected regulator. However, I accept that it does not have the right to do these things. That is not surprising, because we are leaving the EU. Why should it have the right? I think that we have come to stalemate on that point.

The noble Lord mentioned the fact that BEREC rules have changed and that it is not just a question of having been invited to be an observer. He is absolutely right: either there has to be an agreement with the EU as part of a future economic partnership or a bilateral agreement can facilitate it. Under that facility, which the EU has deliberately put in the new BEREC regulations, Ofcom can—under a bilateral agreement—be a member of the board of regulators, the working groups and the management board.

I will move on to data adequacy later. The important issue that both noble Lords mentioned is, crudely put, whether the regulator will still be regulated. The European Commission does not regulate Ofcom. It has a supervisory power, which is principally designed to ensure the consistency of regulatory practices across the EU, in order to contribute to the development of the single market. It is quite understandable that the EU should want to harmonise national regulators to facilitate the single market. Of course, if we leave the EU, that will no longer apply. The role of the European Commission in telecoms regulation is unique and should not be compared to EU scrutiny powers over other UK economic regulators. There is sufficient accountability in the domestic system, because Ofcom decisions can be challenged in the courts—of course, the primary area in which they are challenged is in the statutory appeal before the Competition Appeal Tribunal.

In fact, the withdrawal Act is not a vehicle for policy changes, as I am sure the noble Lord, Lord Adonis, will remind us. We think that, under the terms of the Act, recreating a domestic equivalent for the oversight of Ofcom’s decisions will be considered going beyond what is appropriate to correct the deficiency.

[Lord Ashton of Hyde]

I do not think that you can argue it both ways. Of course we will not be involved in the EU supervision, given that the whole point of the supervision is to affect the European single market, of which we will not be a part. To set up a completely new supervisory authority, with a completely different function from what it had before, would, I think, be beyond the powers of the withdrawal Act—it will obviously be different if we are not talking about EU supervision to maintain regulatory harmony.

I come to both noble Lords’ points about the consultation, because I do not believe that they are true. The noble Lord, Lord Foster, made a reference to the UKCTA—its members, by the way, are also members of the BSG—and read out the names of a number of companies that are part of the group which facilitated the round tables. There may be a disagreement with us, as my information is that it was asked to at least one of the round tables. It has met DCMS and has had the opportunity to raise concerns about the SI—as he said, it met DCMS only very recently—and of course our technical notice explains some of the problems and issues about telecoms regulation when we leave the EU, so it is not as though it did not mention it. Therefore, some of that body’s members have sat round the table with DCMS; they have been asked. There is no requirement to send the draft SI to industry, but it had every opportunity to contact DCMS and every opportunity to raise it at the meetings that the noble Lord referred to. We have ongoing and good relations with all parts of the sector, so there is absolutely no reason why, if there is a problem, it could not be raised with DCMS. I do not accept that in this case the consultation has been insufficient. We have had regular and continued consultation with the industry, not only with the telecoms sector but also with consumers and Ofcom itself.

[Lord Foster of Bath]

I do not think that it is necessary to pursue this; I am merely making a simple request. Given that this body says that it has not been consulted—I entirely accept the Minister’s point that the draft regulations have been published and so it could have read them and perhaps could have come forward and said, “Can we discuss this?”—can the Minister just give the Grand Committee an assurance that it will now be invited to come and have a discussion about its concerns on these draft regulations? Then we can move on.

[Lord Ashton of Hyde]

It is of course a bit late to consult it on the regulations, but we will definitely do so in future. I will try to find out where we have a disagreement on fact—whether it was able to be consulted—and will let the noble Lord know about that. I appreciate his allowing me to move on.

There is an important issue about data adequacy, which the noble Lord, Lord Adonis, mentioned. He asked whether it would happen in the next eight weeks. Of course, what he does not realise is that it cannot happen in the next eight weeks, because you cannot have data adequacy until you are a third country. You will never get data adequacy until exit day; when that will be is another matter. Data adequacy is an important issue. We have said that there will be no restriction on personal data flowing from the UK to the EU; the issue is entirely about personal data flowing from the EU to the UK. What are we doing about it? We have spent a lot of time talking to member states, explaining our mutual interest in having data adequacy. We should not forget that we start from the exact same position, because we have implemented the GDPR. We are therefore in a good position.

