UK White Paper draws a blank?

The UK Government has reacted to the ongoing convergence of broadcasting, telecomms and IT with the publication in December 2000 of its long-awaited 'Communications White Paper' - which aims to keep the UK at the forefront of the 'new economy', and the Government focused in a blurring regulatory environment...

With the publication of its Communications White Paper late last year, the UK government has given notice of its regulatory intentions governing the telecomms, broadcasting and publishing industries well into the new millennium. From an industry perspective, the White Paper says nothing that was not expected; in fact, according to Peter Striven, a Partner at Baker and Mackenzie who heads up the firm's UK Telecoms Group, it "indicated a steady-as-you-go approach and continues the main trends that have been apparent in the telecomms industry for about two or three years."

These are, says Striven:
- A general move towards deregulation;
- A move away from sector-specific regulation towards competition law;
- And the establishment of an altogether 'lighter' regulatory environment.

A decent first attempt
However, while the White Paper may not have satisfied the most ardent industry observers, it does address the converging communications industry and proposes many logical actions that should - if correctly implemented - go a long way to putting the UK at the heart of the global information society. Although many issues are covered, three main ones stand out:

- The dropping of ownership restrictions on the ITV franchises - which many have interpreted as giving the green light to a single, unified commercial broadcaster, rather than dividing the UK's commercial ITV energies equally between the two main players now, Carlton and Granada. This would create the environment for a world leading commercial broadcaster.

- The fact that the Government views the rollout of, and access to, high-speed broadband networks as pivotal to the development of the country.

- The formation of 'Ofcom', a unified regulatory body which will merge the existing 'alphabet soup' of regulators.

Anxieties remain
While the decision to drop the ownership restrictions for the ITV franchises has met with much positive feedback, the Government's plans for broadband access and the creation of Ofcom remain a cause for concern. In relation to the development of a national broadband network, the White Paper says: 'We will look for ways to build on the private investment that is already being made in broadband and consider whether public support is needed to help research and develop new high-speed networks'.

This sounds particularly ominous when pitched against the backdrop of current private investments in broadband. Telewest has stated its desire to pull out of an agreement with BT to co-operate on the unbundling of BT's local loop, in favour of concentrating on its own established customer base; and it is believed that NTL are expected to make a similar decision. Were this situation to persist, the UK taxpayer could end up shouldering a significant amount of the cost for the development of a 'national broadband network' - despite an EU directive enabling European governments to take a levy from the telecoms and broadcasting industries to fund broadband. And this brings us conveniently to the next point of concern: the formation of Ofcom.

Ironically, one of the reasons that both Telewest and NTL - and an array of other broadband companies - have lost their immediate impetus is down to the highly ineffective way Oftel, the UK's telecomms regulator, has spectacularly failed to create an authoritative environment where broadband can flourish. The very real concern is that if a regulator whose sole purpose is to regulate just one sector fails to do so, what hope has a lumbering agency with a whole portfolio of different responsibilities?

Further, the paper suggests that Ofcom's powers would be largely analogous with a combination of both the ITC and Oftel, with certain aspects of the Competition Commission. This in itself seems like a good enough idea, but it is imperative that the new regulator is not as toothless as Oftel or as reliant on Government as the ITC, otherwise the giant corporations will only need to intimidate one regulator, rather than many.

And while it makes sense to have a single regulator for a converging industry, just filling it with staff from existing industry-specific regulators will not be enough. The regulator must undergo an 'ideological' shift in the way it views the market. It must now be seen as a whole - rather than the aggregation of its constituent parts - and Ofcom must understand the significance each new development will have on the wider market.

The global angle?
While the White Paper comprehensively deals with UK-specific regulation, it fails to address a major problem associated with a converging communications network: 'how to regulate content which is received by UK networks but which originates overseas. Unfortunately, there is no immediate answer to this problem.

However, it is something that is being debated at the European level. So far, two schools of thought have emerged. The first is to force content providers to comply with the regulatory environment of the countries where their content is received; the second involves closer regulatory co-operation between EU member states.

Despite not actively addressing the regulatory problems of an industry whose products can traverse the world in second, the White Paper provides the UK government the opportunity to enter the 'premier league' of information economies. And at first sight, the fact that it draws extensively on recent telecomms deregulation is a good thing.

However, ten years ago the UK was a guiding light in telecoms deregulation and now it is widely regarded as having fallen into the second division. It's an old adage but one remains ever true: 'it takes more than words'.