Telecoms & Media 2021

Telecoms & Media 2021 Telecoms & Media 2021

Contributing editors Alexander Brown and David Trapp Simmons & Simmons LLP

Subscriptions Claire Bagnall Telecoms & Media [email protected]

Senior business development manager Adam Sargent 2021 [email protected]

Published by Law Business Research Ltd Contributing editors Meridian House, 34-35 Farringdon Street London, EC4A 4HL, UK Alexander Brown and David Trapp

The information provided in this publication Simmons & Simmons LLP is general and may not apply in a specific situation. Legal advice should always be sought before taking any legal action based on the information provided. This information is not intended to create, nor does receipt of it constitute, a lawyer– Lexology Getting The Deal Through is delighted to publish the 22nd edition of Telecoms & Media, client relationship. The publishers and which is available in print and online at www.lexology.com/gtdt. authors accept no responsibility for any Lexology Getting The Deal Through provides international expert analysis in key areas of acts or omissions contained herein. The law, practice and regulation for corporate counsel, cross-border legal practitioners, and company information provided was verified between directors and officers. May and June 2021. Be advised that this is Throughout this edition, and following the unique Lexology Getting The Deal Through format, a developing area. the same key questions are answered by leading practitioners in each of the jurisdictions featured. Lexology Getting The Deal Through titles are published annually in print. Please ensure you © Law Business Research Ltd 2021 are referring to the latest edition or to the online version at www.lexology.com/gtdt. No photocopying without a CLA licence. Every effort has been made to cover all matters of concern to readers. However, specific First published 2000 legal advice should always be sought from experienced local advisers. Twenty-second edition Lexology Getting The Deal Through gratefully acknowledges the efforts of all the contri ISBN 978-1-83862-728-7 butors to this volume, who were chosen for their recognised expertise. We also extend special thanks to the contributing editors, Alexander Brown and David Trapp of Simmons & Simmons LLP, Printed and distributed by for their continued assistance with this volume. Encompass Print Solutions Tel: 0844 2480 112

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Reproduced with permission from Law Business Research Ltd This article was first published in July 2021 For further information please contact [email protected] www.lexology.com/gtdt 1 © Law Business Research 2021 Contents

Introduction 3 Philippines 103 Alexander Brown and David Trapp Rose Marie M King-Dominguez, Miguel Franco T Dimayacyac and Simmons & Simmons LLP Leo Francis F Abot SyCip Salazar Hernandez & Gatmaitan Brazil 4 Mauricio Vedovato and Daniela Maria Maria Rosa Nascimento Portugal 109 Huck Otranto Camargo Advogados Nuno Peres Alves and Mara Rupia Lopes Morais Leitão, Galvão Teles, Soares da Silva & Associados China 11 Jingyuan Shi, Ryo Lu and Jenny Liu Russia 118 Simmons & Simmons LLP Anastasia Dergacheva, Ksenia Andreeva, Anastasia Kiseleva, Kamil Sitdikov and Alena Neskoromyuk Egypt 21 Morgan, Lewis & Bockius LLP Mohamed Hashish and Farida Rezk Soliman, Hashish & Partners Singapore 127 Lim Chong Kin European Union 28 Drew & Napier LLC Anne Baudequin, Christopher Götz and Martin Gramsch Simmons & Simmons LLP South Korea 141 Ji Yeon Park, Juho Yoon and Kwang Hyun Ryoo Greece 46 Bae, Kim & Lee LLC Dina Th Kouvelou, Nikos Th Nikolinakos and Alexis N Spyropoulos Nikolinakos & Partners Law Firm Switzerland 149 Mario Strebel and Fabian Koch Ireland 56 CORE Attorneys Ltd Helen Kelly, Simon Shinkwin and Kate McKenna Matheson Taiwan 158 Robert C Lee and Sharon Liu Italy 67 Yangming Partners Alessandra Bianchi Simmons & Simmons LLP Turkey 164 Cigdem Ayozger Ongun, Volkan Akbas and Selin Cetin Japan 76 SRP Legal Atsushi Igarashi, Takuya Yamago, Koshi Okabe and Yukito Nagaoka TMI Associates United Arab Emirates 175 Raza Rizvi Mexico 84 Simmons & Simmons LLP Julián Garza and Paulina Bracamontes B Nader Hayaux & Goebel United Kingdom 182 Alexander Brown and David Trapp Nigeria 93 Simmons & Simmons LLP Chukwuyere E Izuogu, Otome Okolo and Tamuno Atekebo Streamsowers & Köhn United States 199 Colleen Sechrest, Kent D Bressie, Michael Nilsson and Paul Caritj Harris Wiltshire Grannis LLP

2 Telecoms & Media 2021 © Law Business Research 2021 Introduction

Alexander Brown and David Trapp Simmons & Simmons LLP

Continual changes to technology and how end users consume informa- many TMT companies opportunities for growth in meeting the demands tion mean that the laws concerning the telecoms and media sectors of consumers seeking new solutions for home working, homeschooling remain under constant review. The purpose of Telecoms & Media is to and indoor entertainment and it will drive the digital transformation of give an overview of the framework in these areas across a wide range businesses as they have had to adopt cloud services at speed and scale of different jurisdictions. to address some of the challenges posed by the coronavirus. The answers to the questions posed in this publication address Moreover, it seems likely that working practices may never be not only the regulatory structure in each market but also the practical the same post-lockdown as many businesses are announcing moves aspects of how those regulations impact service providers and end to hybrid or fully remote working patterns. This could see a significant users alike. The responses to each question highlight any key changes proportion of the workforce working from home much of the time if not over the past year, as well as any proposed plans for change and future full time. That will impact, for example, communications service providers developments. In answering these questions, the responses seek to as demand for high bandwidth broadband shifts, to some degree, from address both the legal and practical aspects of these industries. metropolitan areas to less densely populated areas. That may cause The importance of telecoms and media for end users generally governments to revisit rollout obligations and universal service obliga- means that, for many countries, these areas are heavily regulated tions associated with fixed and mobile broadband. However, that desire and are subject to detailed competition law requirements. Attention to improve connectivity may well have to be adjusted to take account of is, therefore, also given to how these restrictions on competition will funding (both within the public and private sectors) being likely to be impact organisations operating in these sectors. Additionally, considera- somewhat constrained in the aftermath of the covid-19 crisis. tion is given to how areas of law that are not specific to these sectors, On another topic, and more parochially, the United Kingdom left such as cybersecurity and data protection legislation, may impact the the European Union on 31 January 2020 with a transition period in place telecoms and media sectors. that ended on 31 December 2020. Accordingly, the United Kingdom has The responses to these questions avoid focusing on only one or now left the EU regulatory regime and we may increasingly see UK two segments of the industries but instead look to give an overview of a regulation diverge from that of the European Union. While the United wide range of areas, from mobile communications to broadband connec- Kingdom has implemented the European Electronic Communications tivity for telecoms and newspapers to online video content for media. Code, which is of relevance for the telecoms sector, it has indicated, for At the time of writing the introduction to last year’s publication, example, that it does not have plans to implement the Digital Copyright the covid-19 lockdowns were taking full effect on a global scale. Sadly, Directive, the implementation deadline of which fell outside the Brexit they remain in place in many countries at the time of writing of this transition period. introduction and we have seen the profound effect that covid-19 and Following the agreement of the Brexit Trade and Cooperation the lockdowns have had on society and business. The crisis has had Agreement at the end of 2020, a clearer picture developed for the United a mixed outcome on the technology, media and telecommunications Kingdom’s trading and regulatory environment post-Brexit, but not all (TMT) sector. Those technologies and services that have enabled the loose ends relevant to the TMT sector are tied up. For example, remote working and maintaining personal contact have thrived (eg, concerning the important area of data transfers, we still await news of video conferencing, cloud services, home broadband and e-commerce) whether the European Commission’s recent draft adequacy decision on while those that feed off live interaction with people or are connected to the United Kingdom’s data protection regime will be approved. Friction the offline retail sector have been hit harder (eg, services supported by concerning data transfer between the European Union and the United broadcast advertising, live events streaming or ticketing services, etc). Kingdom will hamper TMT businesses just as we are seeing the growing However, longer-term it is clear that the covid-19 crisis will be the friction in data transfers from the European Union to countries like the catalyst to the digital transformation of business and society. It has given United States raise significant challenges for TMT-sector companies.

www.lexology.com/gtdt 3 © Law Business Research 2021 Brazil

Mauricio Vedovato and Daniela Maria Maria Rosa Nascimento Huck Otranto Camargo Advogados

COMMUNICATIONS POLICY broadcasting companies (radio and television). The control and management of these companies must be exercised exclusively by Brazilians, Regulatory and institutional structure born, or naturalised for more than 10 years. Also, foreign equity partici- 1 Summarise the regulatory framework for the communications pation in such companies must be done indirectly through a Brazilian sector. Do any foreign ownership restrictions apply to company incorporated under Brazilian law. communications services? Authorisation/licensing regime In Brazil, the fundamental law that governs the telecommunications 2 Describe the authorisation or licensing regime. sector is Law No. 9,472/1997, the General Telecommunications Law (GTL). The GTL provides the legal structure of telecoms services, The GTL provides that telecom services are classified in services of defines the general principles governing the telecoms services, and has collective interest and private interest. Also, telecom services may be created the Brazilian Telecoms Agency (Anatel). rendered under a public or private regime. Anatel is the agency responsible for the regulation of the telecoms Telecom services provided under a public regime are those under- sector, including the granting of licences and authorisations for the stood as universal, which cannot be interrupted (eg, fixed phone). Such exploitation of services in this sector. Licensing is regulated by Law No. services may be provided through concession or permission. Therefore, 13,116/2015, which also provides the general rules applicable to the there are specific obligations for providers of services under a public process of installation and sharing of telecoms infrastructure. regime, related specifically to the continuity and universalisation of Cable television is also regulated by Law No. 12,485/2011, which the services. For telecom services of private interest, on the other aims to foster competition, creates quotas for Brazilian content and hand, Anatel grants a simple authorisation. Moreover, there is a cross- regulates issues related to the Contribution to the Development of the ownership rule that prevents companies from exploring the same Brazilian Film Industry (Condecine). The Brazilian film agency (Ancine), telecom service in both public and private regimes, except if they are which was created by Provisional Measure No. 2,228-1/2001, has in different areas. authority over the editorial activities involved in the cable television Concessions are granted by Anatel through a bidding process, industry, such as production and programming. regulated by the GTL. Also, it can only be granted to companies incor- Further, the Civil Rights Framework for the Internet – or Internet porated under Brazilian Law, with headquarters and administration in Act – (Law No. 12,965/2014), as well as its regulation (Decree No. Brazil, with the sole purpose of providing telecom services. The term of 8,771/2016), establishes principles, guarantees, rights and duties for the concession may be up to 20 years with the possibility of renewal for the use of the internet in Brazil, as well as guidelines for state-oriented an equal additional period. action concerning such matters. Authorisations, on the other hand, are granted by Anatel through Regarding foreign ownership restrictions, article I of Decree No. an administrative proceeding where the interested party has to demon- 2,617/1998 outlines that concessions, permission, and authorisations for strate its financial and technical capacity to provide the telecom service the exploitation of telecoms services of public interest (which comprise it is applying for. The price charged for authorisations is approximately fixed and mobile telecoms, pay TV and broadband internet) may be granted US$75. For services under the public regime, periodic fees are charged or issued only to companies that meet the following requirements: according to Anatel’s regulation. • the company must be incorporated under Brazilian law and must Fixed phone services are considered services of collective interest have its headquarters and management in Brazil; and and are rendered under a public regime. • the majority of its quotas or shares with voting rights have to Mobile phones, on the other hand, are considered services of be owned directly by either natural persons resident in Brazil or collective interest but are rendered under a private regime – once companies governed by Brazilian law and with their headquarters the authorisation is granted, providers can use the necessary radio and administration in Brazil. frequencies for 15 years, renewable for an equal additional period. For 3G and 4G technologies, concessions are granted through a bidding In other words, the limitation imposed on foreign entities is the direct process. In 2012, Anatel promoted a bidding procedure of 2,500MHz for control of companies that hold concessions, permission, and authori- 4G networks, and the providers Vivo, Tim, Claro, Oi, Sky and Sunrise sations to exploit telecommunication services, except for television acquired the frequencies. broadcasters. Indirect control of such companies by foreign entities is The deployment of 5G networks is still in progress in Brazil, and the not prohibited, as evidenced by the large international telecom groups goal is that the technology will be available in all main cities by July 2022. holding possessions in Brazil. Since late 2020, telecom operators have initiated tests in 5G networks Law No. 10,610/2002 forbids foreign ownership that exceeds 30 per in several cities, such as São Paulo, Rio de Janeiro, Belo Horizonte, cent of the capital stock and the voting capital of news companies and Florianópolis, Santos, Porto Alegre, Brasília, Manaus and others.

4 Telecoms & Media 2021 © Law Business Research 2021 Huck Otranto Camargo Advogados Brazil

As for satellites, according to the GTL, providing space capacity Law No. 12.529/2011, in turn, gives CADE jurisdiction to previously is not a telecoms service itself. However, Anatel is responsible for analyse and approve or reprove certain transactions that could present providing satellite exploitation rights to companies, whereby the satel- a risk for the balance of competition in the market. lite operators can only provide space capacity to entities who own concessions, permits, or authorisation to utilise telecom services. Structural or functional separation Anatel may grant satellite exploitation rights to foreign entities as 5 Is there a legal basis for requiring structural or functional long as public consultation is carried out to confer the exploitation rights separation between an operator’s network and service to the applicant. Nonetheless, the party must fulfil specific requirements activities? Has structural or functional separation been to guarantee the correct use of the satellite, such as the appointment of introduced or is it being contemplated? a representative in Brazil (which must be a Brazilian company) and to only offer the use of such satellite to authorised parties. There are no rules regarding the structural or functional separation Anatel, through its Resolution 220/2000, protects Brazilian compa- between an operator’s network and service activities in Brazil. nies that exploit satellite services, giving preference to such Brazilian companies whenever it offers equivalent conditions to those offered by Universal service obligations and financing foreign entities. Such equivalence is measured through terms, price, 6 Outline any universal service obligations. How is provision of and technical parameters. these services financed? To obtain the right to exploit satellites, the interested party must file a requirement before Anatel, specifying the target area and the Currently, the only service subject to a public regime, and, therefore, conditions for the use of the satellite. If there is more than one party subject to obligations of continuity and universality, is the fixed tele- interested, Anatel will set up an auction or public procurement. Such phone service. Such obligations do not apply either to broadband or to auctions or public procurement will not be mandatory if unnecessary, any other services. meaning if there is only one interested party, or if there is enough space The General Plan of Goals for Universalization of Services (Decree for all interested parties. No. 7512/2011) established a series of obligations for fixed telephony As for public Wi-Fi services, Decree No. 7,175/2010 provides the providers and public authorities to grant the population general access National Broadband Plan, which aims to promote and spread the use to fixed telephony. In recent years, however, the relevance of fixed and supply of goods, information, and communication technology telephony has been questioned, and the focus changed to the internet services. The National Broadband Plan is an attempt to increase access – nowadays, many believe that internet universality is more important to broadband internet connection services, especially in the areas less than fixed telephony, which is gradually being abandoned. served in terms of technology, promoting digital inclusion. Nonetheless, Law No. 9,998/2000 has created the Universal Fund for Telecoms there are no concrete plans for a broad public Wi-Fi project in Brazil. Services, dedicated to helping operators of fixed telephone services to comply with its universalisation obligations. Flexibility in spectrum use 3 Do spectrum licences generally specify the permitted use Number allocation and portability or is permitted use (fully or partly) unrestricted? Is licensed 7 Describe the number allocation scheme and number spectrum tradable or assignable? portability regime in your jurisdiction.

According to the GTL, the spectrum of radio frequencies is classified Numbers are allocated according to Resolution No. 86/1998 (fixed as a public asset, and the use of radio frequencies is conditioned to the telephony) and Resolution No. 301/2002 (mobile), both issued by Anatel. execution of auctions if there is more than one party interested in the Portability is allowed, according to Anatel’s Resolution No. same radio frequency band. 460/2007. However, portability is only permitted within operators of the The authorisation for the use of radio frequencies granted by Anatel same service (ie, mobile-to-mobile or fixed-to-fixed). is, as a general rule, not transferable, as provided for in Resolution No. 671/2016 issued by Anatel. However, is it possible to transfer the Customer terms and conditions concession agreement itself, which will also depend on the consent 8 Are customer terms and conditions in the communications of Anatel, in which case the parties will be obligated to present the sector subject to specific rules? pertinent documents to the Agency. Therefore, sublicensing the authorisation is forbidden. Resolution No. 632/2014, issued by Anatel, regulates consumers’ According to the Regulation for the Use of Radio Frequency rights before telecom services renderers. According to the Resolution, Spectrum (Resolution No. 671/2016, Anatel), the attribution of radio consumers have the right to access adequate information about frequency bands consists of the inclusion of such bands on radio contract conditions, payment methods, cases of service suspension, frequency band attribution charts for the use of one or more communi- among others. The Resolution provides a long list of obligations with cations services. which telecom services providers need to comply regarding consumers. Moreover, all obligations outlined in the Consumer Defense Code (Law Ex-ante regulatory obligations No. 8,078/1990) fully apply to telecom services. 4 Which communications markets and segments are subject to ex-ante regulation? What remedies may be imposed?

