After nearly three months of bidding, the multi-band auction of 5G spectrum in Germany across the 2GHz and 3.6GHz bands has come to an end. The length of the auction resulted in a high price (€6.5bn), especially considering the award did not include sub-1GHz frequencies. Assembly’s 5G tracker shows that spectrum in the 3.6GHz band was particularly expensive by international comparisons. German operators are making an investment above the average prices for these bands, and understandably voiced their discontent, since the hefty price will now impact their ability to invest in the network rollout and BNetzA attached coverage obligations to the licences. The silver lining perhaps is that they paid comparatively less than their peers for the 700MHz band back in 2015.
Since the end of 2018, several governments around the world have put forward proposals for the introduction of a digital service tax in their respective countries. As digital services change the nature of business, governments see the tax as a way to overcome the challenges that these digital businesses create for the international corporate tax system. Assembly’s Platforms and Big Tech Tracker has identified nine countries where this has happened; most of them in the EU, where the failure to reach a common approach at a supranational level has led many of them to go their own way. Countries in Asia and America are also taking action, while the international initiative, within the OECD, continues to lag behind and may be preempted by the proliferation of national regulations. While international coordination would be desirable, the trend of countries taking individual action is likely to continue given the slow pace at which supranational bodies are progressing; this will result in an inconsistent patchwork of tax regimes and rates around the world, and even within the EU.
The UK Government recently published a white paper with a broad set of proposals to tackle online harm. These include a new regulatory framework, to establish a duty of care for online companies for the first time, and the set-up of a specific regulator to enforce the new rules. While the regulation of internet companies has been coming for some time, the UK is the first country to propose such a comprehensive and detailed framework; to this end, the government appears to have listened to the concerns raised by inquiries of parliamentary committees (the DCMS Committee’s inquiry on fake news, and the Lords’ Technology Committee on internet regulation, in particular). A consultation is running until 1 July 2019, before the Government goes on to develop a final legislative proposal.
On 29 March 2019, the UK regulator Ofcom set out its initial approach for the next Fixed Telecoms Market Review, which will cover the years 2021–25; for the first time, a market analysis will have a time frame longer than three-years. Ofcom’s main objective is to ensure competition continues to develop, while at the same time supporting the recent surge in fibre investment, resulting from the rise of alternative operators which are seeing a strong investment case, particularly in urban areas, and ensuring Openreach continues to deploy fibre to improve connectivity and enable 5G in rural areas. The regulator also set out measures to facilitate migration from copper to fibre, by phasing out regulation and price controls on copper products.
The European Commission is currently seeking input on the review of its Recommendation on relevant markets, which has to be completed by the end of 2020 to comply with a provision of the Electronic Communications Code. While at this stage the EC is not setting out what that will look like, it is likely that some markets will be removed from the list of those subject to ex-ante regulation, in line with the outcome of previous reviews. However, the EC is also hinting at the creation of a specific market for wholesale physical infrastructure access, which shows how the review is focused around the development of 5G and fibre networks.
The note published by Mark Zuckerberg on 6 March 2019 sets out the new approach Facebook aims to take for its communications services. It will be more focused on privacy and less on public sharing compared to the past, reflecting on new demands of the market and taking on board some of the lessons of the past. However, the plan could fall short of addressing the issues identified by regulators, which no longer see privacy in isolation from competition problems. The promise of full-encryption across platforms is also likely to face regulatory challenges.
As the issue of security in 5G networks gains momentum, policymakers around the world are taking contrasting approaches. Concerns around the use of Chinese vendors is resulting in outright bans in some countries (US, Australia, New Zealand), whereas others are yet to take a definite stance, such as the UK whose government is finalising a review of the telecoms supply chain. Operators were initially quiet on the issue, but they are now taking explicit stances to keep the market for network equipment as competitive as possible, to avoid delays and increased costs in 5G roll-out. As our Cybersecurity Tracker shows, It is likely that vendors will have to face more thorough scrutiny, whereas operators could end up having to avoid using one single vendor in core parts of their networks, as proposed in Germany.
