Enforcement under the new EU Directives

1. Enforcement under the new EU Directives Michael Knowles Stakeholders’ Group Meeting 15 May 2003

2. Introduction • New regime wide powers & penalties • If breach required to give notice & period for representations (Art 10 AuthDirective) • Provisions same whether Comms Bill or interim SIs • Comms Bill duties on Ofcom to publish policy statements on information gathering & penalties

3. Information gathering powers - What information? Wide range of purposes formal info reqts can be made, including: • Investigating breaches of conditions & disputes • Market reviews • Statistical purposes

4. Information gathering powers - Information from whom? Wide range of persons info can be requested from, including: • Comms providers and ex providers • Apparatus suppliers • Others who appear to Oftel/Ofcom to have info required by them

5. Restrictions on info requests Investigating breach of condition: • Complaint received • Own initiative • Reason to suspect breach Request • Must be proportionate to use • Set out in notice • Describe info reqd and why reqd

6. Breach of info request Notification of contravention • Specified period of time (usually 1 mnth) to make representations or comply (follows Art 10) Breach of notification • Oftel/Ofcom can fine up to £50k • Criminal offence to intentionally/recklessly provide false info - fine &/or imprisonment • Ultimate power to suspend service provision apparatus supply serious & repeated breaches

7. Policy statement on info gathering S142 Bill duty Ofcom to prepare & publish a policy statement on how will use powers & how will use info obtained • Draft Oftel statement & condoc 24/4 (end 20/6) • Follows policy recent statements • Investigating breach Conds/Disputes generally use formal info gathering powers • Market reviews/stats purposes voluntary info, but will use powers if necessary

8. Breach of conditions Reasonable grounds to believe is or has been in breach • Notification of contravention of condition specified period of time (usually 1 mnth) to make representations or comply • Breach of notification - Oftel/Ofcom can issue an Enforcement Notification (enforceable via civil proceedings) and/or impose penalties

9. Penalties Up to 10% of turnover • Must be appropriate & proportionate • Must take account of representations made & steps taken to comply • DTI consulted on draft Turnover Order similar to that under the Competition Act

10. Policy statement on penalties S385 Bill duty Ofcom to prepare & publish policy statement with guidelines on how it will determine the amount of penalty • Applies to all of Comms Act penalties (not just networks & services) and other enactments apart from Comp Act - therefore inc content provisions • Ofcom Board currently considering a draft before consultation

11. Breach of conditions - other issues Urgent measures - exceptional eg serious threat to public safety - direction to suspend & can reduce notification period to comply Civil liability - breach of condition or breach of Enforcement Notification - breach of a statutory duty - those affected could sue for damages

12. Conclusions • New regime will give wide enforcement powers & new regulatory powers to impose penalties • Balanced against this right to make representations, proportionality and transparency

13. Any questions?