Generally speaking, all communications markets and segments are subject to ex-ante regulation, either by Anatel or the Administrative Council for Economic Defense (CADE). According to Anatel’s Resolution No. 101/1999, for instance, Anatel must previously analyse control changes in companies or other relevant corporate restructurings. www.lexology.com/gtdt 5 © Law Business Research 2021 Brazil Huck Otranto Camargo Advogados

Net neutrality government has been trying to foster broadband internet penetration 9 Are there limits on an internet service provider’s freedom to since at least 2010, when Decree No. 7,175/2010 was enacted, which control or prioritise the type or source of data that it delivers? created the National Broadband Plan. Moreover, there is also a move- Are there any other specific regulations or guidelines on net ment towards fostering 3G and 4G bands, which are offered annually by neutrality? Anatel in bidding processes. In 2016, several discussions regarding 3G and 4G bands took place, The Internet Act, which provides the rules regarding the use of the especially because of Draft Law No. 79/2016, which proposed a certain internet in Brazil, also addresses net neutrality, which was established number of changes in the GTL. One of the changes, which at the time as one of the principles of the internet. According to the Act, internet hampered the progress of the draft law and led to its suspension, was providers responsible for the transmission, switching and routing of the possibility of telecom service providers limiting fixed internet broad- data must treat data packets without distinction based on content, origin band. In October 2019, Draft Law No. 79/2016 was converted into Law and destination, service, terminal, or application. As a corollary, band- No. 13.879/2019, which basically regulates the criteria for adaptation of width throttling is not permitted. the category of Anatel’s licence granting from concession to authorisa- Decree No. 8.771, enacted on 11 May 2016, regulated the exceptions tion and, most importantly, extinguished the rendering of services under to net neutrality, establishing that traffic discrimination or degradation the public regime so that all telecoms’ services are now provided under can only occur due to technical requirements indispensable to the the private regime. service provision and the prioritisation of emergency services. The indispensable technical requirements indicated in the Decree are those Data protection related to network security and network congestion. 12 Is there a specific data protection regime applicable to the In any case of exception to net neutrality, however, the service communications sector? provider shall adopt transparent measures to provide the user with the proper information and reasoning regarding the data transmission Data protection is primarily guaranteed by the Brazilian Federal discrimination or degradation, in accessible language. According to Constitution, which provides the inviolability of personal data and section 9, subsection 2 of Law No. 12.965/2014, the provider shall also: respect for privacy. • abstain from causing damage to the users; Data protection is also the object of the Internet Act (Law No. • act with transparency, proportionality and isonomy; 12.965/2014). According to the Act, the party responsible for collecting • inform the user in advance about the measures adopted, including and processing such data (the internet service provider (ISP)) may not those related to net security; and communicate it to third parties without the voluntary, express, and • offer services in non-discriminatory conditions and abstain from informed consent of the owner of the data. Moreover, the ISP must anticompetitive conduct. observe certain strict principles, and the disclosure of personal data to third parties is only allowed under judicial order. Even though article 9 of Decree No. 8,771/2016 prevents agreements The Internet Act devotes several articles to user privacy. Not only between internet services providers (ISPs) that prioritise data pack- is the disclosure of personal data restricted to judicial orders, but ages, there have been several ISPs that offered a zero rating for specific also authorities must appoint the legal basis for the request to access applications such as WhatsApp. The discussion regarding zero rating in such data, except certain basic information such as personal qualifi- Brazil is still far from over. cation, filiation, and address requested by administrative authorities. However, even for such basic information, current legislation requires Platform regulation annual publication by the authorities of reports containing statistics on 10 Is there specific legislation or regulation in place, and have personal data requests. This is an innovation brought in by Decree No. there been any enforcement initiatives relating to digital 8.771, enacted on 11 May 2016, which also regulated other matters from platforms? the Internet Act, such as net neutrality. The Internet Act applies to all ISPs that provide services in Brazil, There are no specific regulations about digital platforms in Brazil. even if the service provider is a foreign entity. Nonetheless, the Internet Act (Law No. 12,965/2014) establishes Further, specifically regarding the telecommunications sector, the principles, guarantees, rights, and obligations concerning the use of the GTL guarantees users the rights to the secrecy of communications, internet in Brazil, including for internet connection access providers and privacy, and data protection. internet application providers. The most relevant regulation regarding data protection, however, Also, legislative initiatives aiming to combat disinformation and is Law No. 13.709/2018, the General Law for Personal Data Protection the dissemination of fake news are currently being discussed in the (LGPD). The LGPD, inspired by the General Data Protection Regulation Brazilian Congress. The fake news bill, Draft Law No. 2927/2020 and of the European Union, aims to protect primarily the individual’s Draft Law No. 2630/2020, intends to institute the Brazilian Law of personal data in the Brazilian territory or personal data from Brazilian Freedom, Responsibility, and Transparency on the Internet, creating citizens processed by foreign companies. The LGPD sets several several rules for the functioning of social networks and messaging obligations for companies and agencies regarding the treatment of applications. personal data. The LGPD became effective on 18 September 2020. Nonetheless, Next-Generation-Access (NGA) networks according to Law No. 14.010/2020, the provisions addressing adminis- 11 Are there specific regulatory obligations applicable to trative penalties shall only be enforced from August 2021. NGA networks? Is there a government financial scheme to promote basic broadband or NGA broadband penetration?

NGA networks are still not subject to any specific regulation in Brazil, although new generation networks (especially the internet of things (IoT) – through the National IoT Plan) are becoming a reality. The

6 Telecoms & Media 2021 © Law Business Research 2021 Huck Otranto Camargo Advogados Brazil

Cybersecurity under the public regime (currently only fixed telephony) and the adop- 13 Is there specific legislation or regulation in place concerning tion of a fully private regime, in which the provision of all telecom cybersecurity or network security in your jurisdiction? services would only need to be authorised by Anatel.

Decree No 10.222, enacted on 5 February 2020, established Brazil’s first MEDIA National Cybersecurity Strategy (E-Ciber), setting out three strategic goals that intend to guide the Country’s approach for the period of 2020 Regulatory and institutional structure to 2023. Those goals include making Brazil a country of reference in 17 Summarise the regulatory framework for the media sector in the cybersecurity sphere and strengthening the country’s resilience your jurisdiction. towards cyber threats. One of the key initiatives envisioned in the E-Ciber Strategy is a cybersecurity law, which has not yet been drafted. Broadcasting services are regulated by Law No. 4.117/1962 (the Also, Law No. 12,737/2012 provides that it is a felony to invade Brazilian Telecommunications Code – not to be confused with the any computing device whether or not connected to the internet, by General Telecommunications Law) and related decrees, especially circumventing security mechanisms to obtain, alter or destroy data, or Decree No. 52.795/1963. to install any program, virus, or other functionality to obtain unlawful Radio frequencies are public assets, which the government, through gain without the consent of the owner of such device. The penalty Anatel, licences to private parties that wish to provide broadcasting for this crime is imprisonment and fines. The length of imprisonment services. It is worth stating that, apart from technical issues related to and the amount of the fines depending on the outcome of the criminal radio frequencies, Anatel does not have authority over broadcasters. proceedings. The concessions are valid for 10 years for radio broadcasting and 15 years for television, renewable for equal periods successively, Big data according to change proposed by Law No. 13.424/2017. 14 Is there specific legislation or regulation in place, and have The main regulatory frameworks for cable television are the there been any enforcement initiatives in your jurisdiction, General Telecommunications Law (Law No. 9,472/1997) and the SeAC addressing the legal challenges raised by big data? Law (Law No. 12.485/2011). The legislation provides the principles to be followed by cable television providers and sets up cross-ownership No specific legislation or regulation addresses the legal issues arising restrictions. from big data. However, the use of big data must comply with Law No. Law No. 12.485/2011 also regulates the activities included in the 13.709/2018, the LGPD, which requires that the processing of personal audiovisual communication field, which are production and program- data occur according to one of the legal basis provided for such law. ming (regulated by Ancine), as well as packaging and distribution The processing of personal data must also be compatible with the (regulated by Anatel). purpose informed to the data owner and limited to the minimum necessary to achieve this specific purpose. The LGPD also ensures several Ownership restrictions rights to data owners, including the right to revoke consent and the 18 Do any foreign ownership restrictions apply to media right to anonymise, block, or delete unnecessary or excessive data. services? Is the ownership or control of broadcasters Concerning automated decision making (such as profiling), article otherwise restricted? Are there any regulations in relation 20 of the LGPD guarantees data owners the right to request a review of to the cross-ownership of media companies, including radio, decisions taken solely based on automated processing of personal data television and newspapers? whenever these decisions affect their interests. Moreover, if requested, the data controller must provide clear and relevant information on the Article 222 of the Brazilian Constitution states that the ownership of criteria and procedures used to produce the automated decision. news and broadcasting companies is exclusive to native Brazilians or Finally, the LGPD also provides other guidelines regarding big data, naturalised Brazilians who have been citizens for at least 10 years, or such as the use of anonymised data. to legal entities incorporated according to Brazilian laws, with headquarters in Brazil. In any case, at least 70 per cent of such companies’ Data localisation total and voting capital must be owned, directly or indirectly, by native 15 Are there any laws or regulations that require data to be Brazilians or by naturalised Brazilians for more than 10 years, who shall stored locally in the jurisdiction? manage the companies and control the programming. Law No. 10,610/2002 also prevents foreign ownership exceeding 30 Brazilian legislation does not require that data remain stored within its per cent of the capital stock and the voting capital of news and broad- jurisdiction. Nevertheless, the LGPD imposes certain limitations to the casting companies. international transfer of personal data, describing in its article 33 the Regarding cross-ownership of media companies, Law No. hypothesis in which the transfer is permitted. The transfer of data by a 12.485/2011 expressly forbids radio and television broadcasters, data controller established in Brazil to a third party in a foreign country producers, and programme makers to control or own more than 50 per is not permitted, for example, when the other country does not ensure a cent of the total and voting shares of collective interest telecommunica- certain level of data protection. tions services providers. In turn, the latter is forbidden to own or control more than 30 per cent of the total and voting shares of radio and televi- Key trends and expected changes sion broadcasters, producers, and programme makers. 16 Summarise the key emerging trends and hot topics in communications regulation in your jurisdiction.

The most relevant discussions in telecommunications regulation are currently related to Law No. 13.879/2019 (previous Draft Law No. 79/2016), which establishes a certain number of changes to the GTL. One of such changes is regarding the extinction of services rendered www.lexology.com/gtdt 7 © Law Business Research 2021 Brazil Huck Otranto Camargo Advogados

Licensing requirements Must-carry obligations 19 What are the licensing requirements for broadcasting, 22 Are there regulations specifying a basic package of including the fees payable and the timescale for the programmes that must be carried by operators’ broadcasting necessary authorisations? distribution networks? Is there a mechanism for financing the costs of such obligations? The General Telecommunications Law (GTL) provides that the granting of licences is subject to a bidding process conducted by the Ministry of Law No. 12.485/11 outlines a list of channels that all programme makers Communications. To obtain the authorisation to use a radio frequency, must offer in their packages, including open television channels and the interested party must comply with all requirements of the bidding governmental channels, among others. There are no mechanisms for process and pay a public price, which is calculated by a formula provided financing the costs of such obligations, and the providers must deliver by Anatel’s Resolution No. 695/2018 and depends on several features, the mandatory channels at their expense, except if proven that the fulfil- such as bandwidth, term, number of inhabitants in the targeted area, ment of these obligations is impracticable by the provider. among other things. It is important to note that radiofrequency licences are valid for a certain period, after which the party must pay the public Regulation of new media content price again to continue using the band. After the bidding, Congress must 23 Is new media content and its delivery regulated differently approve the licence. There is no timetable provided by law. To obtain the from traditional broadcast media? How? authorisation for television broadcasting, the interested party must also pay a public price, charged at 400 Brazilian reais. There is no specific regulation for new media content and its delivery. Nonetheless, Congress is discussing two bills to regulate the video on Foreign programmes and local content requirements demand (VOD) market, especially subscription VOD (SVOD) delivered 20 Are there any regulations concerning the broadcasting through the internet. of foreign-produced programmes? Do the rules require a In September 2019, Ancine launched a new Public Consultation minimum amount of local content? What types of media fall to discuss the regulation of VOD. After the conclusion of this Public outside this regime? Consultation, Ancine, through its Resolution 2/2019, designated a Working Group to propose a law that would regulate VOD services. SeAC Law (Law No. 12.485/2011), which regulates the cable television In 2020, the Working Group released its report, bringing significant sector, imposes local content quotas of at least 210 minutes per week changes to the model that was previously being discussed. However, at prime time to certain cable television channels, half of whose content due to the covid-19 pandemic, the report is still pending deliberation. must be produced by independent Brazilian producers. Moreover, the same law imposes quotas for local cable television channels that must Digital switchover be offered by cable television operators and programme makers. 24 When is the switchover from analogue to digital broadcasting required or when did it occur? How will radio frequencies Advertising freed up by the switchover be reallocated? 21 How is broadcast media advertising regulated? Is online advertising subject to the same regulation? The switchover from analogue to digital started with Decree No. 5,820/2006, which was altered by Decree No. 8.061/2013, which In Brazil, there are both governmental rules and self-regulation rules provided that the Ministry of Communications would establish the time regarding broadcast media advertising. When it comes to self-regula- frame for the switchover. In 2016, the state of São Paulo took the first tion, the National Publicity Self-Regulation Board (CONAR), established steps towards making all television broadcasting digital. On 29 March in 1980, provides the enforcement of the Advertisement Self-Regulation 2017, the analogue broadcasting signal was shut down in São Paulo Brazilian Code, dealing with litigation and disputes regarding consumers city and 37 other cities around it. On 9 January 2019, the analogue and broadcasters. signal was switched off in 80 cities, and currently, 1,379 cities (about Under the Brazilian Telecommunications Code (Law No. 128 million people) have already switched to digital broadcasting. The 4.117/1962), the time dedicated to the broadcast of commercial adver- complete transition of the remaining 4,191 cities, however, is estimated tisements of broadcasting concessionaires and permissionaires cannot for 2023, but around 60 per cent of the population already has access to exceed 25 per cent of its daily programming. digital broadcasting. Law No. 9.294/1996 also imposes a series of limitations regarding After the switchover, the radio frequencies freed up (700MHz) advertising of specific products such as tobacco, alcoholic beverages, will have their use designated to mobile networks, improving medication, treatments, and others. 4G-based services. When it comes to online advertising, however, there are no regulations other than those mentioned in the Advertisement Self-Regulation Digital formats Brazilian Code, which states that all advertising on the internet should 25 Does regulation restrict how broadcasters can use their be made with special care, with a more restrictive interpretation of all spectrum? rules that may apply to it. Therefore, as with other advertising, internet advertising should respect the Consumer Defense Code and all rules Anatel is the competent authority for regulating technical aspects enforced by CONAR. related to the radio frequencies dedicated to each telecommunication service. However, there is no specific discipline regarding how each broadcaster uses the spectrum.

8 Telecoms & Media 2021 © Law Business Research 2021 Huck Otranto Camargo Advogados Brazil

Media plurality 26 Is there any process for assessing or regulating media plurality (or a similar concept) in your jurisdiction? May the authorities require companies to take any steps as a result of such an assessment?