The EU has indicated—it has not said it formally—that it will be ready to discuss data adequacy as soon as exit day comes. We are ready to do that, but in the meantime there is a possibility that there will be a gap between when we leave the EU and whenever we get data adequacy. To cope with that gap there are mitigations and ways round it—standard contractual conditions for contracts, for example. We are ramping up the speed of publication and are making industry aware of this. There will be a significant amount of progress on that over the next few weeks. It is always frustrating when you spend time talking to trade bodies—we are talking to about 50 companies a week at the moment, and we will double that—and, despite all that work, people still say that they were not aware of it. We saw that with the GDPR. However, we have a publicity campaign; work is going on to try to make people aware and, for example, to encourage them visit the ICO website, which gives examples of ways to mitigate in case of a gap.

--- Later in debate ---

[Lord Ashton of Hyde]

I am sorry that the noble Lord is not looking forward to my reply—he would not be the only one. Let me answer some of his points.

He asked how many hours have been put into the production of the SI. I cannot tell him exactly, but we have been working on it for about 18 months to allow for the engagement of stakeholders and other government departments and the appropriate legal checks. The consultation might not be to everyone’s liking in the sense that it was not formal, but it was real and I shall share some more information with the Committee about who turned up. It was real and, for the reasons that the noble Lord, Lord Adonis, gave, we may be vindicated in our decision not to include another regulator on top of Ofcom. I think I have covered that.

When the noble Lord, Lord Griffiths, talks about whether it is regulation or supervision and a lessening in oversight, the point to bear in mind is that telecoms have always been regulated by national regulators. The EU Commission has a very particular role in this connected with EU matters—namely, the single market. It is obvious that if we are no longer in the EU and the single market, not only will that supervisory function not be performed by the EU because we will not be in it but there will not be a harmonisation problem.

[Lord Foster of Bath]

I said that I would not intervene but I am intervening. The Minister is well aware that the financial consequences of telecoms companies, for example, in the UK, which do not abide by regulations imposed by the European Union will be significant. Even following Brexit, there will be huge impacts, one upon another. Therefore, to suggest that Ofcom does not have to have regard to that is just wrong.

[Lord Ashton of Hyde]

I may have missed the noble Lord’s point. The regulatory framework set up through EU directives and regulations has been implemented in UK law and is administered and regulated by the UK. It will change, so in certain cases we have provided that Ofcom, the regulator, will bear in mind the current status of EU directives but in future will have the liberty to move away from them, which is only to be expected because we will not be in the EU. Therefore, we have taken account of EU law as we are trying to maintain the existing regulatory framework, although I accept that in future we might move away from it. The noble Lord, Lord Foster, says that it is changing. It is, and the basis of this SI is that we are leaving the EU, so there is change.

The noble Lord, Lord Griffiths, asked about paragraph 7 of the Explanatory Memorandum: why Ofcom may exchange information with the EU Commission or BEREC. The reason is that it will be given the option to do so if it is in the best interests of this country. It would be perverse to deny it the option to do that, so we are giving it that power. Both noble Lords rightly made the point that it will not, ex officio, be a member of BEREC. We expect it to be either an observer or a member of the various groups that I mentioned, and we hope that it will be. Whether it is or is not, we think it would often be in the regulatory interests of this country to exchange information. I think it is extremely likely that it would do so and I am sure that regulatory information will flow the other way. It is the subjunctive, I feel, in answer to the noble Lord’s question.

I am grateful for the consideration of the instrument and expect a very brief further discussion—consultation, possibly—later; I have made commitments on that. We think that the amendments contained in the SI are essential to ensure legal clarity, to reduce litigation risk and to protect consumers. Beyond that, we have agreed on the necessity for the regime to exist to correct deficiencies in retained EU law. On that basis, I hope that noble Lords will be able to approve the consideration of the regulation.

Gambling: Advertising Ban

Lord Foster of Bath Excerpts

Wednesday 16th January 2019 Lords Chamber

[Lord Ashton of Hyde]

My Lords, I now understand what the noble Lord meant by that last bit. We take the problem of advertising gambling seriously; that is why we made several changes in the review. There was a multi-million pound responsible gambling advertising campaign. The responsible gambling message now appears throughout all TV advertisements. There are tougher sanctions for breaches of advertising codes and new guidance on protecting vulnerable people. We will consider how those significant changes have bedded in. The Committee of Advertising Practice also published strengthened guidance with significant new provisions, including restricting calls such as “Bet now” during sporting events. As I said yesterday, though, evidence is important when making policy. That is why GambleAware has commissioned substantial research on the impact of marketing advertising on children and other vulnerable people. I assure my noble friend that that will be undertaken soon.

