Telecommunications (Amendment No. 2) (Jersey) Law 201-
Accompanying report
Summary
The purpose of this amendment is:
- To provide the Jersey Competition Regulatory Authority (the JCRA) with civil powers to fine licensees if they are found to be in breach of one or more of their licensing conditions up to a maximum of 10% of their turnover averaged over three years;
- To clarify the right of the Authority to include conditions in licences which require operators to comply with directions issued by the JCRA; and
- To simplify the current consultation processes to remove the obligation on the JCRA in Article 11(10) of the Telecommunications Law to issue a fresh initial notice in the event of any change to a proposal.
Current regime
Jersey's current regulatory regime for telecommunications is broadly satisfactory in that it is comparable with a number of other jurisdictions in terms of powers and relative resourcing.
However, several studies into the effectiveness of the JCRA in regulating the telecoms industry have been conducted, and the conclusions of those studies together with the JCRA’s experience of regulating the telecommunications industry since 2002 have led to the modifications to the telecommunications law made by this amendment.
Studies
In July 2007 Oxera completed a review entitled ‘Possible Sale of Jersey Telecom: Additional Analysis’. A conclusion of this work was that the regulator needed to have appropriate intermediate sanctions for contravention of licence conditions.
The Economic Affairs Scrutiny Panel reported on the proposed privatisation of Jersey Telecom in March 2006 and recommended that a comprehensive review of the current capabilities of the JCRA, including its skill base, resources and legal powers, be carried out.
Consistent with the recommendations of both the Scrutiny Panel and the Oxera report into the sale of Jersey Telecom, a further review was undertaken into the JCRA’s regulation of telecommunications in Jersey.
LECG (a global consulting and expert services firm) in association with law firm Charles Russell LLP were commissioned to conduct the review, with the following main objectives-
- to undertake a review of the JCRA’s regulatory powers, resources and functions as a telecoms regulator within the Jersey market; and
- to produce a report detailing the efficiency of the JCRA in the telecom sector and making any such recommendations for change or improvement that might be considered.
The LECG Report was published in the spring of 2009 and made a series of recommendations, half of which centred on the working practices of the JCRA, generally in respect of the function of telecommunications regulation and its ability to undertake the role.
The recommendations within EDD's authority to deliver are primarily amendments to the Telecommunications (Jersey) Law 2002, specifically-
- the streamlining of the law’s consultation procedures,
- providing the JCRA with the ability to fine operators in breach of a licence condition and providing a mechanism to formally clarify licence conditions.
This amendment is therefore primarily based upon the outcome of the review, but also includes provisions to allow the JCRA to include conditions in its licences which could ensure that telecoms operators must follow its directions.
- Powers to impose penalties
In considering this recommendation of the 2007 Oxera report, the Minister noted the existing powers of the JCRA under the Competition (Jersey) Law 2005 and those of comparable regulators in the United Kingdom and elsewhere.
The only sanction available under the current Telecommunications Law is the power to revoke a telecoms licence if a provider does not comply with its licence conditions. This means that in practice the regulator can only try and persuade its licensees to conform with their licence obligations because the ultimate sanction, revocation, often may not be realistic.
Other telecommunications regulators have the power to enforce fines up to a maximum of 10% of turnover for breaches of licensing conditions and the Minister considers that this would be a valuable tool for the regulator before being forced into civil litigation or recourse to the criminal law.
- Conditions of licences - requirement to obey directions
The amendment is also intended to resolve an ambiguity in Article 16 of the law. Currently, while the conditions imposed as part of a licence imply that the JCRA has the authority to direct licensees, this authority is not explicitly stated, unlike in the telecommunications laws in similar jurisdictions like the Isle of Man or Guernsey.
The amendment would amend Article 16 to expressly permit the JCRA to include conditions in licences requiring operators to follow its directions.
- Requirement for repeated consultation
The amendment revises the manner in which the JCRA is required to consult upon regulatory decisions.
The JCRA is obliged to undertake public consultations in response to a wide range of proposals and initiatives. Currently, if it consults upon a regulatory decision, and then changes its proposed decision in any way in response to feedback that it has received as a result of the consultation, it is then required to begin the consultation again more or less from scratch. The burden that this imposes may have a number of negative consequences-
- Repeated consultation on the same issue may create ‘voter apathy’ and reduce the overall effectiveness of consultation.
- It will divert JCRA resources from other, potentially more significant, matters.
- The need to repeat a consultation if changes are made in response to it could create a perverse incentive not to adopt the findings of a consultation. This is particularly likely to be the case where resources are constrained.
The LECG review recommended that this procedure should be reconsidered so that there was no absolute obligation to issue fresh notifications when changes to consultations are made, but that the JCRA should be able to start a new notification in cases where it feels that the proposals have changed so significantly that there would be benefit from starting a new consultation.
For these reasons, the amendment provides discretion in such circumstances.
Financial and manpower implications
There are no additional financial or manpower implications for the States arising from this amendment.