Clause 90 - Notification of contravention of condition
Communications Bill
10:15 am
Mr Stephen Timms (Minister of State (e-Commerce & Competitiveness), Department of Trade and Industry; East Ham, Labour)
Clause 90 is the first of a group of clauses up to clause 100 that set up a new system for enforcement action against those who breach any of the conditions of entitlement. The system will replace the arrangements under the Telecommunications Act
1984 for enforcing breaches of licences issued under the Act. Because of the importance of the matter, I shall put the amendments in context and outline the main provisions of the new enforcement regime.
Critics of the current system, including those mentioned during the debate on the previous clause, have commented that it is unduly weighted against those who have sought to have an alleged breach investigated and enforced. They have a point, which I think was the import of our earlier debate. They have been concerned that the system does not provide enough incentives to avoid breaches, or sanctions against repeating them; and that it is too slow and inflexible in its operation. As a result, the effective, competitive development of the industry, and its delivery of greater choice and lower prices, has been hampered.
The new regime addresses those concerns by introducing several new elements, as well as fully implementing the relevant provisions of article 10 of the authorisation directive. In future, Ofcom will be able to impose financial penalties on those found to be in breach, and to require them to remedy the consequences of the breach as well as—as happens at present—ordering them to comply in the future. Those are significant additional strings to Ofcom's bow. Third parties will be able to bring civil proceedings on their own initiative for the recovery of losses suffered, even where Ofcom has not previously taken action on the matter. There are special provisions to allow Ofcom to take rapid action in urgent cases, and fall-back powers for Ofcom to require the suspension or restriction of a person's entitlement to provide networks, services or associated facilities in the case of a particularly serious and repeated breach; failure to observe such requirements will be an offence.
Those changes are a significant enhancement of the regulator's powers. It would therefore not be right to introduce them without at the same time providing firm procedural safeguards for those subject to enforcement action. The new right of appeal on the merits to the Competition Appeals Tribunal, set out in clause 187, is a major safeguard. In addition, we propose the right for those subject to enforcement action to argue their side of the case before a definitive decision is taken, and that no penalty is to be posed against someone contravening a condition if they promptly take appropriate action to comply, and to remedy the consequences of the breach as soon it is brought to their attention.
Ofcom will have to publish guidelines on penalties, having first consulted the Secretary of State. The method used for calculating turnover for the purpose of penalties has to be approved by resolution of both Houses. Suspensions and restrictions of entitlement are possible only if strict conditions are met. In the case of third-party actions, it will be a defence for the provider to demonstrate that all reasonable steps were taken to ensure compliance and due diligence was exercised. Contrary to the hon. Gentleman's argument, we have an appropriate set of safeguards to protect those against whom action may be taken.