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Fibre ISPs Take Note – UK Consults on New EU Electronic Comms Code

Friday, July 19th, 2019 (8:31 am) - Score 1,391
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The Government’s Department for Digital, Culture, Media & Sport (DCMS) has begun consulting on its plan to implement the new European Electronic Communications Code (EECC) into UK law, which includes new provisions that are intended to boost the rollout of Gigabit speed “full fibre” (FTTP) broadband and 5G mobile networks.

The new EECC, which was finalised a year ago in the EU (here), is similar to the Electronic Communications Code (ECC) in the United Kingdom in that it also governs the rules around how telecoms (mobile, phone and broadband) operators access public and private land in order to build new networks, although it also covers a lot of other areas too. There’s also some crossover with the UK’s new 10Mbps Universal Service Obligation (USO).

At this point it’s worth noting that the UK revised its own ECC during 2017 with the same purpose in mind (here) and last year’s Future Telecoms Infrastructure Review (FTIR) proposed a whole raft of changes that would go even further. Much of the latter is still going through the consultation and early implementation phase.

Nevertheless there are some aspects of the EECC that aren’t yet fully present in UK law.

The new EECC aims to..

Enhance the deployment of 5G networks by ensuring the availability of 5G radio spectrum by end of 2020 in the EU and providing operators with predictability for at least 20 years in terms of spectrum licensing; including on the basis of better coordination of planned radio spectrum assignments.

Facilitate the roll-out of new, very high capacity fixed networks by making rules for co-investment more predictable and promoting risk sharing in the deployment of very high capacity networks; promoting sustainable competition for the benefit of consumers, with a regulatory emphasis on the real bottlenecks, such as wiring, ducts and cables inside buildings; and a specific regulatory regime for wholesale only operators.

Moreover, the new rules will also ensure closer cooperation between the Commission and the Body of European Regulators for Electronic Communications (includes Ofcom in the UK) in supervising measures related to the new key access provisions of co-investment and symmetric regulation.

Benefit and protect consumers, irrespective of whether end-users communicate through traditional (calls, sms) or web-based services (Skype, WhatsApp, etc.) by:

* ensuring that all citizens have access to affordable communications services, including universally available internet access, for services such as egovernment, online banking or video calls;
* ensuring that international calls within the EU will not cost more than 19 cents per minute, while making sure that the new rules would not distort competition, innovation and investment;
* giving equivalent access to communications for end-users with disabilities;
* promoting better tariff transparency and comparison of contractual offers;
* guaranteeing better security against hacking, malware, etc.;
* better protecting consumers subscribing to bundled service packages;
* making it easier to change service provider and keep the same phone number, including rules for compensations if the process goes wrong or takes too long;
* increasing protection of citizens in emergency situations, including retrieving more accurate caller location in emergency situations, broadening emergency communications to text messaging and video calls, and establishing a system to transmit public warnings on mobile phones.

Suffice to say that there are a fair few areas where the planned UK policies and the new EU EECC directive crossover, which is why the Government are proposing to transpose the new directive verbatim into UK law and align with existing conventions (e.g. FTIR / ECC) where there is a choice (i.e. transposing the minimum requirements of the directive).

However there are a few new changes too, such as the addition of processes for the regulator (Ofcom) to make binding voluntary commitments by operators as alternatives to ex ante Significant Market Power (SMP) obligations where appropriate (i.e. to incentivise new network deployment as far as possible).

According to the FTIR, with the right changes approximately 80% of households are considered “commercially viable” to roll out high speed broadband connectivity (in our view that’s highly optimistic, if only looking at full fibre networks) and about 10% will remain commercially unviable and for which government intervention will be required (i.e. “additional funding” of around £3bn to £5bn). We think the gap will be much bigger.

Changes in spectrum regulation are also proposed under the EECC. Under the new approach future spectrum licence enforcement conditions will need to include a “use it or lose it” clause and allow the use of the 26.5-27.5GHz of the 26GHz band for mobile (subject to various factors like market demand and the need to protect essential defence functions etc.). The latter is expected to be used by 5G services.

Impact Assessment of the UK’s Preferred EECC Approach

We assume the industry will deploy in a portion (around 61% with applied sensitivity analysis) of the areas of the UK that the FTIR identified can support commercial roll out of single fibre networks (the intervention area considered for the Impact Assessment), which are estimated to be 6.1% – 18.8% of total UK households. This option should help to address the hold-up problem within these areas of the UK.

‘Hold-up areas’ are defined as areas in which premises will be in harder to reach, rural or other costly areas where investment in Fibre To The Premises (FTTP) may be able to support at least one commercially funded network but suffer from operators holding off their investments due to strategic uncertainties.

The industry will face a capital and operational expenditure cost for deploying in the intervention area, which will be indirect costs. There are also likely to be some familiarisation costs as businesses understand and implement the interested articles. Ofcom and the Government will also incur the cost of implementing the EECC.

Best Estimate for Predicted Net Benefit: £2,593.5m

Best Estimate for Predicted Total Cost: £1,096.9m

Given its scope the Government’s new consultation, which is open for feedback until 10th September 2019, should be of interest to all broadband ISPs and mobile network operators. EU member states will also have until 21st December 2020 to implement the directive into domestic law.

One obvious caveat here is the still significant uncertainty around Brexit, which may or may not make much of the above irrelevant over the next few months. On the other hand the Government seems to support a lot of the new changes and so we suspect that, even in the event of a no-deal outcome, much of it may still survive.

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Mark Jackson
By Mark Jackson
Mark is a professional technology writer, IT consultant and computer engineer from Dorset (England), he also founded ISPreview in 1999 and enjoys analysing the latest telecoms and broadband developments. Find me on Twitter, , Facebook and Linkedin.
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