Licensing implications for ISPs – in a nutshell (or two)

Ritu Manhas

PolicyAdvisor

Are we trying to regulate the Internet?

Yes and no

Everyone running a telecoms system needs a licence and these contain obligations

Our main concern is access to the Internet, rather than the Internet itself

‘Regulation’ and ‘licensing’ - not as ominous as it sounds!

Doing nothing new – regulating conveyance, not content

Class licences – even residential customers picking up home phone to make a call are doing so under a licence

The Telecommunications Act 1984 (“the Act”)

“Internet Service Provider” not defined

Offence under the Act to run a telecommunication system within the UK without a licence which authorises the running of that system

Definition of “telecommunication system”:

a system for the conveyance, through the agency of electric, magnetic or electro-magnetic energy of –

• speech, music and other sounds;• visual images;• signals serving for the impartation (whether as

between persons and persons, things and things or persons and things) of any matter otherwise than in the form of sounds or visual images, [ie data]; or

• signals serving for the actuation or control of machinery or apparatus [ie telecontrol systems]

The Internet is therefore a set of telecommunications systems

“Running a system” is not defined

Who has managerial control over the makeup of the system and the services provided?

Not necessarily ownership or day-to-day operation

Many ISPs are doing something which needs a licence, eg conveying, switching or routing

VISPs with no system, just reselling (like mobile service providers) – no licence required

Telecommunications Services Licence (“the TSL”)

class licence / general authorisation

granted to all persons

no application procedure

no fee – unless applying for Schedule 2 status under the Interconnection Regulations

DTI web site: www.dti.gov.uk/cii/docs/tsl.pdf

TSL conditions

‘Approval of equipment’

Publication of interfaces

Restrictions on advertising

Privacy, confidentiality and metering systems

Requirement to furnish information to the Director

Nothing too onerous for ISPs so far…

Further conditions apply if:• providing telephone services• interconnecting

Revised Voice Telephony Directive conditions:

eg• access to emergency services• requirement to provide itemised billing

only apply where licensee provides “Publicly Available Telephone Services”

emphasis on telephone services - this includes calls to ISPs over the PSTN

don’t apply to IP transport, E mail, Web services and content, and other value add services

Interconnection

ISPs may apply for Schedule 2 status under Interconnection Regulations

Entitled to interconnection from BT at cost-oriented rates

Required to negotiate interconnection where requested by another Sched 2 operator

What can be done under the TSL?

TSL permits the provision of all types of telecommunication services BUT with a few exceptions, including:

International Simple Voice Resale Services (“ISVR”)

certain broadcasting services

mobile services

International simple resale (of voice or data): simple conveyance of a message with no added value element where the message is carried by the PSTN of the UK and another country, irrespective of where the message originates or terminates

TSL:-

does not allow ISVR (but break out at one end is fine)

does not allow international simple resale for data

ISVR licence - almost identical to TSL but does permit ISVR. Registerable class licence.

Restrictions on System

Applicable systems described at Annex A of the licence

2 restrictions upon the nature and extent of the system that can be run under the licence:

1. System must not comprise any mobile radio apparatus

2. 20 site rule NB/ TSL operator can connect to another TSL operator within same premises without limit

20 Site Rule

All of the self-provided apparatus comprised in the system must be situated within a maximum of 20 single sets of premises.

Sites connected by leased lines outside the 20 site rule - not part of TSL system.

Single set of premises: “premises within a single contiguous boundary under a common management regime where no two points on the boundary of those premises are more than 5 kilometres in lateral distance from each other”.

TSL: ‘proportionate’ regulationThe fact that many of you are running under it and don’t even know proves this!

But:-problem for an ISP who wants to build an extensive network of its own, ie using self-provided links to connect up more than 20 sets of premises. ISP will then need an individual licence

This is where things get more complicated...

Code Powers

legal vehicle to obtain rights over land, and to install and maintain telecommunication apparatus on public and private land, if such rights cannot be obtained by agreement

also enable operators to obtain exemption from the need to apply for planning permission for certain limited kinds of infrastructure

application to the DTI

under the Act, only granted in limited circumstances and to certain types of operators

Public Telecommunications Operator licence (“PTO licence”)

individual licence

application procedure

initial fee payable to DTI of £40,000

annual fee payable to OFTEL, based upon turnover – minimum of £3000

Like the TSL:- Any telecommunications service is permitted subject to a number of

exclusions

Any new services will be authorised unless specifically added to list of exceptions

Unlike the TSL:-

no restriction upon the number of premises that may comprise part of the system

ISVR permitted (ie not excluded)

Mobile

MRTS (Mobile Radio Tails Service) excluded from fixed PTO licence

Mobile PTO can do fixed as well

Need Wireless Telegraphy Act licence from the Radiocommunications Agency (also for fixed radio access)

Under the Act:

PTO licence must contain at least one obligation to provide service

Publication of charges and non-discrimination conditions then attach to that obligation

Publicly Available Telephone Services (“PATS”)

Generally available to the public

Telephone service: uninterrupted simultaneous 2 way direct conveyance of speech and other voice frequency signals between end users, provided by calls set up over a switched network

PATS triggers obligation to provide directory services

PTO service obligations

PTO provides Publicly Available Telephone Services (“PATS”) in which case it has to provide national DQs

or

it is not doing PATS and must therefore provide either international conveyance services or international DQs

Hobson’s choice for an ISP?

Many ISPs are not doing PATS. Therefore they must satisfy the other ‘prong’ of the requirement to provide some kind of service:

provide international conveyance services [ie could be requested to provide connection services to Schedule 2 operators]; or

international directory services

NB/ obligation to provide service triggers:

obligation to publish charges, terms and conditions

prohibition on undue preference or undue discrimination

ISP will have to be sure that it can satisfy obligations in PTO licence:

Not easy for non-voice ISP to satisfy DQ obligation, particularly for international DQs

OFTEL and DTI are considering possibility of a new data licence

Voice over Internet Protocol

Subject of continuing discussion at European level

Our view is VoIP is voice telephony if:

• provided by ISP, eg break-in/break-out gateways, rather than merely allowed (ISVR)

• presented and provided as PSTN substitute

ISPs must also be aware of:

Telecoms Data Protection and Privacy Regulations

Distance Selling Directive

Regulation of Investigatory Powers Act

Advertising Standards Authority