Brexit one year on: Telecoms

United Kingdom

The telecommunications regulatory regime in the UK is based predominantly on EU Directives which were written with the aim of achieving an EU-wide consistent communication regime. In the UK these EU Directives are implemented into law via the Communications Act 2003.

As the arrangements for Brexit are formalised, it will be important therefore for the UK to consider the appropriate course of action for its regulatory regime governing the telecoms sector.

On the one hand, and in the short term initially, there is the option to maintain the current regulatory regime (or a local implementation of something that is broadly consistent with the EU Directives). This would keep a potentially over-complicated regulatory regime both workable and compatible with, the EU regime.

On the other hand, there is the option to amend, or repeal, the current legislation and replace it with a new regulatory regime. This has the advantage of providing the UK with a clean slate. But it would risk incompatibility with the remaining EU regime (and the loss of the EU-benefits and market access that this brings).

New EU Directives are still shaping the telecoms sector. The Roaming and Open Internet Regulation 2015 (“Roaming Regulation") has prohibited telecom operators from charging roaming fees within the EU from June 2017. Such fees are traditionally a strong source of revenue for telecoms operators, but an expensive cost for consumers.

The future of the Roaming Regulation in the UK post-Brexit is not clear. It will depend on whether the UK can continue to be part of the EU-wide telecoms regulatory framework. If Brexit were to result in the UK coming wholesale out of the EU and the EEA, then the Roaming Regulation would cease to apply to UK customers. If the UK then enacted a local version of the Roaming Regulation into UK law, the local enactment alone (after Brexit) would not necessarily be able to force EU telecoms operators to comply with the strict requirements of the Roaming Regulation, including mutual EU caps on roaming charges with UK telecoms operators. The net result of this is that, having seen roaming charges abolished this year, UK consumers might – after Brexit – find themselves subject once again to roaming fees on telecoms services in the EU.

All the other EU Directives applicable to telecoms in the UK would also cease to apply after Brexit, unless the UK and the EU agree otherwise.  The UK telecoms sector would be governed by the World Trade Organisation’s General Agreement on Trade and Services (“GATS”) until the UK negotiated free trade agreements with other countries. Whilst the UK is a member of the WTO in its own right, it would need to separate its own schedules of commitments from the existing consolidated EU schedules.

The stated objectives of the WTO members are to give recognition to the specific nature of the telecommunications services sector, to a so-called ‘basic agreement’ on telecoms, and to the government by GATS of measures affecting access to and use of public telecommunications transport networks and services.  Around 100 countries have signed up to the basic agreement on telecoms, representing possibly as much as 90% of global revenues in the sector. Given that the basic agreement underpins the global telecom interconnectability, including with the EU, and that it is based in large on a ‘reference paper’ that reflects strongly the EU regulation on telecommunications, it would not be expected that UK telecoms regulations post Brexit would deviate strongly from current regulations which implement the EU Directives and the basic agreement on telecoms.