Recent key UK developments include Ofcom publishing its plan of work for 2023/2024 and proposing to refer the UK cloud services market to the Competition and Markets Authority (CMA) for further investigation. A White Paper has also been published setting out a new approach to regulating artificial intelligence in the UK, focusing on building public trust, and facilitating business innovation. Further afield, in Europe, BEREC has published its Action Plan for 2030 (outlining five strategic orientations for a regulatory environment fit for the digital age and global context) and obligations have been proposed in the European Parliament for providers of General Purpose AI (GPAI) systems.

• Ofcom published its Plan of Work for 2023/24, setting out it work programmes to deliver on existing and newly acquired duties. Alongside this, it has also published the summary of consultation responses, many of which focused on obtaining further clarity around the regulators work programme for the telecoms market.

Fixed line

• In light of extensive stakeholder engagement with its consultation, Ofcom announced it would delay its decision on Openreach’s Equinox 2 offer for a further 2 months. The final decision is now expected in late May/early June.
• Ofcom published a consultation on proposed guidance for the industry when it comes to using the term fibre to describe the underlying providing a broadband service. Ofcom intends to provide customers with greater clarity on the broadband network technology they’re signing up to, through a short, easy-to-understand description provided by their ISP. The consultation closed on 3 May 2023.
• Ofcom has opened an industry-wide enforcement programme regarding the failed implementation of a new broadband switching process, as industry missed the deadline for launching the new service. Ofcom has also published an analysis of its mobile switching reforms recently.
• Ofcom has published a consultation to modify the terms on which the Electronic Communications Code (‘the Code’) is applied to KCOM Group Limited. KCOM is the network incumbent for the Hull area with very limited footprint beyond this. The application implies a change in commercial strategy, with a potential to expand its footprint more extensively.
• Ofcom increased the payment amounts issued to consumers under its automatic compensation scheme, which requires ISPs to compensate their customers in the end there is a loss of and/or delay in providing a broadband and/or landline service.

Mobile, Wireless and Spectrum

• Ofcom published its statement and further consultation on “enabling mmWave spectrum for new uses”. It has decided to make over 6 GHz of mmWave spectrum available across the 26 GHz (24.25 GHz – 27.5 GHz) and 40GHz (40.5 GHz – 43.5GHz) bands for mobile technology including 5G. In the same document it outlines its consultation on the proposed design of the auction for city wide licences, the licence conditions for citywide and local mmWave licences and how it will coordinate users of this spectrum. The closing date for responses is 22 May 2023.
• Ofcom is currently reviewing the future use of the unpaired 2100MHz (1900 – 1920MHz) spectrum. The current non-use of the unpaired 2100MHz is considered suboptimal by Ofcom. Regulatory intervention by revoking the existing licences to enable Ofcom to reallocate the spectrum for new uses may be necessary to achieve the objective of optimal use. Ofcom is separately considering where there may be other spectrum frequencies capable of supporting the ESN Gateway, with technical work underway. The consultation closes 25 May 2023.
• Ofcom has also published a Call for Inputs regarding the evolution of the shared access licence framework. The deadline was 16 May 2023.

New markets

• Ofcom is proposing to refer the UK cloud services market to the Competition and Markets Authority (CMA) for further investigation. In its latest market study, the regulator has provisionally identified features and practices that make it more difficult for customers to switch and use multiple cloud suppliers. Ofcom has raised particular concern with the practices of Amazon and Microsoft because of their market position. Stakeholder responses were invited by 17 May 2023 with a decision expected no later than 5 October 2023.
• On 16 May, Ofcom opened an investigation into Secure Live Media Ltd. Video Sharing Platform (VSP) providers have to self-assess if they fall under Ofcom’s regulations and come under UK jurisdiction, and if they do so, they must notify their service to Ofcom. Ofcom has reason to believe the current VSP regulations should apply to Secure Live Media but they have not notified Ofcom that they fall within Ofcom’s jurisdiction. Ofcom’s work on this is focused on regulatory obligations for VSPs to take such measures as are appropriate to protect people using their sites and apps from harmful videos. Ofcom is looking into whether Secure Live Media has sufficiently robust measures in place to protect children from pornographic content on its site. Ofcom is currently at an information gathering stage and will publish an update on their investigation by the end of October 2023

