Ofcom plans to seize Brexit's opportunities while minimising disruption

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Years of EU membership has built deeply-intertwined laws and systems that would take years to detangle. The government will instead push the 'Great Repeal Bill' to enshrine current EU legislation into UK law but enable changes to be made which benefits consumers and businesses. 

Various agencies have been tasked with deciding what the best possible outcome would be for the areas they represent. The head of telecoms regulator Ofcom, Sharon White, has spoken at the Institute for Government on how to harness Brexit's opportunities while ensuring the industry avoids harmful disruption. 

Starting her speech, White highlights Ofcom's stance on the referendum: "As the communications regulator – politically neutral, independent of Government and of the companies that we regulate – Ofcom takes no view on the means or merits of Brexit." 

"But as the Government seeks the best deal for the UK, it is vital for British consumers that communications features at the heart of the negotiations." 

Indeed, the industries which Ofcom regulates  telecoms, broadcasting, postal and wireless services – have a combined yearly revenue of £57 billion which places it just behind Britain's leading financial sector in terms of economic contribution. 

The single market and ease of business within the EU has led to many telecommunication businesses having a presence across Europe, with many headquartered in the UK. "Our country is home to the largest number of pan-European media companies, and some of the most respected creative and technical talents in the world," says White. 

Some businesses within the UK, Viasat for example, do not broadcast to national citizens but instead transmit from London to Nordic and Baltic audiences. ITV is Europe's leading independent TV producer, while Sky provides satellite services beyond the UK in Germany, Austria, Italy, and Ireland. This sharing of content and services offers just one example of why it's within everyone's best interest to minimise disruption. 

Ofcom has been fundamental in helping to build the safeguards which protects consumers across Europe under their legal frameworks. Not all those under EU law will best serve the interests of British citizens and businesses, however, so Ofcom sees this as an opportunity to consider which should be altered or scrapped as part of the Great Repeal Bill. 

When deciding which EU laws should continue to apply in the UK, a 'triple test' has been proposed which other agencies would be sensible to follow. The questions are: 

  • Does it prioritise the interests of UK consumers and the wider public? 

  • Does it promote competition and investment? 

  • Does it support UK companies’ ability to trade successfully in the EU, and globally? 

Ofcom will retain what it considers to be working in the EU framework, improve where it's deficient, and ensure the existing protections of consumers and businesses are not weakened. The regulator wants to protect the right for companies to broadcast from the UK across Europe if the companies are compliant with Ofcom's rules on areas such as impartial and accurate news, free speech, right to privacy, and protection of children. 

"We license around 1,200 TV services, but almost a third are not broadcasting to UK viewers. Conversely, around 35 channels that can be received here are not licensed in the UK. We believe the Country of Origin principle should endure in the UK after Brexit so that media companies based here don't face new hurdles. Or worse, feel compelled to set up in another European country," explains White. 

In theory, the EU 27 may decide to prevent UK-based companies from broadcasting into their borders at detriment to consumers and cultural exchange. Similarly, without Ofcom's input, content broadcast from Europe into the UK may be blocked if agreements on acceptable content are not reached. 

One area which Ofcom is looking to free itself from is the EU's rules on regulators having to conduct an examination of their practices every three years, taking up time and resources. "As a domestic regulator, we have argued for flexibility to examine markets when merited, over longer cycles. That would give companies more security, and encourage investment. Indeed, the Commission is now proposing five-year reviews, but this illustrates the kind of change for which the UK might take direct responsibility in future," says White. 

Future potential mergers and acquisitions between UK and EU companies will also provide new challenges and require deep cooperation as deals will be subject to regulation in both countries. Instead of relying on EU courts, however, Ofcom will have more power to protect UK consumers without risk of being overruled. 

"What about if consolidation in the sector led to a small number of big players, with concentrated power – an oligopoly? Here, I think we have the chance to introduce new protections. If these markets become uncompetitive, Ofcom should be able to step in to protect UK consumers," White explains. 

"We and other regulators made this argument to the European Commission without success. The EU laws in this area remain unclear. We now have the opportunity to put this right in UK law. This is not regulatory-creep. Nor is it about new powers for the sake of it. Rather it is about ensuring that, in a rapidly evolving sector, UK laws protect UK consumers from new, anti-competitive threats." 

Progress made in areas such as reducing European roaming charges should be maintained or mobile operators could be subject to unfair costs which are passed onto consumers and businesses. 

Ofcom's independent powers – free of influence from government or companies – must also be protected to ensure it works in the country's best interests. The recent decision to split Openreach from BT is an example of one such move Ofcom was able to undertake to ensure the national telecoms network is acting in the interests of consumers. 

"As the Government seeks new trading opportunities in a world outside the EU, we want to see a framework for TV and telecoms that protects the future needs of consumers, businesses, viewers and listeners," concludes White. "Those are our goals. We will keep working with Government, Brussels and fellow regulators to deliver them, for the benefit of everyone in the UK." 

Do you think major disruption from Brexit is avoidable? Share your thoughts in the comments.

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