Matheson held a webinar on 29 March 2022 to discuss the key changes introduced by the European Electronic Communications Code (the “EECC”) and learn from the experience of various representatives of the telecommunications industry in implementing these changes to date. We were joined by Niamh Hodnett, the Head of Regulatory Affairs at Three Ireland and Ronan Lupton SC, who acts as independent chair to the telecommunications industry association ALTO.
Here we present some key takeaways from the webinar:
- End-User Rights: Regarded as the main impact of the EECC on telcos and seen by the attendees as drivers of future enforcement activity, telcos implemented the following changes, to the give effect to the new end-user rights introduced in the EECC:
- Developing pre-contract summary templates in line with the prescriptive guidelines set out in the EECC (outlined in our Cracking the Code: New Customer Contract Obligations article);
- Building in the provision of best tariff advice (“BTA”) and best tariff information (“BTI”) into the contract process (outlined in our Cracking the Code: Ongoing Obligations article). In this regard, it is important for telcos to observe the provisions of the ePrivacy Regulations and ensure that the BTA and BTI notices are not perceived as direct marketing by their customers;
- Updating the scripts of the customer service representatives to comply with the obligations set out in the EECC in relation to cancellation, renewal and automatic prolongation of contracts, while ensuring a positive customer experience.
- Transparency, Comparison and Information: Implementation of Article 103 of the EECC has proved to be complex for Irish telcos industry, resulting in a high cost of compliance and extraordinary business impact.
- Right of Exit: Provisions relating to the right of exit are of great significance to telcos. In particular, the right of exit provided in Article 105(4) of the EECC has been extended to bundles, while certain elements of bundles would be otherwise unregulated.
- ComReg’s Role: There remains some ambiguity in relation to automatic prolongation, cancellation, contract issues and quality of service elements of the EECC. Telcos would welcome a more active role for ComReg in guiding the industry towards compliance with the EECC.
- Poll Results: Our poll results highlight the impact of end-user rights on telcos.
What is the main impact of the code for you?
Coming under electronic communications regulation for the first time
Roll back of wholesale regulation
What end-user right do you see being a main driver of ComReg enforcement?
Renewal terms (best tariff information / advice)
Termination (including ‘contractual modification’)
Do you think administrative sanctions will improve the delivery of telco services or the functioning of the market?
Preparing for the Major Irish Telecommunications Law Changes Ahead: What You Need to Know
- The EECC will strengthen and harmonise consumer protection across the EU
The EECC will align protections for end-users of over-the-top service providers (“OTTs”) with those of traditional telecoms providers. The measures will require maximum harmonisation across the EU, but Member States are invited to introduce additional measures where needed.
Key changes include enhanced end-user rights in relation to sign-up, renewal, automatic prolongation, termination, the switching of internet access services and the porting of phone numbers, establishing a universal service ensuring availability and affordability of both broadband and voice communications, and enhancing security of networks and services.
End-user rights were seen by the attendees as the main drivers of future enforcement activity by ComReg.
- The EECC and the implementing Communications Regulation (Enforcement) Bill 2022 will enhance ComReg’s investigatory and enforcement powers
ComReg is one of the most active regulators in Ireland, having completed around 30 enforcement cases (about a third of which were criminal court cases) and dealt with more than a few judicial reviews in the last three years, despite the disruption of the pandemic.
The Communications Regulation (Enforcement) Bill 2022 (the “Bill”) will introduce a range of new offences to enforce the changes brought in by the EECC and will give ComReg enhanced investigatory and enforcement powers. The new civil enforcement regime will comprise new investigation and adjudication powers for ComReg, where it considers there to be a ‘regulatory breach’ in the electronic communications sector. These powers will enable ComReg to (i) impose administrative financial sanctions on undertakings up to a maximum of €5 million or 10% of annual turnover (whichever is the greater), and (ii) require undertakings to pay compensation to end-users (identical monetary caps to apply), subject to confirmation of the High Court.
In respect of ComReg’s criminal enforcement regime, the Bill also provides for a higher penalty for the commission of an indictable offence so as to ensure parity with the above-described civil fine limits (a fine not exceeding €5 million).
ComReg has been particularly active in enforcing contract issues, signing up, and termination / right of exit obligations and as such, we expect to see an increase in enforcement activity and robust appeals and defences process. See our Cracking the Code: Ireland upgrades its telecommunications regulatory enforcement regime article summarising the recently published Bill.
- Interpersonal communication service providers will be regulated in the same manner as traditional telcos under the EECC
The EECC extends telecoms regulation and rules to OTTs such as interpersonal communication apps and services (“ICS”) (eg, IM, Skype, Viber, cloud services and content providers, etc) that were not regulated on the basis of the current framework to even out the playing field between traditional telcos and OTTs and ensure continued investment and competition in line with EU’s Digital Agenda goals.
OTTs will now be required to:
- obtain an authorisation;
- comply with the rules set out in the general telecoms framework (including regulatory levies, information requests and ‘authorised officer’ visits (ie, dawn raids);
- introduce ‘state of the art’ security system requirements to ensure network / service integrity; and
- comply with end-user rights obligations, which vary depending on whether the ICS provider is number-based or number-independent ICS.
- Becoming a regulated telco will have a significant knock-on effect for OTTs and technology companies
In addition to the requirements imposed by the EECC, OTTs should prepare for the significant knock-on effects of becoming a regulated telco, such as compliance with the ePrivacy Regime and the Interception Regime.
The ePrivacy Regime, which sits alongside the GDPR rules, will apply to the regulated services imposing obligations in relation to security, secrecy of communications and use of traffic data, among others.
While it is unclear to what extent the Interception Regime will apply to OTTs as the Department of the Environment, Climate and Communications has indicated that the regime would not apply to number-based ICS, the regime is certainly in need of reform and the applicability of the regime to OTTs may change in the future.
- The EECC enhances cybersecurity measures
Telcos and now OTTs will have to implement the relevant network and service security provisions contained in Articles 40 and 41 of the EECC. This will enhance the existing security measures and introduce ‘state of the art’ security system requirements to ensure network security and service integrity. Telcos and OTTs will also have to report significant incidents to ComReg. Regulated telcos should prepare for the additional reporting responsibilities, alongside GDPR, ePrivay and other overlapping notifications. See further in Cracking The Code: New Security and Outage Reporting Obligations for Internet-Based Providers.