Ofcom’s New CEO Hints at UK Telecoms and Broadband Deregulation

BT might be pleased to hear that the new boss of the United Kingdom’s communications and media regulator, Sharon White, is considering whether the entry of “newer players and technology” into the country’s Internet access and telecoms market should result in a “lighter approach” to regulation.

At the end of last year Sharon White, an ex-Treasury official and economics graduate with 25 years’ of experience working in the public sector (albeit little telecoms knowledge), was formally announced to take over from Ed Richards in the technically demanding role of Chief Executive Officer (CEO) at Ofcom (here).

Officially Ms White has only just taken office, replacing acting CEO Steve Unger who briefly held the reins until March 2015, and as a result everybody has been keen to know her viewpoint on some of the markets most pressing issues.

Ms White’s appointment couldn’t have come at less stable time for the industry, which is currently going through a period of significant top-level convergence in the broadband and mobile markets. BT is merging with EE, Three UK is acquiring O2, Sky Broadband is preparing to launch a Mobile service and Vodafone are about to re-enter the consumer fixed line market etc.

At the same time the way we all access and view Television is continuing to change, largely thanks to the new Internet-based platforms like Netflix, NOW TV and so forth, not to mention how TV content itself is licenced and sold (BT Sport vs Sky Sport etc.).

Naturally Ofcom needs to move with the times and to that end the regulator has already launched its first major Strategic Review for a decade (here), which among other things will have to consider what changes might be necessary in order to keep the market fair in an environment where BT’s merger with EE could give the operator a big advantage.

But those calling for more regulation of BT may be displeased to hear that White’s direction is already hinting at a more pro-deregulation approach to boosting competition, which may dishearten those who continue to hope that Openreach, which maintains BT’s national fixed line telecoms network, might someday become a completely separate company.

Sharon White, Ofcom’s CEO, said (FT Paywall):

“Convergence has started to happen in a very rapid timeframe, be it fixed and mobile [telecoms] or the blurring [of] the distinctions between the traditional telco and traditional media company. [Ofcom will] see if there are ways to promote competition. Are there areas we can deregulate? But with the consumer at the centre of it all.

One of the big issues in my in-tray is going to be the internet. [The regulatory response] is something we are going to have to look closely at. We will certainly look at whether there is scope for a lighter approach given the entry of newer players and technology that we wouldn’t have dreamt of a few years ago.”

White also hinted that Ofcom would look at the question of “whether the pay-TV world needs a fundamental rethink“, although this won’t take place until after the regulator has completed its on-going investigation into how the Premier League sells their live TV and related rights for football matches (here).

Readers might recall that Virgin Media originally started the complaint after it aired concerns about how the costs for related content could have become too high. Indeed, in February 2015, Sky and BT broke a new record by spending £5.136bn on a huge Premier League TV Rights Deal (here). BT continues to offer much of this content for free to their existing broadband subscribers.

However White also cautioned that Ofcom were not planning a “fundamental review of pay-TV“, which suggests that if a probe does emerge then it will probably remain limited to specific aspects of Pay-TV content or services.

But perhaps White’s biggest challenge will be in learning to understand and navigate the complex world of telecoms and Internet technology. Understanding how computer networks and the Internet actually work is a key requirement for being able to interpret and set new policy, yet White’s seeming lack of experience in this area could be a hindrance.

As a side note, White is also the wife of Robert Chote, Head of the Office for Budget Responsibility (OBR). In addition, White does not appear to have any particular affiliation and has served under both past and present Government’s without any major incident.