• The Competition Appeal Tribunal (CAT) handed down a judgement in relation to Apple’s application for review of the CMA decision to make a market investigation reference into the supply of mobile browsers and browser engines, and the distribution of cloud gaming services through app stores on mobile devices in the UK. The CAT found in Apple’s favour.
• The CMA has blocked the proposed Microsoft acquisition of US video game company Activision Blizzard as it had concerns the deal would offer less innovation and choice for gamers in the cloud gaming market. This decision is expected to be appealed by Microsoft and contrasts with the EU’s decision to approve the takeover on 15 May.
• On 16 May, the CMA provisionally decided to release merger undertakings given by British Sky Broadcasting Group (BSkyB) plc in 2001 following a transaction in which it increased its shareholding of British Interactive Broadcasting Holdings Ltd. This follows a request from Sky that the CMA reviewed the undertakings. The CMA is reviewing whether, as a result of any change in circumstance, the undertakings are no longer appropriate.
• The CMA cleared the anticipated merger between Viasat and Inmarsat on 9 May 2023, both global businesses provide satellite connectivity that enables amongst other things internet services.
• The CMA found that VMware has a leading position in server virtualisation software and that compatibility with its software is critical for the server hardware components sold by Broadcom and its rivals. The CMA is concerned that the deal could enable Broadcom to harm its rivals by preventing them from being able to supply VMware-compatible hardware components – such as NICs and storage adapters – reducing competition and ultimately choice for customers. The CMA has referred the anticipated acquisition for an in-depth investigation, on the basis the merger may be expected to result in a substantial lessening of competition within the market.
• The CMA has also opened an initial review of competition and consumer protections in the development and use of AI foundation models.

• The UK Government has finally published the long-awaited Digital Markets, Competition and Consumers Bill. The aim of the bill is to establish a new pro-competition regime for digital markets which will address the significant market power of a small number of tech firms. The CMA will be given the tools to proactively drive more dynamic markets and prevent harmful practices that hold back innovation and growth. For more information on this, please see our tracker here.
• Recent developments saw another altnet win one of the BDUK Project Gigabit lots. CityFibre was awarded the Cambridgeshire lot (Lot 5) worth £122m covering around 45k homes. Thus far 7 lots have been awarded, all to altnet providers.

• The AI White Paper sets out a new approach to regulating artificial intelligence in the UK, focusing on building public trust and facilitating business innovation. Five guiding principles include safety, transparency, fairness, accountability, and contestability. Regulators will issue practical guidance, tools, and resources over the next 12 months to help organisations implement these principles. The government is consulting on the white paper, with responses due by 21 June 2023.

• BEREC issued a call for inputs on its work programme for 2024, focusing on the mandatory tasks from the European Electronic Communications Code (EECC) and its four main goals. These include promoting connectivity, competition, internal market development, and EU citizens’ interests. BEREC’s strategic priorities for 2021-2025 will also inform its work in 2024. A public consultation on the draft work programme will take place in October and November 2023, with the final work programme to be adopted in December 2023.
• BEREC published its Action Plan for 2030, outlining five strategic orientations for a regulatory environment fit for the digital age and global context. These include fostering national and international connectivity, facilitating an open and sustainable internet ecosystem, ensuring network and service security and resilience, contributing to environmental sustainability goals, and strengthening BEREC’s agility, independence, inclusiveness, and efficiency as a centre of expertise.

• Electronic communications service providers in Italy sought full reimbursement for costs of intercepting communications as ordered by Italian authorities. The ECJ ruled that the European Electronic Communications Code (EECC) does not preclude national legislation that does not require full reimbursement, provided that it is non-discriminatory, proportionate, and transparent. The court found Italy’s discretion to be in accordance with these principles, and reimbursements were comparable for all operators. The rates were calculated considering technological progress, public interest, and operators’ capabilities. The court’s answer would be transposable to the earlier Directive 2002/20, as the EECC recast it without introducing relevant amendments.
• BEREC drafted guidelines to provide guidance to national regulatory authorities (NRAs) on the criteria a network must fulfil to be considered a very high capacity (VHCN) network under Article 82 of the EECC. The first version of the guidelines was published in 2020, but it didn’t fully consider 5G networks. The updated guidelines revise criterion 4, which covers performance thresholds for wireless networks, based on data collected from 5G mobile network operators. A consultation on the update closed on 28 April 2023.

• A draft from the European Parliament’s co-rapporteurs proposes obligations for providers of General Purpose AI (GPAI) systems. They want GPAI providers to comply with requirements meant for high-risk AI solutions, regardless of distribution channels or system format. This involves aligning design, testing, and analysis with risk management requirements to protect safety, rights, and values. Economic actors, such as AI distributors, importers, or deployers, will be considered high-risk system providers if they substantially modify an AI system. The original provider must then assist the new provider, providing technical documentation and access without compromising commercially sensitive information. An annex was introduced to clarify the information that GPAI providers should grant to downstream operators. Additionally, a new article prevents providers from imposing unfair contractual terms on SMEs.