The Transition Period entered into force immediately upon the United Kingdom’s withdrawal from the European Union on 31 January 2020. During this period, EU law will continue to be applicable to and within the UK. What is to follow the Transition Period is uncertain and subject to ongoing negotiations between the EU and the UK. However, it is likely that the regulation of cross-border telecommunications services will be affected. In this context, this note discusses various implications of Brexit.
The Withdrawal Agreement regulates the terms of the British departure between the UK and the EU and entered into force immediately upon exit. The Withdrawal Agreement also includes a transition period, during which EU law will continue to apply to and within the UK (the “Transition Period”). The jurisdiction of the European Commission and the EU courts also remains intact. The Transition Period is currently set to expire on 31 December 2020 (the “Expiry Date”). This period can be extended by one or two years, but such an extension must be agreed between the EU and the UK before 1 July 2020.
The Withdrawal Agreement does not regulate the future relationship between the EU and the UK. This relationship is yet to be negotiated and decided between the parties. It is not certain that an agreement concerning future relations will be concluded before the expiry of the Transition Period. However, the EU and the UK have agreed on a Political Declaration that is meant to set the framework for the future relationship. This declaration is only a political document and not a legally binding agreement.
This note discusses the implications of Brexit for the provision of telecommunications services in the EU and the UK, as well as the effects of Brexit on the regulation of the telecommunications market.
During the Transition Period the UK will continue to apply EU law
For the purposes of cross-border trade of telecommunications services between the EU and the UK, companies established in both the EU Member States and the UK will be able to continue to rely on the right to free movement of services provided in the EU Treaties. Moreover, the EU Regulatory framework for electronic communications (the Framework) will continue to apply to and within the UK and shall be interpreted in accordance with EU case law and general principles for the duration of the Transition Period.
The Framework is made up of different EU Directives which address a range of issues, including mandating telecommunications network access, radio spectrum management, data privacy, use of electronic communications data, number portability and consumer access to emergency services. The objective of the Framework is to harmonise national telecommunications regulatory rules across the EU, promote the liberalisation and competitiveness of telecommunications markets, and protect customer and end-user rights. The Framework has been implemented into Member State law by national legislators. For example, in Sweden, this has been done primarily through the Electronic Communications Act (Sw. Lag (2003:389) om elektronisk kommunikation) and in the UK mainly through the Communications Act 2003 and the Wireless Telegraphy Act 2006.
Notably, the Framework will continue to develop during the Transition Period. A new electronic communications Directive (2018/1972), establishing the European Electronic Communications Code (EECC), was adopted by the EU in December 2018. It replaces the existing Framework (excluding the ePrivacy Directive (2002/58/EC)) and addresses a number of important issues, including access to network infrastructure and the regulation of new services and technologies, such as over-the-top providers (OTTs) media services (streaming media services offered via the internet) as well as the harmonisation of spectrum assignment and management. The aim of the EECC is to drive investment in new high-capacity networks (primarily 5G and new fiber networks) and create a ‘level playing field’ between telecommunications companies and OTTs. EU Member States have until 21 December 2020 to implement the new directive into national law. The UK government has indicated that it will implement substantial provisions of the EECC into UK law during the Transition Period.
The Framework is complemented by a number of directly applicable EU regulatory instruments. For example, the Roaming Regulation (2015/2120) covers wholesale and retail roaming charges within the EU. Another example is the Open Internet Regulation (2015/2120) which enshrines the principle of net neutrality (equal and non-discriminatory treatment of traffic in the provision of internet access services) in EU law. As with the Framework, these Regulations remain applicable to and within the UK until the Expiry Date.
EU law will not apply to the UK after the expiry of the Transition Period
At the end of the Transition Period, EU Directives and Regulations will cease to be applicable in the UK as a matter of EU law. This should not have an immediate impact on how businesses operate under the telecoms regulatory framework within the UK; the EU Directives have been implemented into UK national law and, according to the so-called Great Repeal Bill, Regulations and other EU law, will be converted into national laws upon the expiry of the Transition Period. However, the UK will no longer have to comply with the EU’s objective of promoting the Single Market, and the EU’s institutional requirements. For example, Ofcom (the UK telecommunications regulator) will not be required to notify the European Commission of any draft proposals that it has for regulating the UK electronic communications markets. Moreover, the UK will be free to change the national laws introduced in accordance with EU law. Similarly, national UK courts will not be bound by case law from the EU Courts. Consequently, it is likely that the EU and UK regulatory framework will diverge with time.