There is no specific legislation regarding media plurality in Brazil. SeAC Law (Law No. 12.485/2011), which regulates cable television, provides that the diversity of cultures, sources of information, production and Maurício Vedovato [email protected] programming is one of its principles (article 3, II). Daniela Maria Rosa Nascimento Key trends and expected changes [email protected] 27 Provide a summary of key emerging trends and hot topics in media regulation in your country. Av. Brigadeiro Faria Lima, 1744 6th floor Ancine is likely to propose the regulation of VOD, including the service 01451 910 provided by internet service providers over the top, such as Netflix, Sao Paulo Amazon Prime, and Disney+. Brazil Also, regulations related to 5G should be a main hot topic for the Tel: +55 11 3038 1000 next few years. Fax: +55 11 3038 1100 www.lhoc.com.br REGULATORY AGENCIES AND COMPETITION LAW

Regulatory agencies 28 Which body or bodies regulate the communications and Competition law developments media sectors? Is the communications regulator separate 30 Describe the main competition law trends and key merger from the broadcasting or antitrust regulator? Are there and antitrust decisions in the communications and media mechanisms to avoid conflicting jurisdiction? Is there a sectors in your jurisdiction over the past year. specific mechanism to ensure the consistent application of competition and sectoral regulation? Mergers and acquisitions in the telecom market which imply the transfer of the telecom provider’s control, are subject to Anatel’s approval, The General Telecommunications Law (GTL) created the Brazilian according to Resolution No. 101/1999. Telecoms Agency (Anatel), which is the agency responsible for the The parties involved in the operation must request the previous sector’s regulation, including the granting of licences and authorisa- approval of Anatel for the transfer of control, along with the documents tions for the exploitation of telecom services. It is responsible for all required by the Resolution No. 101/1999. Anatel will analyse the request telecoms services regulation, including the technical aspects related to and authorise, or not, the operation. radio frequencies. Additionally, CADE is also competent to analyse such operations, The Brazilian Film Agency (Ancine) also regulates the sector, if the conditions provided in Law No. 12,529/2011 and Interministerial having authority over the film industry, editorial activities involved in Ordinance No. 994 are fulfilled. the cable television industry, such as producing and programming, and The last big merger analysed by CADE and Anatel was the acqui- gaming, among others. sition of Time Warner by AT&T (the AT&T/Time Warner merger). The Broadcasters are subject to the control of the Ministry of transaction, valued at US$84.5 billion, was first announced in October Communications. 2016 and a year later CADE rendered its decision, approving the deal Law No. 12,529/2011, which regulates competition, is fully appli- with restrictions. The approval of the transaction was conditioned to the cable to the telecoms sector. The Administrative Council for Economic signature of a Merger Control Agreement. Through this agreement, the Defense (CADE) is competent to analyse antitrust matters related to the companies committed to complying with several obligations, such as telecom sector, such as anticompetitive conduct and mergers. maintaining Sky Brasil and Time Warner’s programming channels as In the specific case of mergers, telecom providers, as well as independent companies. companies in other markets, are only obligated to submit the operation The transaction was approved by Anatel in February 2020, in tight to CADE’s approval if certain conditions are fulfilled, such as an income voting, with three directors voting in favour and two against the opera- of at least above 750 million Brazilian reais for one party, and at least tion. The decision took longer than expected because SeAC Law (Law No. 75 million Brazilian reais for the other party. Anatel may also analyse 12.485/2011) prohibits cross-ownership between programme makers the competition aspects of a certain merger when the parties submit the (content) and operators (media); therefore, the same company is not operation for the agency’s prior approval. allowed to produce content and also distribute it in Brazil. Nonetheless, Anatel’s final decision was based on the fact that AT&T is not based Appeal procedure in Brazil. 29 How can decisions of the regulators be challenged and on Finally, in October 2020, the merger was also approved by Ancine, what bases? the Brazilian Film Agency.

The decisions of the regulators can always be challenged in federal courts, as universal access to the judiciary is a fundamental right guaranteed by the Brazilian Federal Constitution.

www.lexology.com/gtdt 9 © Law Business Research 2021 Brazil Huck Otranto Camargo Advogados

To mitigate the adverse effects of the covid-19 pandemic on the media and cultural sector, the Brazilian government drafted and issued several legislative provisions. First, Law No. 14.017/2020 (the Aldir Blanc Act), enacted on 30 June 2020, established emergency actions to be adopted during the state of public crisis, including a 3 billion Brazilian reais transfer from the Brazilian union to the states, municipalities and the federal district destined to fulfil the emergency aid to the cultural sector. Second, Law No. 14.046/2020, enacted in August 2020, set out rules exempting suppliers of the tourism and culture sectors from refunding consumers in case of booking or event cancellations in the pandemic context, if they ensure the rescheduling of services within 18 months upon the end of the public calamity situation, or ensure the availability of credits for consumers to purchase another booking or event from the same company. Third, in February 2021, the government launched the Emergency Program for the Resumption of the Events Sector (Perse). Established by Law No. 14.148/2021, Perse allows companies of the tourism and event sectors to renegotiate their tax debts with an up to 70 per cent discount. Finally, especially in the audiovisual sector, Ancine issued a provision (No. 151-E/2020) that established administrative measures such as allowing the deferral or stay of regulatory obligations.

10 Telecoms & Media 2021 © Law Business Research 2021 China

Jingyuan Shi, Jenny Liu and Yuchen Lai Simmons & Simmons LLP

Liberation for foreign investment restrictions in COMMUNICATIONS POLICY VATS business telecoms business in all free trade zones in China Regulatory and institutional structure Online app stores (within The restriction on foreign investment ratio was the scope of internet removed, which means the foreign investment 1 Summarise the regulatory framework for the communications information services) may hold up to 100% equity in the business. sector. Do any foreign ownership restrictions apply to The restriction on foreign investment ratio was communications services? Internet access services removed, which means the foreign investment may hold up to 100% equity in the business. The key regulations in the telecommunications sector include: • The Telecoms Regulation promulgated by the State Council, effective in 2000, and later amended in 2014 and 2016 respectively. On 31 December 2020, the MOFCOM and the National Development and It renders the Ministry of Industry and Information Technology Reform Commission issued the Negative list for Hainan Free Trade Port, (MIIT) the authority to regulate the telecoms business, comprising effective on 1 February 2021, further liberating the foreign investment basic telecoms services (BTS) and value-added telecoms services restrictions in various sectors, including allowing enterprises with regis- (VATS), and to grant operational licences for telecoms business. tered entities and service facilities in Hainan Free Trade Port to operate • The Administrative Regulation for Foreign Investment in Telecoms internet data centre and content distribution network business within Business promulgated by the State Council, effective in 2001, and the territory of Hainan Free Trade Port and to international markets. later amended in 2008 and 2016. It sets out restrictions and criteria for foreign investment in BTS and VATS. Authorisation/licensing regime • The Telecommunications Business Catalogue issued by the MIIT 2 Describe the authorisation or licensing regime. with the latest version released in 2015 and amended in 2019. It sets out definitions and descriptions of different types of business Telecoms resources, as defined under the Telecoms Regulation, that would be considered either BTS or VATS. comprise fixed telephone numbers, mobile phone numbers, radio • The Foreign Investment Negative List issued by the Ministry of frequencies and satellite trajectory positions used in mobile and satel- Commerce (MOFCOM) jointly with other government agencies with lite communications, and are considered state-owned assets. The the latest version released in 2020. It sets out, among other things, MIIT is the government agency that takes charge of allocating these restrictions on foreign investment in BTS and VATS. resources. According to the Telecoms Regulation, telecoms resources can be distributed to business operators by administrative allocations These regulations reflect the undertakings given by the Chinese govern- and public auctions. Most of these telecoms resources are distributed ment in preparation for World Trade Organization (WTO) accession, via administrative allocation procedures in which: allowing for previous restrictions on foreign ownership of telecoms • telecoms operators apply to the MIIT for cross-province telecoms services to be relaxed in gradual phases. By the end of 2007, the resources (such as cross-province telephone numbers) and inter- Chinese government satisfied commitment under the WTO accession by national telecoms resources (such as satellite radio frequencies) allowing foreign investors to hold up to 49 per cent interest in BTS busi- or to the MIIT’s local counterparts at the provincial level for intra- ness and up to 50 per cent interest in VATS business. Given China’s fast province telecoms resources (such as intra-province telephone development of e-commerce business and other network applications, numbers); and the government’s confidence in the domestic telecoms business has • the MIIT and its local counterparts (as the case may be) examine the been increasing. Consequently, the government further lifted restric- applications and decide whether to allocate the required resources tions on foreign investment in several VATS businesses. within 40 days (for intra-province telecoms resources) and 60 days Foreign investment restrictions on e-commerce were liberated (for cross-province telecoms resources). as early as 2015. The 2020 Negative List further removed foreign investment restrictions on e-commerce, store-and-forward services, Telecoms resources may also be applied for during applications for call-centre services and domestic multi-party communications services; telecoms operational licences, in which case, the relevant telecoms this means that foreign investment may hold up to 100 per cent equity resources will be allocated together with the issuance of telecoms oper- in these businesses. ational licences. Additionally, the following types of VATS were opened up to foreign Absent explicit rule, most local governments adopt the same admin- investment in all Free Trade Zones in China since 2018. istrative allocation procedure in distributing public Wi-Fi resources. In 2007, the Guangdong Telecommunication Administration Bureau (the local counterpart of the MIIT) started distributing some ‘lucky’ telephone numbers (including fixed-line and mobile numbers) via www.lexology.com/gtdt 11 © Law Business Research 2021 China Simmons & Simmons LLP

public auctions. This practice was followed by other local counterparts Number allocation and portability of the MIIT. However, a detailed rule on the public auction of telecoms 7 Describe the number allocation scheme and number resources has not been issued. portability regime in your jurisdiction. Users of telecoms resources need to pay a fee, and the fee schedule is periodically reviewed by the government. The fee rates for using tele- According to the Administrative Measure for Telecoms Number Resource coms resources have been significantly reduced in recent years. Allocation issued by the MIIT, effective in 2003, and amended in 2014, telecoms operators may apply to the MIIT or its local counterparts for Flexibility in spectrum use telephone numbers (which are a type of telecoms resource). They are 3 Do spectrum licences generally specify the permitted use prohibited, however, from charging end users for use or selection of tele- or is permitted use (fully or partly) unrestricted? Is licensed phone numbers. This prohibition is not enforced now. It is customary for spectrum tradable or assignable? telecoms operators to charge end users a fee for selecting lucky numbers. Because telephone numbers are resources allocated to specific During the application process for telecoms resources, including tele- telecoms operators, they used to be not portable among different telephone numbers and radio frequencies, the applicant would need to coms operators. Since 2010, the MIIT has been urging the three mobile specify the prospective usage of such resources and the schedules carriers to give more freedom for users in choosing and changing their for deploying such resources. The MIIT or its local counterparts would service packages and to grant users the right to switch carriers but examine these usages and schedules in granting telecoms resources retain their numbers. In late 2019, the MIIT issued the Administrative and stipulate these usages and schedules, among other things, as condi- Regulation on the ‘Transfer with Numbers’ Service and the policy was tions for the grant of telecoms resources. According to the Telecoms implemented by China’s three major telecoms operators (China Mobile, Regulation, telecoms operators are required to: deploy the granted China Telecom and China Unicom). Since then, end users have been able telecoms resources within the stipulated period; and use the telecoms to switch among different carriers freely using the same number. resources only for the purpose for which they are granted. According to the Telecoms Regulation and the Administrative Customer terms and conditions Regulation for Radio issued by the State Council, effective in 1993 and 8 Are customer terms and conditions in the communications amended in 2016, telecoms resources are not tradable, nor can they sector subject to specific rules? be leased or assigned to any third party (except for use by end users) without prior approval by the government. Customer terms and conditions in telecoms services are subject to Telecoms Service Rules issued by the MIIT and effective in 2005 and Ex-ante regulatory obligations the Notice on Matters Concerning Telecoms Service Agreements (the 4 Which communications markets and segments are subject to Telecoms Notice) issued by the MIIT and effective in 2017. The key ex-ante regulation? What remedies may be imposed? rules include: • customer terms and conditions must include, among other things, There is no definition of ex-ante regulation under Chinese law. Chinese a fee schedule, service levels and ways for customers to raise law is a combination of ex-ante and ex-post regulations, and the same complaints; is true for Chinese law in the communications sector. It is unrealistic to • telecoms operators must verify customers’ real identities before categorise certain types of communications law as ex-ante, or the other entering into telecoms service agreements with them; way round. • telecoms operators must not reject entering into telecoms service agreements with those users who are eligible to receive such tele- Structural or functional separation coms services; 5 Is there a legal basis for requiring structural or functional • telecoms operators must provide services to users on a fair and separation between an operator’s network and service non-discriminatory basis; activities? Has structural or functional separation been • telecoms operators must not change any fee schedule or service introduced or is it being contemplated? level without the consent of the customers; • telecoms operators must notify customers of any incident that may At present, there is no law or regulation relating to structural or func- affect the use of telecoms services; and tional separation, nor is there any plan to enact such regulation. On the • telecoms operators must give customers notice at least 30 days contrary, companies are not only allowed, but also, from a policy aspect, in advance should the telecom operators cease provision of any encouraged, to engage in both structural and functional business to service to which the customers subscribe. achieve efficiency and to maximise the usage of telecoms resources. Net neutrality Universal service obligations and financing 9 Are there limits on an internet service provider’s freedom to 6 Outline any universal service obligations. How is provision of control or prioritise the type or source of data that it delivers? these services financed? Are there any other specific regulations or guidelines on net neutrality? At present, no law or regulation imposes universal service obligations. However, the big telecoms carriers (in which the state has a significant There is no specific regulation on net neutrality. However, the Telecoms interest) have a public interest function to build and maintain telecoms Notice has a general provision requiring that telecoms operators provide infrastructure in the mid-west and other remote areas. The government telecoms services to users on a non-discriminatory basis. In other words, also provides subsidies and other preferential treatment to encourage telecoms services providers should not prioritise the delivery of any data telecoms carriers to offer services to these mid-west and remote areas. or service for specific customers. However, net neutrality is not a hot topic because the major telecoms carriers in China have a public function to provide telecoms services to the public and profitability is not the only pursuit.

12 Telecoms & Media 2021 © Law Business Research 2021 Simmons & Simmons LLP China

Platform regulation Concerning live-streaming platforms, the Administrative Rule on 10 Is there specific legislation or regulation in place, and have Internet Live-streaming Service (the Live-streaming Rule) issued by there been any enforcement initiatives relating to digital the Cyberspace Administration of China (CAC) and effective from 2016 platforms? applies. The Live-streaming Rule provides for, among others, that the live streaming platform operators must verify the real identity of the In China, operations of digital platforms are considered a value-added performers before allowing them to perform on the platforms and must telecoms service and subject to licensing requirements under the maintain the technical capacity and management mechanisms to block Administrative Measure for Telecoms Business Licences issued by the the broadcasting of illegal shows immediately upon discovering the MIIT and effective in 2009 and later amended in 2017. Depending on the illegality. nature of the digital platforms, additional regulations may apply. Concerning the operation of point-to-point (P2P) connection lending Concerning the operation of e-commerce platforms, the e-commerce platforms, the Provisional Measure for Administration of Network Lending law of China (E-commerce Law) applies. The E-commerce Law is prom- Information Intermediate Services (the P2P Measure) was issued by the ulgated by the Standing Committee of the People’s Congress of China China Banking Regulatory Commission, the MIIT, the Ministry of Public and effective from 1 January 2019. It is China’s first comprehensive Security and the CAC and effective in 2016. The P2P Measure requires legislation governing the field of e-commerce. It sets out the definitions online lending information intermediaries to register with the local finan- such as ‘e-commerce operator’ and ‘e-commerce platform operator’ and cial regulatory bodies upon their establishment, include online lending different requirements on e-commerce operators and e-commerce plat- information intermediary in the business scope of their business licence form operators. and obtain a telecommunication business licence from MIIT. The local E-commerce operators are broadly defined as individuals, legal financial authorities shall categorise the operators and disclose their filing entities and organisations who carry out business activities through information to the public. P2P lending platforms shall check borrowers’ information networks such as the internet to sell goods or provide creditworthiness before allowing them to post borrowing requests on the services, including e-commerce platforms operators, business opera- platforms and adopt proper measures to ensure information security. The tors on e-commerce platforms, and others selling goods or providing P2P Measure also prohibits platform operators from, among other things: services on their self-operated website or other network services. The • borrowing money through their P2P lending platforms for their own key requirements for e-commerce operators include: use or for use by their affiliates; • with a few exemptions such as home-made small individual busi- • directly or indirectly pooling money from borrowers; nesses, all e-commerce operators are required to complete business • providing guarantees or assurance for repayment of principals or registration and obtain the requisite sector licence where required interest, or both; (eg, food, drug and medical device trading), and shall disclose this • marketing lending products to those other than users registered licence information on its website in a notable way; with their platforms on a real-name basis; • e-commerce operators shall pay applicable tax and shall issue • distributing banking, security, fund, insurance or trust products or invoices or receipts; tying lending products with banking, security, fund, insurance or • e-commerce operators shall disclose product information in a trust products sold by third parties; or complete, truthful, accurate and timely manner; • splitting financing projects. • the goods or services provided by the e-commerce operators shall comply with requirements for personal or property safety and envi- From 2017 to 2019, the Chinese government and relevant regulatory ronmental protection; and authorities issued various regulations governing the P2P online lending • e-commerce operators shall comply with data protection regulations industry. The main purpose was to regulate P2P industry behaviour and concerning the collection and use of customer personal information. enhance supervision of the industry. Concerning the operation of online education in the form of a E-commerce platform operators are defined as legal entities or organi- mobile app, the Administrative Measures for the Archival Filing of Mobile sations that provide services, including online trading sites, trading Internet Education Applications (the Measures for Education App) issued matchmaking and information distribution for two or multiple trading by the Ministry of Education in November 2019 apply. The Measures parties to conclude transactions independently. The key requirements for Education App requires education app service providers and insti- for e-commerce platform operators include: tutional users to apply for registration on National Education Resource • e-commerce platform operators must verify the real identity of Public Service Portal (http://app.eduyun.cn/). The registration processes the operators who apply to sell goods or provide services on the for educational app providers and institutional users are different. platform and submit the identification information and tax-related Educational app providers must complete an Internet Content Provider information to competent market administration and tax authorities; (ICP) filing and Cybersecurity Multi-level Protection (MLP) registration • e-commerce platform operators are required to keep records of before applying for the registration of the educational app, while the goods and services information as well as transaction records for institutional users of the educational app do not need to apply for an ICP not less than three years; and filing and Cybersecurity MLP registration, but can only register to use • e-commerce platform operators will have joint and several liability an educational app that has completed the provider registration process. with e-commerce operators, where the e-commerce platform oper- There has been a wave of strong enforcement actions taken by ator knows, or should have known, that the relevant goods and Chinese regulators against internet platform giants for violations of anti- services do not comply with the relevant requirements for personal trust law. In April 2021, the e-commerce platform operator Alibaba was or property safety or other legitimate interests of consumers, or has imposed with an administrative fine of 18.2 billion renminbi by the State violated another’s intellectual property rights and the e-commerce Administration for Market Regulation (SAMR) for abuse of its market- platform operator fails to take any necessary measures. dominant position with its Choose One from Two policy (conduct of exclusive dealing). This is the highest fine ever imposed under Chinese Also, the E-commerce Law sets out the requirements concerning Anti-trust Law. Following Alibaba’s case, the SAMR announced that it has e-commerce contracts, e-payment, e-commerce dispute resolution, initiated a formal investigation against Meituan, the leading food delivery cybersecurity measures as well as platform policies. platform operator in China, for similar Choose-One-from-Two behaviours. www.lexology.com/gtdt 13 © Law Business Research 2021 China Simmons & Simmons LLP

