UK- Continuation of Licence Conditions

During the implementation of the EU Authorisation Regime in the UK, an issue arose concerning a possible “regulatory gap” related to licence conditions during the transition period. 

 

The Communications Act 2003 (the “Act”) was designed to implement a number of EU directives concerning the telecommunications regulatory framework, including the Authorisation Directive.  Pursuant to the Act and in accordance with the requirements of the Authorisation Directive, the licensing regime in the UK was replaced by a general authorisation regime.   The Authorisation Directive came into effect on July 25, 2003.  The terms of the Act stipulated that all telecommunications licences in the UK would be revoked on this date and replaced with general authorisations. 

 

Prior to the general authorisation regime, a number of operators had individual licences that contained specific conditions designed to respond to the market power of the individual licensee.  Once these licences were revoked on July 25th, 2003, these operators would not have be subject to any licence conditions constraining the abuse of dominance since new conditions under the general authorisation regime could not be imposed until  market studies had been completed.

 

The UK regulator at the time, Oftel (which later became Ofcom), had hoped that a number of market studies would be completed by July 25, 2003.  These market studies were designed to identify operators that enjoyed significant market power (“SMP”) in the UK.  According to the terms of the Authorisation Directive, certain conditions could be attached to the general authorisations of operators with SMP in order to prevent abuses of dominance, but only after market studies had been conducted.  Because the market studies for UK operators were not completed by July 25, Oftel could not impose these conditions on operators through its new general authorisation regime. 

 

Oftel initiated a brief public consultation concerning the regulatory gap and the possible continuation of certain licence conditions after July 24th, when the new general authorisation regime would take effect.  Following this public consultation, the Director of Oftel exercised powers granted to him under the Act to issue a number of continuation notices to various licensees to continue certain licence conditions.  The Director then issued a statement concerning the continuation of the licence conditions in order to explain the policy decisions underlying the continuation notices and to provide further details about the continuation provisions.

 

In the Summary of the Director’s Statement, the following comments are made:

 

“VI.             The continuation for an interim period of the old Licence Conditions which corresponded to SMP or Access-Related Conditions has one underlying purpose.  That purpose is to maintain the status quo and avoid a regulatory gap until the new conditions can be introduced if appropriate.  In a few cases, modifications have had to be made, but this has only been done where necessary to enable these Continued Provisions to be effective and enforceable.

 

“VII.            The Notices, which provide for the provisions to be continued after the abolition of licensing, had to be completed before the licences were revoked.  Schedule 18 of the Act provides for the provisions to be continued, but not resurrected.  Oftel was faced with a complex exercise that needed to be completed within a very short period of time.  That exercise has been completed and this Statement documents the policy and other considerations which gave rise to the issuing of the Notices.  Details of the Continued Provisions and the reasons why they are being continued are set in Chapters 3 and 4 of this Statement.”

(Excerpted from the Director’s Statement, “Continuing Licence Conditions After July 25”, available on-line at: http://www.ofcom.org.uk/static/archive/oftel/publications/eu_directives/cont_notices/cont0903.pdf.  A link to this document is set out below.) 

Oftel issued a number of Continuation Notices to various service providers.  It posted these Continuation Notices on a website containing information about the continuation process.  A link to the Continuation Notice issued to British Telecommunications plc is set out below as an example.  We have also included a link to an explanatory memorandum concerning continued conditions in class licences.

TRT-PN-M2-71

Learn More