Spectrum management is the process of regulating the use of radio frequencies in order to minimise interference and promote efficient use of the radio frequencies for communication purposes. In the EU, the allocation and management of radio spectrum is administered by Member States. However, the EECC Directive (2018/1972), replacing the Framework Directive (2009/140/EC) and Authorisation Directive (2002/20/EC), establishes common general rules for the right to use spectrum for electronic communications. Additionally, the Commission sets out the policy priorities and objectives for the strategic planning and harmonising of radio spectrum use in the EU in its Radio Spectrum Policy.
After the Expiry Date, the UK will no longer have to coordinate its spectrum management policy with that of the EU. If the UK were to introduce major changes in its spectrum management policy, this would raise the risk of cross-border interference.
The EU Roaming Regulation (2015/2120) puts a cap on wholesale fees that national mobile operators can charge for connecting foreign operators’ customers and prohibits operators from passing the charge onto the customers. This Regulation will cease to apply in the UK after the Expiry Date. If no agreement is made between the UK and the EU on roaming, there will no longer be an EU law limit to what EU mobile operators could charge UK operators to provide roaming services and vice versa. Consequently, it would be up to UK mobile operators and their counterparts in the EU to negotiate commercial arrangements between themselves in order to decide on potential consumers roaming fees.
The Open Internet Regulation grants EU end-users a directly applicable right to access and distribute lawful content and services of their choice through their internet access service providers. These service providers are required to treat internet traffic without discrimination, blocking, throttling or prioritisation. Following the end of the transition period, the EU rules governing net neutrality will no longer apply to the UK. Their content could be preserved at UK level by enacting similar domestic legislation to take effect following Brexit. However, the UK’s interpretation of the net neutrality principle may still diverge over time.
The country of origin principle allows audiovisual media services providers (such as broadcasting companies and OTT media services) established in one Member State to broadcast in all Member States with the use of a single licence by complying only with the regulations of their home State. Following the end of the Transition Period, audiovisual media services providers established in the UK will lose the benefit of the country of origin principle. This is of great concern to UK broadcasters and OTT media services providers and, therefore, the UK regulator supports the continuity of the principle in the UK after Brexit.
However, the country of origin principle will not continue to function simply because it may be converted from EU law into UK domestic law. The principle relies on a mutual recognition basis and if there is no agreement between the EU and the UK on future relations between the parties or if the country of origin principle is not adequately addressed in such an agreement, UK audiovisual media services providers may no longer have an immediate right to transmit to the EU in its entirety. Instead, UK audiovisual media services may be required to comply with additional regulation in each Member State of reception. In this regard, it should be noted that Sweden is not a member of the European Convention on Transfrontier Television (ECTT), which sets a legal framework for the free movement of TV programmes in Europe. Therefore, UK broadcasters distributing TV programmes in Sweden risk facing an extra regulatory burden in order to continue providing services in Sweden.
Cross-border trade of telecommunications is heavily dependent on cross-border transfer of data. Whereas data can be transferred freely between EU Member States, data transfers to third countries are treated differently. As a general rule, Chapter 5 of the General Data Protection Regulation (GDPR) (2016/679) provides that personal data can be transferred to a third country only if the level of protection guaranteed by the GDPR is not undermined. There are two ways of ensuring the necessary level of protection; the Commission may adopt an adequacy decision in respect of a third country or region if it considers that the third country or region ensures an adequate level of data protection, or, alternatively, the appropriate safeguards can be established on a case by case basis by different means.
Following the end of the Transition Period, the UK will become a third country and the third country requirements of the GDPR become applicable. The EU and the UK have stated in the Political Declaration that they are committed to ensuring a high level of personal data protection to facilitate data flows between them. However, these statements are merely aspirational and do not provide for any legally binding commitment. The parties have agreed that the European Commission should start the assessment of the UK’s data protection rules in view of adopting an adequacy decision by the end of 2020, provided the applicable conditions are met. If the European Commission were not to adopt such a decision, EU telecom companies transferring data to the UK have to ensure that the appropriate safeguards exist in order to protect the data transferred.
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