Next-Generation-Access (NGA) networks Guideline is not a mandatory regulation, it sets out the best practice 11 Are there specific regulatory obligations applicable to recommended by MPS and will likely serve as an important reference in NGA networks? Is there a government financial scheme to the process of law enforcement. promote basic broadband or NGA broadband penetration? Further, some non-mandatory national standards also provide detailed and practical guidance for market players on the best practice There is no specific regulation on 5G networks. The government, of data protection. however, is encouraging the development and use of 5G technology China’s draft Personal Information Protection Law (PIPL) has just through government subsidies. Additionally, the government encour- gone through second reading by the Standing Committee of the National ages industrial funds to invest in 5G-related businesses. People’s Congress of China and the draft is now near final form and In June 2019, the MIIT issued 5G commercial use licences to all expected to be finalised very soon. Once it comes into effect, it will be three big telecoms carriers in China, as well as the China Broadcasting the first comprehensive law on personal data protection in China. The Network Corporation (CBN), and they have been offering 5G commercial draft PIPL applies to all sectors. As a very general comment, it borrows use products and services to end customers since late 2019. many key concepts from the GDPR, including significantly increased administrative sanctions, while also keeps many Chinese law features, Data protection which are either out of legacy legal provisions in existing Chinese law 12 Is there a specific data protection regime applicable to the or out of national security considerations and other local economic and communications sector? business reasons.

There is no single comprehensive law that specifically applies to the Cybersecurity communications sector. Data protections applicable to the communica- 13 Is there specific legislation or regulation in place concerning tions sector are distributed in different regulations and measures. cybersecurity or network security in your jurisdiction? The Data Security Law (DSL) was promulgated on 10 June and will take effect from 1 September 2021. Being the first fundamental law on The Cybersecurity Law promulgated by the Standing Committee of data security in China, the DSL sets out the overall principles and struc- the People’s Congress of China, effective on 1 June 2017, remains the ture of China’s data security legal regime from a national security and key piece of law regulating cybersecurity in China. The Cybersecurity sovereignty point of view. A key concept under this new law is the cate- Law brings in several cybersecurity requirements at ministerial rule gorised and hierarchical data protection system. The specific scope and level and applicable to specific business sectors onto the level of catalogues of ‘important data’ are to be formulated and published by congress-made legislation and gives them wide applications; it also regional and sectoral regulators. Cross-border transfer of such ‘impor- codifies some cybersecurity practice (eg, the blocking of illegal websites tant data’ is subject to specific requirements. outside China). The Administrative Measure for Internet Email Services issued by The Cybersecurity Law is not primarily designed to regulate private the MIIT and effective from 2006 prohibits sending spam emails and behaviour; rather, it is designed to engage and authorise various govern- prohibits illegal collection and sales of personal email addresses. ment agencies to enact detailed administrative rules on cybersecurity The Decision on Strengthening Protection on Network Information and to enforce these rules. In summary, the Cybersecurity Law covers promulgated by the Standing Committee of the People’s Congress and the following contents. effective from 2013 sets out general principles on the protection of personal information in an electronic form. Cybersecurity obligations of network operators The Administrative Measures for Protection of Information of The Cybersecurity Law requires network operators (an operator is Telecoms Users and Internet Users (the Information Protection ‘the owner or operator of a network or a network service provider’) to Measure) was issued by the MIIT and effective in 2013. The Information implement the cybersecurity multi-level protection scheme and take the Protection Measure sets out relatively detailed rules on the protection following measures to safeguard networks from interference, destruc- of personal data applicable in the telecoms business and internet busi- tion or unauthorised access, and to prevent network data from being ness. These rules include: leaked, tampered with or stolen: • business operators must seek individuals’ informed consent to the • to establish internal cybersecurity policies and procedures, collection and use of their personal data; appoint a cybersecurity officer and implement the cybersecurity • business operators must only collect and retain personal data that obligations; is necessary for providing the services; • to implement proper technical measures to prevent computer • business operators must adopt proper technical and managerial viruses and cyber attacks, network intrusions and other harmful measures to protect the safety of personal data; acts of network security; • business operators must provide channels for individuals to • to implement technical measures to monitor and record network communicate with them concerning data privacy practices and operation status and network security incidents, and retain rele- possible data leakage; and vant network logs for at least six months; and • should any incident occur that results in data leakage, business • to implement measures such as data classification, backup of operators must report the case to the regulator and the affected important data, and encryption. individuals. Extra burdens on critical information infrastructure operators The Guideline on Internet Personal Information Security Protection (the The Cybersecurity Law imposes the following extra security obligations Guideline), promulgated by the Ministry of Public Security (MPS) in April on operators of critical information infrastructure (CII), which refers to 2019, applies to companies providing services via the internet. It sets networks used in public communications, information services, energy, out detailed requirements on how personal information holders should public transportation, water conservancy, finance, public services protect personal information throughout the information life cycle, and electronic government as well as those networks of which the covering the collection, retention, use, deletion, third-party processing, failure would possibly harm national security, national economy or sharing, transfer and disclosure of personal information. While the public interest:

14 Telecoms & Media 2021 © Law Business Research 2021 Simmons & Simmons LLP China

• to establish special security management institutions, designate • boost the development of big-data-related business; persons in charge of security management and conduct security • encourage the sharing of information resources among busi- background checks on those persons in charge and personnel in ness sectors; key positions; • coordinate and build a national industrial big data platform and • to conduct cybersecurity education, technical training and skill promote the deeper exploitation of industrial big data; and assessment for employees periodically; • regulate big data business from a public security and national • to perform disaster recovery backups of critical systems and sovereignty aspect. databases; • to formulate emergency response plans for cybersecurity incidents Data localisation and organise periodic drills; 15 Are there any laws or regulations that require data to be • to conduct security reviews for the procurement of products and stored locally in the jurisdiction? services that may affect national security; • to enter into confidentiality agreements with suppliers; Under the Cybersecurity Law, personal information and other important • to store personal information and important data collected and data that operators of CII collect or generate in China must be stored in generated by CII operators during their operation in China; or, if China. If such personal information and important data is to be trans- necessary, conduct a security assessment before transferring such ferred outside of China for business needs, it shall be subject to a prior data outside of China; and security assessment. The Data Security Law provides that cross-border • to conduct a network security assessment at least once a year, transfer of important data by non-CII operators shall follow the rules to internally or using an entrusted cybersecurity service institution, be formulated by the Cyberspace Administration of China (CAC). and report the results and any improvement measures to compe- Some draft regulations and non-mandatory guidelines expand the tent authorities responsible for the security protection of such CII. applicability scope of data localisation and security assessment from CII operators to all network operators. Comprehensive data protection requirements Additionally, several sector-specific regulations require certain The Cybersecurity Law expands personal data protection to all data types of data or facilities to be stored within China. For example: subjects whose data is collected and stored in networks. As a result, all • population and healthcare data (including, in particular, medical network operators that collect personal data are required: records) that medical service providers generate in China; • to inform data subjects of their privacy policies; • data about financial transactions and banking customers that • to only collect data that is necessary for providing their services; banks and other financial institutions collect in China; • to seek data subjects’ consent for the collection and use of • data about personal creditworthiness that credit rating institutions personal data; collect in China; • to adopt technical and managerial measures to protect the safety • operational and financial data of insurance companies estab- of the data they collect; and lished in China; • to inform the government and relevant data subjects of any signifi- • servers of online car-hailing service providers; cant data leakage incident. • servers of online publishing houses that operate in China; • servers storing map data of internet map services providers; and Cooperation with the government • servers of off-campus online training providers. The Cybersecurity Law requires network operators to cooperate with the government for cybersecurity and to prevent crimes in cyberspace, Under the draft PIPL, for CII operators and data processors (which are including: equivalent to the data controllers’ concept under the EU General Data • to provide technical support to the government in government Protection Regulation (GDPR)) who are processing a large volume of inspections; personal data exceeding a certain threshold, any transfer of personal • to verify users’ real identities before providing network services data outside of China shall be subject to a prior security assessment and to retain such identity information; and completed by the CAC, the primary data regulator in China. Other • to take down and to prevent the spread of illegal information cross-border data transfers may rely on other legal grounds, including posted or transmitted by their networks. a standard data transfer agreement which is similar to the GDPR Standard Contractual Clauses concept. Big data 14 Is there specific legislation or regulation in place, and have Key trends and expected changes there been any enforcement initiatives in your jurisdiction, 16 Summarise the key emerging trends and hot topics in addressing the legal challenges raised by big data? communications regulation in your jurisdiction.

There is no specific legislation on big data in China. The government, Telecom operators in China were conservative in their approach to eSIMs however, issued policies to encourage big-data-related business. a few years ago. However, as the internet of things (IoT) has developed These policies include the Notice of Action Plan to Encourage Big Data rapidly, their attitudes have recently started to change. Currently, eSIMs Development issued by the State Council in 2015, the Development have not been formally permitted nationwide in China, but have been Scheme for Big Data Business issued by the MIIT in 2017, the Guiding permitted on a trial basis in several cities such as Shanghai, Shenzhen, Opinion of Development of Industrial Big Data issued by the MIIT in 2020 Guangzhou and Tianjin by the three Chinese telecom operators (China and the Data Security Law promulgated in 2021. Under these policies Unicom, China Mobile and China Telecom) since 2018. the government will: On 13 December 2019, China Unicom obtained an approval from • implement a ‘big data’ strategy, promote the construction of data the MIIT to expand its eSIM pilot adoption nationwide. However, the infrastructures and encourage the innovative application of data in approval is subject to some restrictions; for example, the eSIMs shall be various sectors and areas; used in the IoT area, and the use of eSIMs should be limited to data busi- • encourage the development of big data technology and applications; ness and related direct voice or direct text messaging services. www.lexology.com/gtdt 15 © Law Business Research 2021 China Simmons & Simmons LLP

It is unclear when MIIT will approve the nationwide adoption of • grant licences to news publishing organisations under the eSIMs. An MIIT response on its official website (Q&A webpage 21 October Administrative Measures on News Publishing Licences published 2019) says MIIT is in the process of organising telecom operators to in 2016 and amended in 2017; and carry out local testing of eSIM equipment and related services. Subject • regulate the registration of news reporters under Administrative to satisfactory testing results, it will approve the broader scope of eSIM Measures on News Reporter Certifications issued in 2009. application. The CAC has the authority to regulate various forms of social media MEDIA services and information services on the internet, such as microblog- ging, online news, online forums and communities. Regulatory and institutional structure Please note that the activities of the Chinese offices and corre- 17 Summarise the regulatory framework for the media sector in spondents of foreign news agencies are regulated by the Ministry of your jurisdiction. Foreign Affairs and the State Council Information Office, under the Regulation on News Coverage by Resident Offices of Foreign News In China, the media sector is heavily regulated. The key regulators are Organisations and Foreign Correspondents issued in 2008. the National Radio and Television Administration (NRTA) and the State Administration of Press and Publication (SAPP), which were established in Ownership restrictions 2018 and replaced the original State Administration for Press, Publication, 18 Do any foreign ownership restrictions apply to media Radio, Film and Television (GAPP) and the Cyberspace Administration of services? Is the ownership or control of broadcasters China (CAC). Some functions and powers of these authorities overlap. otherwise restricted? Are there any regulations in relation The NRTA has a broad authority to regulate business involving both to the cross-ownership of media companies, including radio, traditional media and digital media. In particular, it has the authority to: television and newspapers? • approve the establishment of television and radio stations and to regulate television and radio broadcasting activities under the In China, foreign investment in the media business is prohibited. Administrative Regulation of Radio and Television issued by the Foreign investors are not allowed to invest in the following types of State Council, effective in 1997 and last amended in 2020; business in China, according to the Negative List on foreign investment • approve the establishment of cable television stations, cable published in June 2020: television programmes and to regulate the cable television broad- • news organisations (including but not limited to news agencies); casting activities under the Interim Measures for Cable Television • editing, publication or production of books, newspapers or other Management issued by State Council, effective in 1990 and last publications; amended in 2018; • editing, publication or production of audio or video products or any • regulate the creation, production, distribution and public display of other e-publications; films within the territory of China, including the approval of coopera- • construction or operation of radio or television stations or facilities tion with foreign parties, under the Film Industry Promotion Law, used for transmitting radio or television programmes; which took effect in 2017 and the Administrative Regulation of Films • radio or television video-on-demand business and construction of issued by the State Council and effective in 2002; facilities on receiving foreign television programmes by satellite • approve and regulate the downlinking of foreign satellite televi- ground receivers; sion programmes under the Administrative Regulation of Receiving • production, operation and import of radio or television programmes; Foreign TV Programs by Satellite Ground Receivers issued by the • film production or film distribution companies, cinema chains or State Council, effective in 1990 and last amended in 2018, and the import of film; and Administrative Measures of Foreign Satellite Television Channels • internet publication or provision of audio, video, news reports or issued by the NRTA and effective in 2004; other cultural products online. • regulate the Chinese presence of foreign radio and television agencies under the Administrative Provisions on the Chinese Also, under the Negative List, foreign investors are not allowed to Establishments of Foreign Radio and Television Agencies issued by acquire a controlling interest in publication printing companies. the NRTA and effective in 2004; and • regulate the information services on the internet under the Licensing requirements Administrative Regulation of Internet Information Services by the 19 What are the licensing requirements for broadcasting, State Council, effective in 2000 and amended in 2011. including the fees payable and the timescale for the necessary authorisations? The SAPP has the authority to: • regulate the business of publication, production, importation, Different licensing requirements apply in relation to each type of wholesale, resale and lease of audio and video products under the programme and the medium through which it is transmitted. Administrative Regulation of Audio and Video Products issued by the State Council, effective in 2002 and last amended in 2020; Radio and television licensing • approve the establishment of printers and to regulate the Radio and television stations may only be established by relevant printing business under the Administrative Regulation of Printing governmental departments above the county level. Permits of radio or Business issued by the State Council, effective in 2001 and last television stations are granted by the NRTA. Only the central and provin- amended in 2020; cial level television stations are allowed to transmit their programmes • approve the establishment of publishers and to regulate the via satellite. Cable television network operators are required to file with publication and distribution of domestic publications and import provincial-level branches of the NRTA. of foreign publications under the Administrative Regulation of Permits from the NRTA are also required for establishing a radio/ Publication issued by the State Council, effective in 2002, and last television programme production company. The application is open to amended in 2020; domestic legal person entities only.

16 Telecoms & Media 2021 © Law Business Research 2021 Simmons & Simmons LLP China

Satellite television licensing Advertising The installation of satellite-receiving equipment (to receive television 21 How is broadcast media advertising regulated? Is online programmes transmitted by foreign satellites) requires a permit issued advertising subject to the same regulation? by NRTA only to entities involved in education, scientific research, news, finance, economic and trade that need to receive satellite programmes The Chinese Advertisement Law (the Advertisement Law), which was for business reasons, hotels rated three-star or above and owners of last amended in 2021, is the primary legislation on advertising in China. residential or office buildings for foreigners. The following permits are It contains the principle rules for making commercial advertisements required to broadcast or make available video and audio programmes in China. These principle rules include that the content of commercial via the internet: advertisements shall: • a permit to transmit video and audio programmes through an infor- • be true and contain no false or misleading information; mation network from the NRTA; and • be healthy and fit for Chinese culture, and respect public • an internet information services licence (being a type of value- interest in China; added telecoms services operational licence) from the Ministry of • be recognisable as an advertisement; and Industry and Information Technology (MIIT). • not devalue competitors’ goods or services.

