Digital Economy Bill introduced


The Digital Economy Bill introduced at Westminster this morning will give industry regulator Ofcom greater responsibility to encourage investment in telecoms infrastructure.

The move is to accelerate the development of superfast broadband. The regulator will also be required to make a formal assessment of the UK’s communications infrastructure every two years.

The Bill also aims to enable the development of next generation mobile broadband services by allowing for the charging of periodic payments on auctioned spectrum licences and allowing Ofcom to levy monetary penalties for failure to meet certain licence conditions.

The Bill puts into place many of the recommendations set out in the Digital Britain report, published in June, such as those made by independent spectrum broker Kip Meek regarding the re-allocation of spectrum and subsequent caps following an auction.

Lord Mandelson said: “On current definitions our digital economy accounts for nearly £1 in every £10 that the whole British economy produces each year – so our creative and digital industries are key to Britain’s future economic success.  This Bill will give them the framework to develop competitively and make the UK a global creative leader.

“Creating the right conditions for investment in our communications  infrastructure will bring benefits for households and businesses in all parts of the country.”

Other measures in the Digital Economy Bill include greater protection against online copyright infringements by obliging internet service providers to take action against infringers, greater support for regional and local television news from Ofcom, updating the regulatory framework to prepare for the digital switchover for radio by 2015, and making age ratings compulsory on video games, among other items.



Excerpts from the Bill:

“A competitive digital communications infrastructure: to strengthen and modernise the country’s communications infrastructure by enhancing Ofcom’s duties in relation to investment in infrastructure and content, providing Ofcom with additional powers to support the modernisation of the mobile network spectrum and making changes to the radio licensing regime to support the move to digital radio;

“To strengthen the country’s communications infrastructure, equipping the UK to compete and lead in the digital global economy.

 “The Digital Britain White Paper set out that the centrality of our communications infrastructure to our economy and society has grown since the Communications Act 2003 was drawn up. The Government therefore proposes that Ofcom’s duties should be modernised to ensure that Britain has a first class and resilient infrastructure.  

“Firstly, the ability to introduce innovative new services frequently depends on investment in communications infrastructure. The Government therefore recognises that there is a potential tension between a short term regulatory goal of reducing prices, and a longer term regulatory goal of promoting efficient investment and the resulting innovation. This is a particular concern at a point in time when, for example, we expect that major new investments will be required to support the next generation of fixed and mobile broadband services. 

“The Communications Act 2003 sets out what Ofcom must and can do and how they should do it. Ofcom’s principal duty requires them, when carrying out their functions to further the interests of citizens in relation to communications matters and to further the interests of consumers in relevant markets, where appropriate, by promoting competition.

“The Government’s Bill proposal is to require Ofcom when performing their principal duty to have particular regard in all cases to the need to promote appropriate levels of investment in communications infrastructure and public service media content. Ofcom are to have regard to the need for investment to be efficient wherever possible. It is intended that this change will enhance the regulatory environment for future investment in communications networks and the incentives for network operators to invest.

“Secondly, the Government recognises the increasing importance of monitoring the national communications infrastructure, and the need for both Government and Ofcom to take a broad view of the UK’s needs and any ways in which those needs may not be being met. The Bill provides a new duty on Ofcom to report to Government every two years, giving an assessment of the UK’s communications infrastructure and to alert the Government to any significant developments affecting the communications infrastructure.

“To deliver progress towards next generation mobile networks and greater coverage to the benefit of consumers and business, the Government will be implementing the recommendations of the Independent Spectrum Broker. Those proposals require legislation to allow for the application of periodic payments, such as Administered Incentive Pricing, to spectrum that has previously been auctioned. 

“In addition, Ofcom’s existing powers to revoke or prosecute for a breach of a licence condition are seen as disproportionate or not sufficiently flexible in some circumstances. Monetary penalties can be a more flexible, proportionate and immediate enforcement tool. The Bill therefore provides Ofcom with the power to impose monetary penalties for a breach of certain wireless telegraphy licence conditions.”