[Lord Foster of Bath (LD)]

My Lords, should the main focus of attention not be online? After all, that is where 80% of the gambling advertising spend goes. It is now leading to something like 10% of all 11 to 16 year-olds following gambling companies on social media. Does the Minister agree that we need to take more action to tackle online gambling advertising, and build on the new proposals from the Gambling Commission so that we can develop far tougher and more effective age-verification checks?

[Lord Ashton of Hyde]

I agree with the noble Lord. The reason I did not mention it is that the Question referred specifically to TV advertising. There are features that can be used to hide and avoid gambling advertising online, such as different settings, and GambleAware has advice on how to do that. We are monitoring this and taking action through the Government’s digital charter, but the noble Lord is right: online gambling is the largest sector; 37% of gambling takes place online.

Mobile Networks: Resilience

Lord Foster of Bath Excerpts

Tuesday 11th December 2018 Lords Chamber

[Lord Ashton of Hyde]

I assure my noble friend that my department, which is responsible for telecoms, will continue to work with the Electronic Communications Resilience and Response Group. By coincidence, there is a meeting of that group next week, from which we will find out exactly what happened with the O2 outage and the emergency response, which worked well. I can assure my noble friend that we will continue with that, whatever happens with Brexit.

[Lord Foster of Bath (LD)]

My Lords, any measures that improve the resilience of mobile connectivity for those that already have it will be welcome but sadly, many people, particularly in rural areas, have no or poor mobile connectivity. What steps are the Government taking to help those people? In particular, do they intend to place on the winner of the auction of the 700 megahertz spectrum a rural coverage obligation or, better still, a RuralFirst obligation?

[Lord Ashton of Hyde]

As the noble Lord knows, the Government have made huge progress in extending the availability of both broadband and mobile connectivity. The Future Telecoms Infrastructure Review showed the way to increasing the amount of fibre optic cable across the country, which is currently behind the European average, and we now plan to do that. One of its features is the “outside in” policy, which will enable rural areas to have priority in the rolling out of fibre-optic cable.

Tourism: Regulation

Lord Foster of Bath Excerpts

Tuesday 4th December 2018 Lords Chamber

[Lord Ashton of Hyde]

I am aware of my noble friend’s interest in this matter—we know that she has referred to the issue of leases before. However, a lease is a contract and the remedies for breach of that contract are the same as for a breach of any other contract. There is a potential £20,000 fine for hosts who exceed the 90-day limit, and we think that is a strong disincentive.

[Lord Foster of Bath (LD)]

My Lords, further to the question from the noble Baroness, Lady Gardner, I am grateful that the Government have belatedly identified the loophole whereby some second-home owners in tourist destinations avoid paying council tax by declaring that their property is available for letting but then avoid paying business rates by making no effort to let it. Can we be assured that, following the end of the consultation next month, the Government will act rapidly to close this loophole and bring benefit to legitimate holiday letting businesses, to local councils and to local communities, and that they will do so in time for next summer’s season?

[Lord Ashton of Hyde]

I am informed by my noble friend sitting next to me, whose responsibility this is, that the department is looking at that precise question.

Television Licences: Over 75s

Lord Foster of Bath Excerpts

Tuesday 27th November 2018 Lords Chamber

[Lord Ashton of Hyde]

The director-general of the BBC should be proud when he looks at himself in the mirror. The BBC is a national institution and the Government support it. We made a deal with it when the new charter was put in place. It is a £5 billion organisation and is more than capable of delivering on this agreement.

[Lord Foster of Bath (LD)]

My Lords, in this age of multichannel provision, our public service broadcasters—not least the BBC—are crucial in ensuring the provision of high-quality, British programming and news that we can rely on. Yet if the BBC does not go ahead with cutting the over-75 licence fee concession, its own content will be dramatically cut. Why should the BBC be forced to make a social policy decision that should be the remit of government? If the Government want the fee concession for over-75s protected then surely they should pay for it, not the BBC.

[Lord Ashton of Hyde]

The noble Lord talks about news but other public service broadcasters have the same duty to provide impartial news. I completely agree with him that what the BBC produces is a benefit, and it is a tribute to it. Other public service broadcasters have the same duty but they do not have a £3.8 billion head start from the taxpayer.