Online broadcasting licensing Under the Advertisement Law, several administrative measures are Any company that intends to provide an internet audiovisual enacted to set out detailed rules for advertising concerning pharma- programme service must obtain a licence for transmitting video and ceuticals, medical devices, food, health foods, animal remedies and audio programmes via an information network from the NRTA. A permit agricultural chemicals. must be obtained from the NRTA for video-on-demand services. The Administrative Measures for Broadcasting TV and Radio Video-on-demand programming is subject to the same content Advertisement issued by the GAPP (now NRTA and SAPP), effective in review requirements as television programming and must consist of 2010 and its supplementary provision, effective in 2012, set out specific mainly domestic programmes. rules on broadcasting television and radio advertisements. These Online broadcasting may also constitute a ‘commercial internet specific rules include: cultural activity’, which requires a permit obtained from provincial • the broadcasting of advertisements must not affect the integrity of cultural regulators. Import of foreign ‘internet cultural products’ (ie, the broadcasting of television and radio programmes; cultural products produced, spread or distributed via the internet) is • the length of the advertisements must not exceed 12 minutes subject to content review by the Ministry of Culture and Tourism. per hour except that, during peak times (being 11am to 1pm and 7pm to 9pm); Radio station licensing • the length of the advertisements must not exceed 18 minutes per Radio stations are also subject to a licensing regime administered by a each programme; bureau of the MIIT. Provincial radio management bureaux are respon- • the broadcasting of advertisements must respect public interest, for sible for licensing stations that have a broadcast range limited to instance, advertisements for pharmaceutical products or medical one province. If the broadcast range covers more than one province devices for skin diseases, haemorrhoids, urination diseases, etc, or crosses a provincial border, then the licence must be issued at the must not be broadcast during lunch or dinner time; and national level. • radio and television stations must make channels for the audience These rules and regulations are silent on the fees payable and time to report on illegal or improper advertising available. scale for licensing. Generally speaking, in practice, no fees are required for the filing of an application and the time required for processing each Moreover, the Chinese Internet Advertisement Measure (the Internet type of application varies. Ad Measure) came into effect on 1 September 2016 and covers specific issues concerning posting advertisements online. Under the Internet Ad Foreign programmes and local content requirements Measure, the following advertising activities are restricted: 20 Are there any regulations concerning the broadcasting • advertising on the internet must be recognisable and, in particular, of foreign-produced programmes? Do the rules require a paid search engine advertisement must be separate from ‘natural’ minimum amount of local content? What types of media fall search results; outside this regime? • the posting of advertisements must not interfere with the normal internet browser, including, in particular, pop-up advertisements or Foreign television programmes include films and television dramas and the like must clearly show the ‘shut-down’ button and be capable of animated programmes, and other programmes of an educational, scien- being shut down in one click; tific or cultural nature. A maximum of 25 per cent of a broadcaster’s • no advertisement is allowed to deceive users into clicking on daily airtime for films and television dramas may be allocated to foreign- a link; and produced films and television dramas. • including an advertisement in an email without permission from Foreign-produced films and television dramas may not be broad- the sender is prohibited. cast during prime time (7pm to 10pm). The permissible airtime for other foreign television programmes may not exceed 15 per cent of a station’s Additionally, the following activities are not allowed: total broadcasting time per day. • blocking, screening, covering or fast-forwarding advertising duly Locally produced programmes in foreign copyrighted models are displayed by others by using applications, devices, etc, or to provide also subject to airtime restrictions. Each satellite television channel facilities for the same; may air up to two programmes in foreign copyrighted models during • replacing others’ advertisements with their own advertisements prime time (7.30pm to 10.30pm) every year. Also, each satellite televi- via networks, devices, applications, etc; or sion channel is allowed to air only one new programme in a foreign • gaining unfair benefits or infringing others’ interest by using false copyrighted model every year, and the show shall not be aired during statistics or giving out incorrect price quotes. prime time (7.30pm to 10.30pm) during the first year. www.lexology.com/gtdt 17 © Law Business Research 2021 China Simmons & Simmons LLP

Must-carry obligations The Provisions also encourage content users to participate in the 22 Are there regulations specifying a basic package of governance of the network information ecological system and oversight programmes that must be carried by operators’ broadcasting of illegal and ill-natured information by filing complaints and reports. distribution networks? Is there a mechanism for financing the In terms of content examination or review, radio and television costs of such obligations? stations are required to conduct pre-broadcasting examinations of their contents, following the rules elaborated under the provisions of the Yes, the Interim Administrative Measures on the Operation and Services Administrative Measures of Radio and Television. Such pre-broadcasting of Cable Radio and Television, as last amended in 2021, set out the examinations are conducted and signed off by editors. New media plat- following rules: form operators are also required by the above Provisions to establish • cable radio and television operators shall publish a catalogue of mechanisms of content governance – both models of pre-publishing ‘basic channels’ distributed via their networks. The basic channels and post-publishing reviews are commonly seen in market practices shall include the programmes required by the NRTA and its local and machine reviews such as keyword filtering are widely adopted. branches. In practice, such basic channels are usually the channels of the central and relevant provincial, municipal and county-level Digital switchover television stations; and 24 When is the switchover from analogue to digital broadcasting • cable television network operators may suspend their services required or when did it occur? How will radio frequencies to certain users in case of payment overdue, but the signal trans- freed up by the switchover be reallocated? mission of CCTV Channel 1 (a major channel of China’s national television station) must not be suspended. Digital television was launched in China in 2003 and the analogue services had been switched off by the end of March 2021. There is no mechanism for financing the costs of such obligations. According to a circular issued by the Ministry of Industry and There is no regulation requiring radio or television stations Information Technology (MIIT) in March 2020, part of the 700 MHz radio to broadcast any mandatory content. However, the Administrative frequency previously occupied by analogue services would be reallo- Measures of Radio and Television stipulate what kind of content is cated to 5G networks. prohibited. Programmes produced by companies without a programme production licence are not allowed to be aired by radio or television Digital formats stations. Contents that are endangering the national unity, sovereignty 25 Does regulation restrict how broadcasters can use their or security, inciting ethnic hatred, leaking state secrets, insulting, slan- spectrum? derous, obscene, superstitious or violent are prohibited. Specific licence terms and directions from regulators will prescribe the Regulation of new media content use that may be made of the allotted spectrum. 23 Is new media content and its delivery regulated differently from traditional broadcast media? How? Media plurality 26 Is there any process for assessing or regulating media In general, China applies similar rules about content on new media and plurality (or a similar concept) in your jurisdiction? May the traditional broadcast media. However, the content examination/review authorities require companies to take any steps as a result of mechanisms are different. such an assessment? While China previously had several separate regulations governing the delivery of content on new media, the Provisions on the Governance The concept of media plurality is not directly and explicitly provided in of the Online Information Content Ecosystem (the Provisions) consoli- Chinese laws. In general, media in China are encouraged to follow main- date the previous rules into a more coherent system of comprehensive stream values and promote positive energy (meaning merits). rules for the content on the internet. The Provisions were issued by the In particular, media products and services specially designed for CAC in December 2019 and took effect on 1 March 2020. ethnic minorities are also encouraged. According to the State Council’s The Provisions apply to content producers, content service plat- Opinions for the Further Development and Prosperity of the Cultural forms and content users, and online information is categorised into Cause of the Minority Ethnic Groups that came out in 2009, the govern- three types according to the content nature: ment shall provide greater support to news media for ethnic minorities, • encouraged information: refers to information reflecting Chinese as well as radio, television and film production and broadcasting for culture, publicising the socialist theory, regime and values, ethnic minorities. responding effectively to social concerns, etc. Content producers Besides this, China’s Law on General Spoken and Written Language, are encouraged to produce and publish this information, and which came into effect in 2001, provides that dialects may be used in content service platforms are encouraged to actively display such television, films and broadcasting, subject to approval from state or information in prominent online locations such as home pages, provincial authorities of radio and television where applicable. pop-up windows, hot topic or default search lists and other key areas that can easily attract attention; Key trends and expected changes • illegal information: such as content vilifying national heroes, jeopard- 27 Provide a summary of key emerging trends and hot topics in ising national security and national honour, propagating terrorism media regulation in your country. and racialism. Content producers are prohibited from making, repli- cating and publishing any illegal information, and content service New media oversight platforms must not disseminate any illegal information; and New media, especially the emerging of live webcasting, continue to pose • ill-natured information: such as contents involving sexual innu- greater challenges to traditional broadcasting media, cinema chains, endos, violence, scandals. Content producers and content service and even e-commerce platforms. Regulators are keeping pace with new platforms are required to prevent and resist the production, repli- trends and have issued various rules to keep them under oversight, cation or publication of ill-natured information. such as the Administrative Measures on Marketing via Live Webcasting

18 Telecoms & Media 2021 © Law Business Research 2021 Simmons & Simmons LLP China

(Interim) issued by the NRTA and the CAC, jointly with other regulators internet, mobile networks and cable television networks created conflict of commerce, culture, tax, public security and market supervision. in jurisdictions among the above-mentioned authorities. For example, With the implementation of the Provisions on the Governance of the both the MIIT and the NRTA claimed to have powers to operate Internet Online Information Content Ecosystem, the government will strengthen Protocol television business and other businesses involving a converged oversight of online content, especially against content posted on social network. The conflict was preliminarily resolved in 2013 when the State media platforms. Council directed that the MIIT must focus on the regulations of the channels for content and the State Administration for Press, Publication, Radio, Integration of cable networks and convergence of cable and Film and Television (split into NRTA and SAPP in 2018) must focus on telecom networks the regulation of the content itself. CAC is also primarily responsible for Previously, cable television networks in China were operated by different the supervision of online information content, whereas it is also likely to companies in different provinces. The state had planned to integrate such become the key regulator of personal data protection under Chinese law. fragmented networks into a single national network since 2009. This task Before China’s government restructuring in March 2018, the antitrust witnessed significant progress in 2020. Nine ministries and commissions regulators in China were the Anti-monopoly Bureau under the Foreign under the State Council jointly issued the Integration and Development Investment Negative List issued by the Ministry of Commerce (MOFCOM), Plan for the National Cable Television Network early that year. This plan which is responsible for merger control, the State Administration for required that the China Broadcasting Network Corporation Ltd (CBN, a Industry and Commerce (SAIC), which is responsible for non-price- state-owned company under the NRTA), provincial cable network compa- related violations of the antitrust law, and the National Development nies and strategic investors shall establish a joint-stock company to and Reform Commission (NDRC), which is responsible for price-related achieve unified operation and management of the national cable television violation of the antitrust law. After the government restructuring in 2018, network. The joint-stock company was incorporated in September 2020. MOFCOM and NDRC survived but were released of any antitrust powers. The said Plan also required accelerated development of the CBN 5G SAIC was integrated into the State Administration for Market Regulation network. CBN, as the entity responsible for promoting convergence of (SAMR) and SAMR will act as the sole antitrust authority in China. The cable network, telecom network and the internet, obtained China’s fourth competition regulatory regime is separate from other industry regulatory 5G licence in 2019. Based on the approval from the MIIT and a framework regimes such as communications or media. agreement between CBN and China Mobile, the two state-owned giants will jointly construct and share the 5G networks with 700 MHz frequency Appeal procedure and 4.9 GHz frequency. CBN is also actively developing the application of 29 How can decisions of the regulators be challenged and on what 5G New Radio (NR) Broadcasting. bases?

Protection of personal data Generally speaking, there are two ways to appeal an administrative deci- China’s data protection legislations are in dynamic development in recent sion, either from state-level authorities or their local counterparts: one is years. The draft Personal Information Protection Law went through the an administrative review and the other is administrative litigation. second reading at the National People’s Congress in late April 2021, and In brief, an administrative review is an internal procedure under are anticipated to be finalised soon. In the meanwhile, several lower-level which a decision of a certain functional department of a government regulations and guidelines relating to personal data protection have been (provincial level or below) is reviewed by the government or by the rele- promulgated. vant functional department of a higher level. If the decision is made by a A draft rule in particularly close relation to the media sector is the local government (municipal level or below) itself, it shall be reviewed Interim Administrative Measures on Personal Information Protection of by a government of higher level. If the decision is made by a provincial Mobile Internet Applications (draft) published by the MIIT in late April government or a ministry, it shall be reviewed by the same authority that 2021. This draft rule stipulates detailed requirements for mobile App makes it. The review is designed to be an evaluation of the legality and developers, operators and distribution platforms. ‘appropriateness’ of the administrative decision. The review can cover Several Chinese regulators such as the MIIT, the CAC, the State several specified administrative acts, including the amount of a fine, revo- Administration for Market Regulation and the police, have carried out cation of a licence and suspension of business. enforcement actions against the misuse of personal data by mobile apps An administrative litigation is a judicial proceeding against the since 2019. This trend is anticipated to continue. authority that makes the administrative decision, or the authority that carries out the administrative review, where applicable. The trial focuses REGULATORY AGENCIES AND COMPETITION LAW more on legality (both from procedural and substantive aspects) but seldom covers ‘appropriateness’, as the administrative system is consid- Regulatory agencies ered to have broad discretion in making decisions. 28 Which body or bodies regulate the communications and media For some cases, an administrative review must be pursued before sectors? Is the communications regulator separate from the filing an administrative litigation and for some cases, you can either apply broadcasting or antitrust regulator? Are there mechanisms to for administrative review first and then file a lawsuit if you are unsatisfied avoid conflicting jurisdiction? Is there a specific mechanism to with the decision of administrative review, or you can file a lawsuit directly. ensure the consistent application of competition and sectoral regulation? Competition law developments 30 Describe the main competition law trends and key merger and In the Chinese regulatory regime, the Ministry of Industry and Information antitrust decisions in the communications and media sectors in Technology (MIIT) regulates the telecoms business, including basic tele- your jurisdiction over the past year. coms services and value-added telecoms services. The National Radio and Television Administration (NRTA), State Administration of Press and The Chinese Antitrust Law sits on three pillars: Publication (SAPP) and Cyberspace Administration of China (CAC) regu- • merger control; late the media businesses, including press publication, audio and video • prohibition on market abuses; and products publication and online content services. The convergence of the • prohibitions on monopolistic agreements. www.lexology.com/gtdt 19 © Law Business Research 2021 China Simmons & Simmons LLP

Currently, cases in the communications and media sectors are limited because antitrust law enforcement focuses on traditional business. However, the Chinese government has started to pay more attention to unfair competition and antitrust issues in communication and media areas. On 2 January 2020, a drafted version of the amended Antitrust Law was released by SAMR for public comments. The amendment is aimed at extending the Antitrust Law to internet businesses. It proposes factors to be considered when determining market dominance by internet operators. The proposed factors include network effects, the economy Jingyuan Shi [email protected] of scale, lock-in effect, and capability of controlling and processing data. As such, the internet sector has become, and may continue to be for Jenny Liu some period, one of the enforcement priorities in China. [email protected] The central government of China and the SAMR have made express Yuchen Lai statements since late 2020 that the authorities would strengthen [email protected] enforcement actions against monopoly conducts and prevent the disorderly expansion of capital. The SAMR issued the Guidelines for 10/F Anti-monopoly in the Platform Economy in February 2021 and has made China Construction Science and Industry Building decisions of high-profile fines to China’s tech giants such as Alibaba, 3331 Zhongxin Rd Tencent, Didi, etc, including a record-breaking 18.2 billion renminbi fine Nanshan, Shenzhen to Alibaba. 518000 The said fines are not related to these companies’ media busi- China nesses, but it is anticipated that the authorities will be stringent on Tel +86 755 8656 7720 competition law violations by online media platforms. The recent litiga- www.simmons-simmons.com tion brought by Byte Dance (operator of Douyin, the Chinese version of TikTok) against Tencent for its alleged monopoly behaviours would even bring more regulatory attention to these companies.

In 2020, central and local governments of China had promulgated a series of fiscal and tax incentives to support enterprises affected by the pandemic, some of which are relevant to communications and media: • social securities contribution is waived or reduced for companies with various scales for three to six months; • taxpayers providing ‘life services’ are exempted from value-added tax (VAT) from January 2020 to March 2021. ‘Life services’, according to a document issued by the State Taxation Administration (STA), include, among other things, cultural services (eg, literary and artistic creation, performance and competition, library and archive services, scientific and cultural activities, etc) and entertainment services; and • special incentives for the film industry, including VAT exemption for the year 2020, losses carry-forward period extended to up to eight years, exemption of the ‘cultural undertakings construction fee’ for the year of 2020.