The Committee for Digital, Culture, Media, and Sport of the UK Parliament (DCMS Committee) has now completed its inquiry into Fake News, which lasted throughout 2018. The inquiry started as an investigation on the spread of disinformation and its role in influencing elections, and soon turned to the link between tech companies’ practices and the protection of citizens’ personal data. The final report makes strong recommendations to set up new regulators and laws around social media; however, it is unlikely that government and parliament will take immediate action to address the issues raised in the inquiry.
Recent cases have seen competition regulators intervening against tech giants, Facebook in particular. The most recent is a ruling in Germany, where the competition watchdog did not issue a fine, but instead ordered Facebook to stop practices which are a key part of the company’s business model. This, alongside other ongoing cases, could be a signal of a new regulatory trend, in which antitrust regulators aim to solve the issues that privacy regulators alone have not been able to address. Once again, Europe is leading the way, with countries elsewhere watching attentively.
On 18 January 2019, The Italian regulator AGCOM has published the long-awaited draft review of the Wholesale Broadband Access markets (Markets 3a/3b and 4 of the EC’s Recommendation on relevant markets). The proposal aims to deregulate the market in Milan, and introduces nuanced price control remedies in the rest of the country, recognising market evolution of recent years. The publication of the lengthy and complex document (454 pages long) was delayed due to Telecom Italia proposing the legal separation of its fixed network, in a way similar to the separation of Openreach within the BT Group in the UK. AGCOM has provisionally concluded that the plan does not affect the shape of WBA markets in a significant way, and leaves the regulatory burden on TIM nearly intact compared to the past. This could be a further incentive for TIM to ditch the plan, at a time when a change of leadership is now pushing for the network to be entirely spun off and merged with wholesale-only operator Open Fiber.
The Australian Competition and Consumer Commission (ACCC) has issued a preliminary report as part of its inquiry on digital platforms, which started at the end of 2017. The report carries 11 recommendations, and identifies nine areas for further investigation, which will likely be tackled in more detail by the final report to be published by June 2019. Stakeholders have time until February 2019 to provide their input on the comprehensive measures, which give a strong hint at the possible shape of platform regulation in Australia. The ACCC’s initiative is the most thorough and far-reaching regulatory initiative around online platforms so far – even more than the European Commission’s Platform-to-Business proposal, whose scope relates to the interaction between platforms and business users.
Rural mobile coverage continues to be an issue in many areas of the UK. While the latest Connected Nations report from Ofcom shows improvements compared to previous years, it also finds a significant part of the country is lacking sufficient coverage and will not be in a better place anytime soon, unless action is taken. For these reasons, the regulator is launching two complementary initiatives: one is the award of more spectrum to mobile operators, particularly in the 700MHz band, which is well suited to improve network coverage; the second is a plan to support spectrum sharing in the 3.8–4.2GHz band. This should equip operators with more airwaves for coverage, while at the same time making room for innovative approaches in which local operators and new businesses could play a role. Ofcom will seek input from stakeholders on both proposals until 12 March 2019.
We track the regulatory and policy actions to make 5G available. This includes planned and concluded spectrum auctions, and government strategies/roadmaps for 5G. We also detail operator-led initiatives, trials, and plans for commercial deployment of 5G services.
We track the implementation of cybersecurity regulation, with particular focus on recent EU Directives and Regulations. We also compare EU regulation with rules in Australia, US, Singapore, Korea, Japan. We also outline current debates and decisions such as around vendor selection.
This product tracks the increasing regulatory attention big tech companies and platforms are receiving from policymakers and their response. This includes efforts to tackle the dissemination of misinformation and hate speech online.
March 2019 Briefing
- EU Copyright Directive
- 5G cybersecurity round-up
- EU Recommendation on relevant markets
- 5G spectrum round-up
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