The provisional trade agreement between the UK and EU includes telecommunications services. Both sides are looking to have continuity with the past and maintain relatively similar regulatory frameworks.
Ofcom will be able to regulate markets in a more flexible way, without committing to the five-year timeframe for market reviews. However, there will need to be an explicit agreement between the EU and the UK for Ofcom to resume its work with BEREC.
The EU Regulation on roaming no longer applies to UK operators. This creates the possibility that roaming surcharges could return for UK consumers travelling to the EU, and vice versa. However, there may be incentives for operators on both sides to continue with the current regime, and changes are unlikely to reoccur in the short term.
Both parties are committed to keep data flows as seamless as possible. The EU agreed to a transition period during which the UK is treated like an EU country with regard to the transfer of personal data, and the European Commission is likely to reach an adequacy decision quickly due to the similarities of data protection frameworks.
The UK and EU will seek to maintain relatively similar regulatory frameworks
Telecommunications services are covered in Section 4 of the trade agreement between the EU and the UK. The key takeaway is that providers from either side can operate in the other territory in the same way as a local entity. The parties commit to non-discriminatory treatment of operators from the other side. This should ensure that no changes are needed for UK operators with a presence in the EU (e.g. Vodafone) and vice versa (e.g. O2, which is owned by Telefonica). Similarly, operators looking to build a new presence either in the EU or the UK should be able to do so easily, since the two parties will refrain from requiring prior formal authorisation for the provision of telecommunications services. Foreign shareholding is explicitly unrestricted, in that both parties will not impose joint-venture requirements or limit the participation of foreign capital (e.g. by setting a cap on individual or aggregate foreign shareholding).
The EU and the UK have committed to significant alignment on the regulatory framework for the telecoms sector. Such alignment is expected to be straightforward, since neither side is likely to depart from an approach whereby service provision is left to the market, while the state’s role is limited to regulating the sector. Both parties shall maintain regulatory authorities with adequate independence and impartiality, and prevent anti-competitive behaviour particularly from ‘major suppliers’. The most noteworthy points of the agreement are perhaps the commitment to open internet access and to ensure the confidentiality of communications and of the related traffic data. It is worth noting that the UK had already passed regulations in 2018 to retain a framework on open internet access after its departure from the EU. With regard to the confidentiality of communications, it is likely that future rules in the UK will have to be similar to the current European ePrivacy Directive and its future amendments. This could limit public authorities’ ability to obtain communications data from telecoms operators, and to set out exceptions to data encryption.
Ofcom will have freedom when it comes to reviewing regulated markets, though it will have to seek a new relationship with BEREC
Despite its imminent departure from the EU at the time, the UK transposed into law the provisions of the new European Electronic Communications Code (EECC), which came into force on 20 December 2020. However, the UK now has freedom to diverge from the EECC as long as it fulfils the requirements of the trade deal. One aspect in which there could be divergence is the timeframe for each cycle of market reviews, which the EECC increased to five years (it was three years under the previous framework). While Ofcom is using a five-year timeframe for the next wholesale fixed market review, the regulator is already considering an even longer period to provide the market with regulatory certainty. For instance, in a statement of December 2020, Ofcom’s chief executive Melanie Dawes noted that the rules Ofcom will set out in March 2021 will apply for “at least” five years, however stressed that Ofcom needed to take into account that the payback period for fibre investment can be longer than 10 years and would refrain from introducing cost-based price controls for fibre until 2031.
Ofcom and European regulators will also have to find new ways to work together, since the UK regulator is no longer part of the Body of European Regulators for Electronic Communications (BEREC). Ofcom has been heavily involved within BEREC (and its predecessor, the European Regulators Group), with Ofcom’s staff playing a leading role in the work programme. Stakeholders and members of the UK Parliament have also highlighted the importance of continued cooperation, and of Ofcom’s ability to retain influence over the European regulatory process.
In October 2016, the previous chief executive of Ofcom, Sharon White, noted that the involvement of European companies in the UK market, and vice versa, makes a strong case for cooperation to continue, and that Ofcom wished to be as closely involved as possible. Until 31 December 2020, Ofcom also stated that it will continue to engage with BEREC and European counterparts to share best practices. The latest BEREC Regulation, adopted in December 2018, allows regulators of a third country to participate in the work of BEREC if that country strikes an agreement with the EU to that effect. In 2019, BEREC established working arrangements with the NRAs of Albania, Bosnia & Herzegovina, Iceland, Kosovo, Liechtenstein, Montenegro, North Macedonia, Norway, and Serbia – though it stopped admitting Switzerland to its meetings because there is no specific agreement between the EU and Switzerland on this aspect. Since the EU–UK agreement only has a generic reference to regulatory cooperation on a voluntary basis, there will need to be a specific deal between the two parties for Ofcom to work with BEREC again. Given the mutual desire of Ofcom and BEREC to maintain a relationship, it is likely that both parties will reach an agreement.
Roam-Like-At-Home is no longer guaranteed, but UK operators are committed to keeping it in place
The trade agreement does not extend the validity of the Roam-Like-At-Home regime (RLAH), meaning that in theory UK operators could reintroduce retail surcharges for roamers to the EU, and vice versa. However, the agreement commits the parties to “cooperate on promoting transparent and reasonable rates” for roaming, in order to promote the growth of trade and enhance consumer welfare. Both parties will ensure that end users have clear visibility of the roaming charges they might incur.
Despite the removal of the regulatory safety net, operators on both sides have so far refrained from reintroducing roaming surcharges. UK operators have all stated they have no plans to do so, and several operators in some of the largest EU countries continue to apply the RLAH regime to the UK. COVID-19 has resulted in a significant fall in international travel, so it is unclear whether operators will revise their plans at a later stage. It is possible that roaming surcharges for UK consumers could return for countries where there are no operators of the same group (e.g. Vodafone or Three) or where there is a clear traffic imbalance, which could give an incentive to local operators to raise wholesale roaming prices.
The UK and EU are working to ensure data flows remain as seamless as possible
The UK and the EU have committed to make sure that data flows continue between the two parties. Section III of the agreement, covering digital trade, commits the two parties to ensure continuity to facilitate trade in the digital economy. The agreement rules out restrictions such as data localisation measures, or requiring the use of computing facilities in one party’s territory, or prohibiting storage or processing of data in the other party’s territory. These provisions will be reviewed three years after the agreement comes into force.
The parties have agreed a transition period between the entry into force of the trade deal and the date when the EC declares the UK an adequate destination for personal data coming from the EU. This transition period will last up to four months, with a possible extension by another two months unless one party objects to it. During this period, the UK will not be considered a third country for the purpose of transferring personal data from the EU, unless the UK amends its data protection regime or exercises certain powers under its Data Protection Act of 2018 without the agreement of the EU. The UK data protection authority, the ICO, considers this as the best possible outcome for UK businesses. Since the UK transposed the GDPR into national law, it is expected that the EC will issue its adequacy decision for the UK in a relatively straightforward way. However, UK organisations that process personal information of EU residents may need to appoint an EU representative, identify a lead Supervisory Authority in the EU, and update policies, procedures and documentation.