The local governments of Beijing, Shanghai, Guangdong, Jiangsu, Zhejiang and Hunan had also issued relief policies to support relevant companies, such as rent reduction, subsidies, favourable loans, free training, etc. The covid-19 pandemic had been brought under control in China since the second half of 2020 and most of the said incentives have expired at the time of writing. However, film-industry companies are recommended to mind the extended losses carry forward period for tax purpose.

20 Telecoms & Media 2021 © Law Business Research 2021 Egypt

Mohamed Hashish and Farida Rezk Soliman, Hashish & Partners

COMMUNICATIONS POLICY The National Telecommunication Regulatory Authority (NTRA) is mainly empowered by the Telecoms Law to regulate and enhance telecommu- Regulatory and institutional structure nication services in Egypt. In addition to the NTRA, other key entities are 1 Summarise the regulatory framework for the communications involved in the telecom sector: sector. Do any foreign ownership restrictions apply to • MoCIT is empowered by the Presidential Decree No. 379/1999 to, communications services? inter alia, expand, regularly develop and improve communication and information services as well as encourage investment in the Egypt is one of the three largest economies in Africa and is strategi- telecoms sector based on the antitrust basis; cally positioned at a crossroads between the East and West, making • the Information Technology Development Agency (ITDA) is empow- the country a significant player in international trade in the Middle ered by the E-signature Law to, inter alia, promote and develop East and Africa. Egypt is home to the Suez Canal, which connects the the information technology and communication industry, support Mediterranean Sea with the Red Sea and is a key artery in global trade. small and medium-sized enterprises in using e-transaction and The total area of Egypt is 1,001,450 square kilometres, including regulating e-signature services activities; and 995,450 square kilometres of land and 6,000 square kilometres of water. • the Economic Court has executive jurisdiction over settling litiga- According to the Egyptian Central Agency for Public Mobilisation and tion related to the Telecoms Law. Statistics, the population reached more than 100 million people in 2020. Egypt is divided into 27 governorates, 217 cities and 4,617 villages. The Authorisation/licensing regime governorates with the highest population are Cairo (10.8 per cent), Giza 2 Describe the authorisation or licensing regime. (8.6 per cent) and Sharqiyya (7.4 per cent). The Egyptian government has been working hard to attract more Under the Telecoms Law, no one is allowed to establish or operate any foreign direct investment (FDI) to the country, and these efforts resulted telecom network, provide any telecom service to third parties, transmit in recognition of Egypt as one of the top five destinations globally for international calls or announce doing so unless a licence is obtained greenfield FDI in 2016. Also, in 2016, Cairo was named as one of the top by the NTRA. 10 cities in the world to found a tech start-up. The term ‘telecom’ is defined by the Telecoms Law as ‘any means of According to the fDi Report 2020 issued by fDi Intelligence: sending or receiving signs, signals, messages, texts, images or sounds of whatsoever nature and whether the communication is wired or Egypt replaced South Africa as the second-ranked destination by wireless’. projects in the region, experiencing a 60 per cent increase from The restriction above does distinguish between the different types 85 to 136 projects. of telecom services and includes one exception only for establishing or operating a private network that does not any use a wireless system. This ranking covers both the Middle East and African. Software and IT In practice, telecom services are generally classified as follows: services are the top project sectors. Further, Egypt also managed to top all ranked countries in the Main service Sub-service Middle East and African for capital investment in 2019 by acquiring 12 Fixed telephony per cent capital investment with a total value of US$13.7 billion. Fixed services Virtual fixed telephony The telecom sector in Egypt is mainly governed by Telecoms Law No. Access 10/2003. Also, there are several other key laws and regulations related International gateway to the telecom sector, including the following (as amended to date): International services International submarine cable • Penal Code No. 58/1937; • Presidential Decree No. 236/1985 approving the International Class A Telegraph (currently Telecommunication) (ITU) Convention, which Class B ITU Convention entered into force in Egypt as of 10 October 1985; Data services Class C • Presidential Decree No. 379/1999 regulating the Egyptian Ministry Global peering of Communication and Information Technology (MoCIT); Registrar • E-signature Law No. 15/2004 and its Executive Regulation; • Economic Court Law No. 120/2008; • Cybercrime Law No. 175/2018; and • Personal Data Protection Law No. 151/2020.

www.lexology.com/gtdt 21 © Law Business Research 2021 Egypt Soliman, Hashish & Partners

Main service Sub-service Service Applicable fees and security Mobile services • No one-time licensing fee; • 3% of the total annual revenues; Bulk SMS (one to many) Class B • a licence burden annual fee of 10,000 Egyptian pounds VAS plus the inflation rate declared by CBE; and Cellular Wireless trunk • a performance bond of 150,000 Egyptian pounds. Nilesat • No one-time licensing fee; • 3% of the total annual revenues; VSAT Global • a licence burden annual fee of 10,000 Egyptian pounds peering GMPCS plus the inflation rate declared by CBE; and Satellite services Navigation services (aviation/maritime) • a performance bond of 200,000 Egyptian pounds. Infrastructure • A one-time licensing fee of 500,000 Egyptian pounds; Infrastructure leasing • 3% of the total annual revenues; Towers • a licence burden annual fee of 1,000 Egyptian pounds plus Bulk SMS AVL the inflation rate declared by CBE; (one to many) • annual charges for the equipment of the licensee’s Accounting authorities subscribers; and Wireless institutes • a performance bond of 500,000 Egyptian pounds. • An upfront royalty fee of 3 million Egyptian pounds; The licence of each telecom service allows the relevant licensees to • 3% of the total annual revenues; provide such service within a very specific scope. VAS • a licence renewal fee of 1 million Egyptian pounds; • a licences and liability fee of 20,000 Egyptian pounds; and Generally, all licences are granted under a licence agreement with • a cash deposit guarantee of 500,000 Egyptian pounds. the NTRA noting that all licences for major services (eg, fixed telephony • No one-time licensing fee; and cellular) are granted by the NTRA through a bidding process. • 3% of the total annual revenues; However, the other licences may be granted by the NTRA upon request. • frequency charges to be determined on a case by case This request is required to be assessed from a different perspective VSAT basis; including, inter alia, the market demand and the financial and technical • a licence burden annual fee of 1,000 Egyptian pounds plus adequacy of the applicant. the inflation rate declared by CBE; and • a performance bond of 100,000 Egyptian pounds. Licences are granted for a period between one and 15 years, depending on the services that are the subject of such licences. The NTRA applies a different fee structure for issuing licences for Flexibility in spectrum use each type of service as per the following examples: 3 Do spectrum licences generally specify the permitted use or is permitted use (fully or partly) unrestricted? Is licensed Service Applicable fees and security spectrum tradable or assignable? • A one-time licensing fee of 50,000 Egyptian pounds; • 3% of the total annual revenues; Wireless All spectrum licences generally specify the permitted use and are not • a licence burden annual fee of 10,000 Egyptian pounds infrastructure tradable or assignable, fully or partly, under the Telecom Law unless plus the inflation rate declared by the Central Bank of leasing Egypt (CBE); and prior approval is obtained from the NTRA. Also, all licence agreements • a performance bond of 500,000 Egyptian pounds. include a change of control restriction, so that the licensee may not even • A one-time licensing fee of 50,000 Egyptian pounds; merge with any third party unless prior written approval is obtained • 3% of the total annual revenues; from the NTRA. Registrar • a licence burden annual fee of 10,000 Egyptian pounds plus the inflation rate declared by CBE; and Ex-ante regulatory obligations • a performance bond of 20,000 Egyptian pounds. 4 Which communications markets and segments are subject to • No one-time licensing fee; ex-ante regulation? What remedies may be imposed? • 3% of the total annual revenues; • a licence burden annual fee of 1,000 Egyptian pounds plus GMPCS the inflation rate declared by CBE; All licences are required, under the Telecoms Law, to include several • annual charges for the equipment of the licensee’s ex-ante provisions concerning transparency, price control, cost subscribers; and accounting, accounting separation, access to and use of specific network • a performance bond of 150,000 Egyptian pounds. facilities and non-discrimination. • A one-time licensing fee of 1 million Egyptian pounds; For example, the NTRA has the right to review any audited finan- • 8% of the total annual revenues; cial statement including, inter alia, appointing an auditor other than • a licence burden annual fee of 500,000 Egyptian pounds the licensee’s auditor to review the said financial statement. Further, Access plus the inflation rate declared by CBE; • annual charges for the equipment of the licensee’s each licensee is required to obtain an approval from the NTRA before subscribers; and applying tariffs or changing them. • a performance bond of 50 million Egyptian pounds. • No one-time licensing fee; Structural or functional separation • 3% of the total annual revenues; 5 Is there a legal basis for requiring structural or functional Class A • a licence burden annual fee of 10,000 Egyptian pounds separation between an operator’s network and service plus the inflation rate declared by CBE; and activities? Has structural or functional separation been • a performance bond of 500,000 Egyptian pounds. introduced or is it being contemplated?

According to the Telecoms Law, all licensed operators are required to not support one service in favour of another service. All all licensed operators are required to comply with the ITU’s recommendations and

22 Telecoms & Media 2021 © Law Business Research 2021 Soliman, Hashish & Partners Egypt international standards. That being said, if, for any reason, a structural Net neutrality or functional separation is required as per the NTRA’s instructions, the 9 Are there limits on an internet service provider’s freedom to ITU’s recommendation or international standards, then the relevant control or prioritise the type or source of data that it delivers? operator should comply with this requirement. Are there any other specific regulations or guidelines on net The first time the NTRA introduced structural or functional separa- neutrality? tion was for Telecom Egypt to ensure its non-discriminatory behaviour. The provision of telecom services in Egypt must always be based on Universal service obligations and financing transparency; therefore, internet services providers may not control or 6 Outline any universal service obligations. How is provision of prioritise the type or source of data they deliver. these services financed? The Administrative Courts rendered a judgment ordering the NTRA to block pornographic content; however, the NTRA challenged this judg- According to the Telecoms Law, the provision of any telecom service ment on the basis that the Telecoms Law does not grant this power must be based on four principles, one of which is the availability of the to the NTRA. universal service. However, the Cybercrime Law of 2018 allows the competent The NTRA is required by the Telecoms Law to transfer its budget’s authorities in Egypt to block any website that is broadcast from Egypt surplus, except for the amount allocated to the state by the Cabinet or abroad if that website contains any statements, digits, images, of Ministers, to the Universal Service Fund on an annual basis. Any videos or any other advertising material that is deemed a crime under amounts to be transferred to the Universal Service Fund must be the Cybercrime Law. This blockage is subject to judicial review within utilised on, inter alia, infrastructure projects required for the universal 24 hours. service, reallocation for the spectrum, indemnifying telecom services operators and providers for the price difference between the approved Platform regulation economical price for the services and that which may be determined in 10 Is there specific legislation or regulation in place, and have favour of the telecom consumers. there been any enforcement initiatives relating to digital platforms? Number allocation and portability 7 Describe the number allocation scheme and number Digital platforms are mainly regulated by the following: portability regime in your jurisdiction. • the Telecoms Law; • Law No. 180/2018 regarding press, media and the Supreme Council There is a specific number allocation plan adopted by the NTRA, which is of Media (SCoM) Regulation (the Media Law) and its Executive updated from time to time depending on the increase of telecom service Regulation; and subscribers in Egypt, whereby each operator has a dedicated first • the SCoM Decree No. 26/2020, issuing the SCoM Licensing two-to-three digits. There are also dedicated numbers for emergency Regulation (the Media Licensing Regulation). services (eg, ambulance, police and fire brigade). There is also a mobile number portability regulation adopted by the Digital platforms may not be created unless a licence is obtained from NTRA whereby mobile subscribers may freely shift between operators the SCoM and that licence also requires an approval from the NTRA. without losing their numbers. This regulation includes several manda- According to the Media Licensing Regulation, companies carrying tory terms and conditions applied to both operators and subscribers. out any business activity related to creating digital or satellite platforms must be owned by the state with a minimum authorised capital of 50 Customer terms and conditions million Egyptian pounds. 8 Are customer terms and conditions in the communications sector subject to specific rules? Next-Generation-Access (NGA) networks 11 Are there specific regulatory obligations applicable to Yes, all telecom services providers are required to have written NGA networks? Is there a government financial scheme to contracts with their customers in Egypt. These written contracts are promote basic broadband or NGA broadband penetration? required to follow the form approved by the NTRA and cover, inter alia: • the type of services that are subject to the customer agreement; There is no specific well-developed regulation yet applicable to NGA • the confidentiality requirement for the customers’ data and networks. However, our law firm obtained the first-ever authorisation communications; from the NTRA for using a wide area network or Multiprotocol Label • the terms of payment including interest, administrative fees, tax Switching in Egypt. and any other burdens; The main general regulatory requirement that is currently adopted • the duration and its renewal; by the NTRA is to have NGA networks implemented by a licensed • rights in case of default or termination; and provider of Class A services. • the agreement is personal and may not be assigned to any third party without the approval of the licensed telecoms provider. Data protection 12 Is there a specific data protection regime applicable to the Any violation of the requirements above will result in a penalty from the communications sector? NTRA as per the Penalties Regulation. For example, in 2016, the NTRA imposed a penalty of 250,000 Egyptian pounds to Etisalat Misr for not There are two main laws in Egypt governing the use, collection, storage, complying with this mandatory requirement. transfer and protection of personal data in Egypt as follows.

Data Protection Law No. 151 of 2020 (the Data Protection Law) The Data Protection Law applies to any personal data that is subject to any electronic processing whether partially or entirely. www.lexology.com/gtdt 23 © Law Business Research 2021 Egypt Soliman, Hashish & Partners

The Personal Data Law shall not apply to any personal data Supervisory Authority, to have all advertising, data, information, docu- that is being: ments, invoices, receipts, contracts including e-documents with the • saved by natural persons for third parties and that is processed for consumer to be in Arabic or a bilingual or multilineage form, providing personal usage only; that the Arabic language must be one of these languages. • processed for official statistics purposes or in the application of laws or regulations in Egypt; Key trends and expected changes • exclusively processed for media purposes and provided that the 16 Summarise the key emerging trends and hot topics in said personal data is correct and accurate and not to be used for communications regulation in your jurisdiction. any other purposes without prejudice to any applicable press and media regulations in Egypt; No one can deny the rapid international transmission into the fintech • related to judicial seizure record, investigations and lawsuits; space. The banking sector in Egypt, being a country that witnessed two • held by the National Security Authorities; and revolutions in 2011 and 2013, was affected by such rapid transmission • held by the CBE and the entities that are subject to its control as well. This was more than enough for the Egyptian government, upon and supervision except for money transfer and forex companies a request by the CBE, to propose a new entire draft for the Banking provided that they take into account the rules established by the Law. This new Banking Law was prepared based on, inter alia, advice CBE regulating personal data. rendered by international consultancy firms, a comparative study for other countries’ laws, international standards, Basel Framework, It is worth noting that any entity that is subject to the Data Protection recommendations of the Organisation for Economic Co-operation and Law is required to legitimise its position with the provisions of the said Development, the World Bank Group and the International Monetary Data Protection Law within a year starting from the issuance date of its Fund as well as the recommendations made by the banks that are regis- Executive Regulation, which has not yet been issued. tered with the CBE. Under the new Banking Law, no one is now allowed to carry out any Anti-Cybercrimes Law No. 175 of 2018 (the Anti-Cybercrimes Law) activity of operating a payment system or providing a payment system According to Article No. 2 of the Anti-Cybercrimes Law, any person, unless a prior licence is obtained by the CBE. This new restriction is whether a natural or legal person, that uses, collects, or processes applied to all persons, whether natural or juristic persons, carrying out personal data whether a natural or legal person shall maintain the such activity inside Egypt or providing such services abroad to any resi- privacy of the data stored and not disclose same without an order of a dents in Egypt except for stock exchanges, futures exchanges, securities relevant judicial authority. settlement systems, licensed central clearing, depository and registry Further, any IT services provider shall retain and store users’ data systems, custodian banks, and internal systems of the Egyptian Ministry for at least 180 days continuously including identification, the content of of Finance that do not include payment, collection, set-off or clearance services’ system, communication traffic, terminals and any other data of payment. required by the NTRA. In addition to the Data Protection Law and the Anti-Cybercrimes MEDIA Law, few other laws deal with special nature personal data such as the Telecom Law, whereby telecom services providers are required to Regulatory and institutional structure ensure and maintain the confidentiality of any customer’s data. 17 Summarise the regulatory framework for the media sector in your jurisdiction. Cybersecurity 13 Is there specific legislation or regulation in place concerning The media sector is governed by various laws and regulations, including cybersecurity or network security in your jurisdiction? the following: • Investment Law No. 72/2017 and its Executive Regulation; Yes, the Cybercrime Law concerns any person providing, directly or • the Media Law; indirectly, users with any information technology and telecom service • Prime Minister Decree No. 411/2000 establishing the Media Public including, inter alia, processing or data storage. These providers are Free Zone (MPFZ); and required to retain and store users’ data continuously for at least 180 days, • the Media Licensing Regulation. including identification, the content of the services’ system, communication traffic, terminals and any other data required by the NTRA. Most of the key media projects in Egypt operate inside the MPFZ, which is a public free zone governed by regulated by various directives of the Big data Chairman of the General Authority for Investment (GAFI). 14 Is there specific legislation or regulation in place, and have All projects operating under the Investment Law are qualified by a there been any enforcement initiatives in your jurisdiction, large number of investment incentives. addressing the legal challenges raised by big data? For any media project to be qualified for operation inside MPFZ, this project must, in general, take a specific legal form and must comply Unfortunately, there is no special regulation yet for big data. However, it with the Arab Media Ethical Charter and MPFZ’s Business Controls and is within the NTRA’s ongoing strategy to regulate it. Principles. The services generally allowed to operate inside the MPFZ include, Data localisation inter alia, radio, television, information broadcasting, e-content produc- 15 Are there any laws or regulations that require data to be tion and marketing. The MPFZ may also authorise hotels, banks, and stored locally in the jurisdiction? malls to operate inside the MPFZ to provide their services to the licensed media projects. Consumer Protection Law No. 181/2018 and its Executive Regulation According to the Media Law and the Media Licensing Regulation, require all providers of services and products in Egypt, except for the which was published on 13 May 2020, the Supreme Council of Media entities that are subject to the supervision of the CBE and the Egyptian (SCoM) is empowered, inter alia, to:

24 Telecoms & Media 2021 © Law Business Research 2021 Soliman, Hashish & Partners Egypt

• receive notification for establishing Egyptian newspapers or non- • incorporation of a company in a form of sole person company, Egyptian newspapers that are issued or distributed in Egypt; limited liability company or joint-stock company with a minimum • grant licences to visual, audio or digital channels that either regis- authorised capital of 50 million Egyptian pounds; tered in Egypt with GAFI or non-Egyptian channels that are being broadcast from Egypt; If the licence request is accepted, it should be valid for five years, • determine and apply the rules and requirements protecting the renewable upon a request at least six months before the end of the said audience in Egypt; five years. • grant licences to broadcast relay stations, websites, digital and satel- All content must, inter alia: lite platforms, fibre satellite distribution and content distribution; • comply with the Egyptian Constitution, applicable laws, regulations • authorise the importation of satellite and internet broadcasting and professional codes and ethics; and devices; and • be stored for at least one year and hosted by a server that is • authorise the importation of non-Egyptian prints. located at a secure location in Egypt, which location may not be changed without prior approval from the SCoM. Ownership restrictions 18 Do any foreign ownership restrictions apply to media Advertising services? Is the ownership or control of broadcasters 21 How is broadcast media advertising regulated? Is online otherwise restricted? Are there any regulations in relation advertising subject to the same regulation? to the cross-ownership of media companies, including radio, television and newspapers? The Media Law and the Media Licensing Regulation, which was published on 13 May 2020, differentiate between Egyptian and non-Egyptian media According to the Media Law and the Media Licensing Regulation, which advertising companies as follows: was published on 13 May 2020, foreign ownership restrictions apply For Egyptian media advertising companies: to holding the majority stake or any stake giving the right to manage • a licence is required from the SCoM; any Egyptian satellite or terrestrial television, as well as any Egyptian • non-Egyptians may not hold any majority stake or any other stake digital, wired or wireless station. However, non-Egyptian satellite and that allows them to manage the company; terrestrial television as well as non-Egyptian digital, wired and wireless • incorporation of a company in a form of sole person company, stations may be licensed to operate in Egypt providing an approval is limited liability company or joint-stock company with a minimum obtained from the SCoM. This approval requires, inter alia, operating authorised capital of 100,000 Egyptian pounds for holding websites, inside a specific media area, the ability to block any content involving, 5 million Egyptian pounds for general or news television stations, inter alia, violence, suicide, self-harm or nudity. 2 million Egyptian pounds for specialised television stations, 15 million Egyptian pounds for each broadcasting station and 2.5 Licensing requirements million Egyptian pounds for each electronic, television station or 19 What are the licensing requirements for broadcasting, channel; and including the fees payable and the timescale for the • shareholders must subscribe to at least 35 per cent of the compa- necessary authorisations? ny’s capital.

According to the Media Law and the Media Licensing Regulation, which For non-Egyptian media advertising companies: was published on 13 May 2020, a licence from the SCoM is required for • an approval is required from the SCoM; any company to be in a position to operate a broadcast relay station in • this approval requires, inter alia, operating inside a specific media or to Egypt. This licence requires the following: area, the availability of blocking any content involving, inter alia, • payment of 250,000 Egyptian pounds to the SCoM; violence, suicide, self-harm or nudity; and • obtaining an approval from the NTRA; and • payment of the licensing fee as per the following table. • incorporation of a company in a form of a sole person company, limited liability company or joint-stock company with a minimum Fee authorised capital of 5 million Egyptian pounds. (Egyptian Type of media pounds)

If the licence request is accepted, it should be valid for five years, 1 million General and news media renewable upon a request at least six months before the end of the said 500,000 Specialised media five years. 100,000 general website • social networking or promoting individual’s websites Foreign programmes and local content requirements 3 million • audio, video and text service on demand websites; and 20 Are there any regulations concerning the broadcasting • goods, products and services marketing websites. of foreign-produced programmes? Do the rules require a 100,000 Any other website minimum amount of local content? What types of media fall outside this regime?

According to the Media Law and the Media Licensing Regulation, which was published on 13 May 2020, a licence from the SCoM is required for any company to be in a position to operate and distribute recorded or live content in Egypt, whether through satellite or the internet. This licence requires the following: • payment of 500,000 Egyptian pounds to the SCoM for the company and 50,000 Egyptian pounds for each website; and www.lexology.com/gtdt 25 © Law Business Research 2021 Egypt Soliman, Hashish & Partners

Must-carry obligations 22 Are there regulations specifying a basic package of programmes that must be carried by operators’ broadcasting distribution networks? Is there a mechanism for financing the costs of such obligations?

The Media Law and the Media Licensing Regulation, which was published on 13 May 2020, do not yet specify any must-carry obligations or a mechanism for financing the cost of such obligation. Mohamed Hashish [email protected] Regulation of new media content Farida Rezk 23 Is new media content and its delivery regulated differently [email protected] from traditional broadcast media? How? Degla Plaza Building (75/77) New media contents are subject to the same regulation as advertising. 199 St. Degla Digital switchover New Maadi 24 When is the switchover from analogue to digital broadcasting Cairo required or when did it occur? How will radio frequencies Egypt freed up by the switchover be reallocated? Tel: +202 2516 2131 www.shandpartners.com The digital switchover started in Egypt in 2013. The National Telecommunication Regulatory Authority is empowered under the Telecoms Law to reallocate and manage radio frequencies. The Media Law also grants the Supreme Council of Media (SCoM) Digital formats the power to guarantee freedom of competition and to prevent domi- 25 Does regulation restrict how broadcasters can use their nance practices within the media sector. This is similar to the provisions spectrum? included in the Telecoms Law and, given that the Media Law was just issued, we are not sure if there will be a dispute between the CPA and No. the SCoM as there has been between the CPA and the NTRA. However, in all cases, the Egyptian administrative litigation courts Media plurality have the jurisdiction to order which authority is the competent one. 26 Is there any process for assessing or regulating media plurality (or a similar concept) in your jurisdiction? May the Appeal procedure authorities require companies to take any steps as a result of 29 How can decisions of the regulators be challenged and on such an assessment? what bases?

The Media Law and the Media Licensing Regulation, which was published All decisions of the regulator are subject to the review of the administra- on 13 May 2020, do not yet specify any process of media plurality in Egypt. tive litigation courts if these decisions are not in line with the applicable laws or reasonable. The administrative litigation courts have the juris- Key trends and expected changes diction to assess the validity or legality of each decision. 27 Provide a summary of key emerging trends and hot topics in Further, in case of a dispute between the NTRA and any licence, media regulation in your country. the licensee may resort to arbitration under most of the telecom licence agreements. The Media Licensing Regulation entered into force in Egypt on 14 May 2020. It does not yet involve any practice in Egypt and includes several Competition law developments provisions that need clarification on how they will be applied in reality. 30 Describe the main competition law trends and key merger and antitrust decisions in the communications and media REGULATORY AGENCIES AND COMPETITION LAW sectors in your jurisdiction over the past year.

Regulatory agencies The most famous dispute within the telecom sector was between 28 Which body or bodies regulate the communications and Vodafone International, being the major shareholder holding 55 per cent media sectors? Is the communications regulator separate of Vodafone Egypt’s share capital, and Telecom Egypt, being a compet- from the broadcasting or antitrust regulator? Are there itor to Vodafone Egypt and a shareholder holding 45 per cent of the mechanisms to avoid conflicting jurisdiction? Is there a same company. specific mechanism to ensure the consistent application of Vodafone International signed a formal memorandum of under- competition and sectoral regulation? standing for selling its shares in Vodafone Egypt to the Saudi operator STC in January 2020. However, Telecom Egypt claimed that it has the According to Antitrust Law No. 3/2005, the Egyptian Competition right of first refusal over the shares that are subject to this contem- Protection Authority (CPA) is the competent regulator for antitrust. plated sale, whose claim was officially raised to both the ECA and the However, there has been a dispute between the CPA and the National NTRA based on several antitrust concerns. However, this transaction Telecommunication Regulatory Authority (NTRA) regarding jurisdiction was not completed and Vodafone announced that it will remain holding over any antitrust issue related to the telecoms sector. its shares in Vodafone Egypt.

26 Telecoms & Media 2021 © Law Business Research 2021 Soliman, Hashish & Partners Egypt

After the suspension of schools and universities as a precautionary measure amid the coronavirus crisis, the Minister of Communications and Information Technology agreed with telecom providers Etisalat, Orange, Telecom Egypt and Vodafone to provide free access to websites of the Ministry of Education that provide the necessary educational content to complete the education process remotely while removing the additional financial burden on families. Moreover, the state bore the cost of a 20 per cent increase in the monthly download capacities for home internet use to support distanced learning. Further, Telecom Egypt created hotlines in collaboration with the Ministry of Health regarding coronavirus health concerns. Additionally, the Wasel mobile application was launched to address coronavirus questions from the deaf and individuals with impaired hearing. To maintain peace and security, in March 2020, the Egyptian Prime Minister ordered legal action against anyone spreading false information regarding the coronavirus outbreak that disturbs public peace or harms the public. On 22 March 2020, the Ministry of Interior publicised that a woman in Damietta was detained for posting a video on her Facebook account spreading false rumours about the covid-19 outbreak.

www.lexology.com/gtdt 27 © Law Business Research 2021 European Union

Anne Baudequin, Christopher Götz and Martin Gramsch Simmons & Simmons LLP

COMMUNICATIONS POLICY for Support for BEREC (BEREC Office), amending Regulation (EU) 2015/2120 and repealing Regulation (EC) 1211/2009; and Regulatory and institutional structure • the Directive (EU) 2018/1972 establishing the European Electronic 1 Summarise the regulatory framework for the communications Communications Code (the EECC Directive). sector. Do any foreign ownership restrictions apply to communications services? The EECC Directive introduced several changes, inter alia, new measures to: Background • increase competition and predictability for investments; In the European Union, the progressive yet quick liberalisation of elec- • reduce regulation for co-investment of rival operators in very high- tronic communications services paved the way for the creation of a capacity networks; single electronic communications market. The liberalisation process, • improve coordination and use of spectrum across the European Union; which began in the 1980s, finally led to a full opening of the electronic • strengthen consumer protection; and communications sector on 1 January 1998. Since then, the never-ending • create a safer online environment. evolution of the electronic communications market, reshaped notably by the convergence of the electronic communications, broadcasting and IT The EECC Directive had to be transposed into national law by 21 sectors, has required several reforms of the EU electronic communica- December 2020, except for article 53 ‘on coordinated timing of assign- tions framework. The new EU electronic communications frameworks ments for access to radio spectrum’, which applies as of 20 December generally come in packages of directives. The first Telecom Package 2018 (articles 124 and 126 of the EECC Directive). The Directive repealed, was adopted in 2002. It was later amended in 2009 and 2015. from 21 December 2020, the four main directives of the pre-existent Telecom Package, namely: Electronic communications regulatory framework • Directive 2002/21/EC (Framework Directive), as amended by The current EU electronic communications framework includes the Directive 2009/140 (Better Regulation Directive); following texts: • Directive 2002/20/EC (Authorisation Directive), as amended by the • Directive 2002/58/EC (Directive on Privacy and Electronic Better Regulation Directive; Communications), as amended by Directive 2009/136/EC (Citizens’ • Directive 2002/19/EC (Access Directive), as amended by the Better Rights Directive), which, inter alia, deals with the processing of Regulation Directive; and personal data in the context of the provision of electronic communi- • Directive 2002/22/EC (Universal Service), as amended by the cations services and contains provisions in relation to the security Citizens’ Rights Directive. of networks and services and notification of breaches of security; • Decision No. 676/2002/EC (Radio Spectrum Decision), which Overhaul of the electronic communications regulatory framework establishes the European policy for radio spectrum with the aim of Considering the rapid digitalisation of the world market and the oppor- ensuring coordination between EU member states and harmonisa- tunities it entails, the European Commission (the Commission) identified tion conditions for the efficient use of radio spectrum; the completion of the Digital Single Market as one of the Commission’s • Regulation (EU) No. 717/2007 on roaming on public mobile tele- 10 political priorities. phone networks, as amended by Regulation (EC) No. 544/2009 and The Digital Single Market is defined by the Commission as a Regulation (EU) No. 531/2012; market in which: • Regulation (EU) 2015/2120, laying down measures concerning open internet access and amending Directive 2002/22/EC on the free movement of goods, persons, services and capital is universal service and users’ rights relating to electronic communi- ensured and where individuals and businesses can seamlessly cations networks and services and Regulation (EU) No. 531/2012 access and exercise online activities under conditions of fair on roaming on public mobile communications networks within the competition, and a high level of consumer and personal data EU, amended by Regulation (EU) 2017/920; protection, irrespective of their nationality or place of residence. • Directive 2014/61/EU on measures to reduce the cost of deploying high-speed electronic communications networks; The goal of the Commission is to help generate €415 billion per year • Regulation (EU) 2017/1953, amending Regulations (EU) No. and create 3.8 million jobs by knocking down regulatory barriers in the 1316/2013 and Regulation (EU) No. 283/2014, regarding the digital space and transforming 28 separate digital markets across the promotion of internet connectivity in local communities (Wifi4EU); European Union into a single one. • Regulation (EU) 2018/1971 establishing the Body of European The Digital Single Market Strategy, which was launched in May Regulators for Electronic Communications (BEREC) and the Agency 2015, was built on three pillars:

28 Telecoms & Media 2021 © Law Business Research 2021 Simmons & Simmons LLP European Union

• better access for consumers and businesses to digital goods and Foreign ownership services across the EU; The EU electronic communications framework does not contain provi- • creating the right conditions and a level playing field for digital sions imposing foreign ownership restrictions for the provision of networks and innovative services to flourish; and electronic communications services. • maximising the growth potential of the digital economy. Authorisation/licensing regime The EECC Directive is part of the wider connectivity package proposed 2 Describe the authorisation or licensing regime. by the Commission in September 2016. It aims at enabling the full participation of EU citizens and businesses in the digital economy. This Under EU law, the freedom to provide services is guaranteed under initiative plans to achieve the following milestones by 2025: article 56 of the Treaty on the Functioning of the European Union • gigabit connectivity for major economic drivers such as schools, (TFEU), according to which: medium-sized and large enterprises and main providers of public services; restrictions on freedom to provide services within the Union shall • upgradeable connectivity of at least 100Mb per second for all be prohibited in respect of nationals of member states who are European households; and established in an member state other than that of the person for • 5G coverage for all urban areas and all major terrestrial trans- whom the services are intended. port paths. This principle is reflected in article 12(1) of the EECC Directive according To take into account the recent developments in the communications to which EU member states shall: sector such as the increased use by end users of services based on Voice over Internet Protocol (VoIP), messaging services or web- ensure the freedom to provide electronic communications based email services in place of traditional voice and short message networks and services, subject to the conditions set out in the services, the EECC Directive sets out a new definition of the term ‘elec- Directive. tronic communications service’. Three types of service categories are introduced: For this purpose, the EECC Directive is based on a ‘general authorisa- • internet access services; tion’ regime. Under this authorisation regime, the provision of electronic • interpersonal communications service (allows direct communica- communications networks or services can only be subject to a ‘general tions over an electronic communications network between finite authorisation’ (ie, the operator may be required to submit a prior noti- numbers of people either based, or not, on a number); and fication of its activity to the NRA but cannot be required to obtain an • services consisting wholly or mainly of the conveyance of signals explicit decision or any other administrative act). As an exception to (eg, for machine-to-machine communications or for broadcasting). the ‘general authorisation’ regime, EU member states can grant, upon request, individual licences for the use of scarce resources like frequen- Most provisions apply indifferently to all electronic communications cies, numbers and rights of way. services except number-independent interpersonal communications The list of information required as part of the notification proce- services. dure to the NRAs has been harmonised by the EECC Directive to avoid excessive administrative costs for operators. Institutions In December 2019, under article 12 of the EECC, to approximate The Commission is the main institution responsible for the enforce- notification requirements and to harmonise accordingly the notification ment of the electronic communications policy and regulation. Two forms currently in use at the national level, BEREC published guide- Directorates-General are mainly involved in the electronic communica- lines for the notification template. These guidelines define a template tions policy: of the notification form to be filled up at the beginning of the activities • the Directorate-General for Communications Network, Content and by electronic communications network (ECN) or electronic communica- Technology (DG Connect) headed by Thierry Breton; and tions service (ECS) providers. A set of minimum operator’s rights are • the Directorate-General for Competition (DG Comp) headed by attached to the ‘general authorisation’. Thanks to the ‘general authorisa- Olivier Guersent. tion’, an operator has notably the rights to: • operate electronic communications networks and provide elec- BEREC also plays a key role in the development and better functioning tronic communications services; of the internal market for electronic communications. On 7 March • apply for rights of way; 2020, BEREC published guidelines for intra-EU communications. These • negotiate interconnection with and where applicable obtain access guidelines clarified the provisions for regulating intra-EU communica- to or interconnection from other operators; tions services to ensure a common regulatory approach and assist EU • be allowed being designated to provide different elements of a member states in their consistent implementation. These Guidelines are universal service; and complementary to the provisions set out in the Regulation and are not • have access to scarce resources (radio spectrum and numbering presented as an official legal interpretation of those provisions. resources) (article 15 of the EECC Directive). The Independent Regulators Group as well as each EU member state’s national regulating authority (NRA) are also influential actors. The EECC Directive also provides for an exhaustive list of conditions that Finally, decisions of national courts and tribunals and the European an EU member state may attach to the general authorisation such as: Court of Justice also significantly contribute to the interpretation of the • fees for the rights of use; electronic communications framework. • administrative charges; The EECC Directive enhanced the role of BEREC and reinforced the • interoperability and interconnection; role of NRAs, both at the national and EU level, to increase consistency • accessibility by end users of numbers from the national and predictability of application of the rules in the context of the Digital numbering plan; or Single Market. • ‘must carry’ obligations (article 13 of the EECC Directive). www.lexology.com/gtdt 29 © Law Business Research 2021 European Union Simmons & Simmons LLP

EU law does not provide for a limit of the duration of the ‘general Principles must be taken into account by EU member states where authorisations’. However, when individual rights of use of scarce it intends to limit the number of rights of use to be granted for radio resources are granted for a limited period, the duration shall be appro- frequencies (article 45 of the EECC Directive). priate for the service concerned. Also, the EECC Directive introduced further harmonisation meas- The EU member states can allow the relevant NRA to impose ures for spectrum including promoting shared use of spectrum and fees for the rights of use for radio spectrum, numbers, as well as coordinating spectrum assignments. The consistency of the spectrum rights to install facilities. These fees have to be objectively justified, assignment process will be safeguarded through a process involving transparent, non-discriminatory and proportionate concerning their BEREC scrutiny of NRA’s planned spectrum measures (articles 4.3 and intended purpose and take into account the objectives set out in the 35 of the EECC Directive). EECC Directive (article 95 of the EECC Directive). The EU Regulatory framework for electronic communications is Tradability of spectrum licences technologically neutral (in particular, Recital 14 of the EECC Directive) Under the EECC Directive, EU member states shall ensure that under- and as such applies to all electronic communications networks and takings may transfer or lease to other undertakings individual rights of services. There is no difference in the regime applicable to fixed, use for radio spectrum. mobile or satellite networks and services. EU member states shall: • submit transfers and leases to the least onerous procedure possible; Flexibility in spectrum use • not refuse the lease of rights of use for radio spectrum where the 3 Do spectrum licences generally specify the permitted use or lessor undertakes to remain liable for meeting the original condi- is permitted use (fully or partly) unrestricted? Is licensed tions attached to the rights of use; and spectrum tradable or assignable? • not refuse the transfer of rights of use for radio spectrum unless there is a clear risk that the new holder is unable to meet the orig- Permitted use restriction inal conditions for the right of use (article 51 of the EECC). Member states shall facilitate the use of radio frequencies, under ‘general authorisations’. However, EU member states shall grant indi- When an operator wishes to transfer rights to use frequencies, it shall vidual rights of use to avoid harmful interference, ensure technical notify the NRA responsible for granting individual rights of use. Such quality of service, safeguard efficient use of spectrum or fulfil other notification must also be made once the effective transfer has occurred. objectives of general interest as defined by EU member states under Notifications shall be made public. EU law. This set of principles is not only for the use of radio frequencies but also for radio spectrum (article 46 of the EECC). Ex-ante regulatory obligations When it is necessary to grant such individual rights, EU member 4 Which communications markets and segments are subject to states must comply with several provisions in particular concerning ex-ante regulation? What remedies may be imposed? the efficient use of resources under the EECC Directive. Also, the now-repealed Authorisation Directive established In February 2003, the Commission published a recommendation detailing that only certain conditions may be attached to rights of use for a list of 18 markets susceptible to being subject to ex-ante regulation. radio frequencies. As a consequence, the permitted use may only Such recommendation was updated in December 2007, reducing the list be restricted under spectrum licences by the following conditions to seven markets and then in 2014, it was reminded that: attached to the rights of use: • the designation of service or type of network or technology for the aim of the regulatory framework is, inter alia, to reduce which the rights of use for the frequency have been granted ex-ante sector-specific regulation progressively as competition in including, where applicable, the exclusive use of a frequency markets develops and, ultimately, for electronic communications for the transmission of specific content or specific audio- to be governed by competition law only. visual services; • effective and efficient use of frequencies; Indeed, in the 2014 recommendation, only four markets were identified, • technical and operational conditions necessary for the avoidance none of which were retail markets: of harmful interference and for the limitation of exposure of the • Market 1: wholesale call termination on individual public telephone general public to electronic fields, where such conditions are networks provided at a fixed location; different from those included in the general authorisation; • Market 2: wholesale voice call termination on individual • maximum duration subject to any changes in the national mobile networks; frequency plan; • Market 3: wholesale local access provided at a fixed location and • transfer of rights at the initiative of the right holder and conditions wholesale central access provided at a fixed location for mass- for such transfer; market products; and • usage fees; • Market 4: wholesale high-quality access provided at a fixed location. • any commitments that the operator obtaining the usage right has made in the course of a competitive or comparative selection The EECC Directive introduced the implementation of ex-ante market procedure; and regulations into the missions of the NRAs and provides that NRAs shall • obligations under relevant international agreements relating to ‘impose ex-ante regulatory obligations only to the extent necessary to the use of frequencies and obligations specific to an experimental secure effective and sustainable competition in the interest of end-users use of radio frequencies. and relax or lift such obligations as soon as that condition is fulfilled’, these obligations include the imposition of access and interconnection Under the EECC Directive, these conditions have remained identical obligations (article 67 of the EECC Directive). ((D) of Annex 1 of the EECC Directive), with additional obligations to Also, the EECC Directive codified the ‘three criteria test’ contained pool or share radio spectrum or allow access to radio spectrum for in the Commission’s Recommendation on Relevant Markets (2002) and other users in specific regions or at the national level. used to determine whether a specific market should be regulated (eg,

30 Telecoms & Media 2021 © Law Business Research 2021 Simmons & Simmons LLP European Union high barriers to entry, no dynamic tendency towards effective compe- where a risk of social exclusion arising from the lack of such tition and insufficiency of competition law). The EECC Directive also access prevents citizens from full social and economic participa- extended the current maximum market-review period from three to five tion in society. years. However, NRAs may still conduct such analysis within shorter intervals if market developments require it. New provisions are intro- This concept is based on the now-repealed Universal Service Directive duced for revision of remedies imposed by NRAs, for instance when but evolved to reflect advances in technology, market developments market conditions have changed because of new commercial agree- and changes in user demand. The national NRA is in charge of ensuring ments or the breach of existing ones or new co-investment agreements. all citizens have access to a universal service. A double-lock system is introduced whereby in cases where BEREC and Operators must provide a certain number of mandatory services, the Commission agree that a draft remedy would create a barrier to the including: single market, the relevant NRA may be required to amend or withdraw • provision of access at a fixed location and provision of tele- the contemplated measure. phone services; • provision of directories and directories enquiry services; Structural or functional separation • provision of public payphones; and 5 Is there a legal basis for requiring structural or functional • measures for disabled users. separation between an operator’s network and service activities? Has structural or functional separation been The EECC Directive sets new mandatory services to which consumers introduced or is it being contemplated? should have access at an affordable price. EU member states may adopt different tariff options to ensure that the services are also affordable The remedy of functional separation was introduced in the Access to consumers with low-income or special social needs such as older Directive in 2009 by the repealed Better Regulation as an exceptional people, end users with disabilities and consumers living in rural or measure and was reproduced identically in the EECC Directive. It may geographically isolated areas. The new services include the provision only be imposed on vertically integrated operators when the relevant of available adequate broadband internet access service and provision NRA concludes that the other ex-ante regulatory obligations have failed of voice communications services at least at a fixed location, indicating to achieve effective competition and that there are important and persis- that EU member states can now extend universal service to mobile tent competition problems or market failures identified concerning the services. ‘Adequate broadband’ means the broadband ‘necessary for wholesale provision of certain access product markets. Such measure social and economic participation in society’ (ie, minimum needed to consists of imposing on the concerned operator a duty or obligation to support services, eg, email, internet banking, standard quality video place activities related to the wholesale provision of relevant access calls and social media (as set out in Annex V)). products in an independently operated business. On this basis, the EU member states may consider that the need for the previous operator shall supply access products and services to its other busi- services set by the now-repealed Universal Service Directive is estab- ness entities and other operators under the same terms and conditions, lished in light of national circumstances and shall be provided along including price and service levels. with the new services as from 21 December 2021. Also, the EECC Directive implemented the possibility of imposing EU member states can designate one or more ‘providers of functional separation on a significant market power (SMP) operator services’ according to the EECC Directive in charge of guaranteeing if the remedies imposed following a market-review process have not the provision of these services for the whole of the territory to be succeeded in achieving competition. covered. Different providers of services may provide different elements The now-repealed Access Directive also introduced for a voluntary of universal services. The universal service must be affordable; NRAs separation mechanism under which a vertically integrated operator that shall monitor the evolution and level of retail tariffs of these services. has been identified as having SMP in one or several markets informs EU member states may require designated providers of services to the competent NRA in advance and in a timely manner of its intent to provide customers with tariff options that depart from those provided transfer their local access network assets or a substantial part thereof under normal commercial conditions. to a separate legal entity under different ownership or to establish a separate business entity to provide to all retail providers, including its Funding of universal service own retail divisions, fully equivalent access products. Upon such infor- The methods for designating operators or providers of services in charge mation, the NRA shall assess the effect of the intended transaction on of the provision of universal service must ensure that such service existing regulatory obligations and, in accordance, shall impose, main- is provided cost-effectively. NRAs that consider that the provision of tain, amend or withdraw obligations. This has been reaffirmed in article universal service may represent an unfair burden on the designated 78 of the EECC Directive. providers of services are given the possibility to calculate the net costs BEREC has published guidelines that an NRA may rely upon when of its provision. If it is found that such an operator is subject to an unfair considering the appropriateness and the manner to implement func- burden, EU member states can, upon request, put in place a mecha- tional separation (Guidance on Functional Separation under articles 13a nism to compensate that provider of services or to share the net cost of and 13b of the revised Access Directive and national experiences). universal service obligations between providers of electronic communications networks and services. According to the EECC Directive, the net Universal service obligations and financing costs of this universal service are to be paid for either through general 6 Outline any universal service obligations. How is provision of taxpayer funds or else through a specific levy on electronic communica- these services financed? tions networks and service providers.

Scope of universal service Under recital 210 of the EECC Directive, universal service is defined as a:

safety net to ensure that a set of at least the minimum services is available to all end-users and at an affordable price to consumers, www.lexology.com/gtdt 31 © Law Business Research 2021 European Union Simmons & Simmons LLP

Number allocation and portability Appropriate sanctions must be provided for by EU member states 7 Describe the number allocation scheme and number including an obligation to compensate subscribers in the case of delay portability regime in your jurisdiction. in the porting or abuse of porting by them.

Under article 94 of the EECC Directive, a number allocation scheme Customer terms and conditions is handled by EU member states through their NRAs, which control 8 Are customer terms and conditions in the communications the granting of rights of use of all national numbering resources and sector subject to specific rules? manage the national numbering plans. NRAs are also under the obligation to establish objective, transparent and non-discriminatory The now-repealed Universal Service Directive established that assigning procedures for the grant of such resources. An equal treat- consumers must be offered contracts of 12 months and operators ment principle must be applied between all providers of publicly cannot offer contracts exceeding 24 months. The conditions and proce- available electronic communications services. The national numbering dures for contract termination should not constitute a disincentive plan and its subsequent amendments must be published subject only to against changing service provider. national security limitations. Consumers and other end users have a right to a contract with EU member states have a role to support the harmonisation of their operator. This contract must comprise several mandatory provi- specific numbers and number ranges within the European Union where sions that include, inter alia, the identity and the address of the operator, this promotes both the functioning of the internal market and the devel- the services provided, the details of prices and tariffs, the means to opment of pan-European services. Implementing measures may be obtain up-to-date information on all applicable tariffs and maintenance taken by the Commission on the subject. charges, payment methods, duration of the contract and the conditions Where the assignment of numbers with exceptional economic value for renewal and termination services and of the contract, any compen- is concerned, EU member states may use, inter alia, competitive or sation and the refund arrangements applicable if service quality levels comparative selection procedures for the assignment of radio frequencies. are not met. The right to use numbers may be subject only to the conditions The now-repealed Universal Service Directive also gave EU listed in Annex I of the EECC. These conditions include, inter alia, desig- member states the possibility to require that the contract include any nation of service for which the number shall be used, including: information that may be provided by the relevant public authorities on • any requirements linked to the provision of that service; the use of electronic communications networks and services to engage • effective and efficient use of numbers in conformity with the EECC in unlawful activities or to disseminate harmful content, and on the Directive; means of protection against risks to personal security, privacy and • number portability requirements in conformity with the EECC personal data. Directive; and Subscribers also have a right to withdraw from their contract • an obligation to provide public directory subscriber information for without penalty upon notice of modification to the contractual condi- transfer of rights in conformity with the EECC Directive. tions proposed by their provider. Subscribers shall receive a notification not shorter than one month of such modification, along with information According to the EECC Directive, NRAs may also grant rights of use on the right to withdraw, without penalty in the case of refusal of these for numbering resources from the national numbering plans for the new terms. provision of specific services to undertakings other than providers Finally, NRAs must ensure that operators publish transparent, of electronic communications networks or services, provided that comparable, adequate and up-to-date information on applicable prices adequate numbering resources are made available to satisfy current and tariffs, on charges due upon termination and standard terms and and foreseeable future demand. conditions in respect of access to, and use of, services provided by them On 6 March 2020, BEREC published guidelines on common criteria to end users and consumers. for assessing non-ECN or ECS undertakings, and the assessment of the The EECC Directive includes the Universal Service Directive ability to manage numbering resources by undertakings other than ECN requirements, harmonises end-user rights and establishes more or ECS. These guidelines also set out rules to avoid the risk of exhaus- contract requirements. The EECC introduces a detailed list of information of numbering resources if numbering resources are assigned to tion requirements to be included in end-user contracts, which include, such an undertaking. Also, the EECC Directive provides that each EU inter alia, information about the technical characteristics of the service, member state shall make available a range of non-geographic numbers the price, the duration of the contracts and conditions for switching, which may be used for the provision of electronic communications procedures for dispute settlements or actions to be taken in security services other than interpersonal communications services and shall and integrity incidents. These requirements also apply to contracts with promote over-the-air provisioning, where technically feasible, to facili- micro and small enterprises acting as end users. New provisions aimed tate switching of providers of electronic communications networks at facilitating the switch from one service provider to another have been or services by end users, in particular, providers and end users of introduced, for instance, provisions dealing with the issue of bundles as machine-to-machine services. an obstacle to switching. Number portability is a requirement under the EECC Directive. It On 17 December 2019, the Commission adopted the Implementing applies equally to fixed and mobile networks and geographic and non- Regulation (EU) 2019/2243, establishing a template for the contract geographic numbers. However, the requirement does not apply to the summary to be used by providers of publicly available electronic porting between numbers from a fixed network to a mobile network communications services. and vice versa. All subscribers of publicly available telephone services This Implementing Regulation also sets out: are entitled to keep their number upon request, independently of their • the length of the contract; service provider. • the presentation of the information (headings, font size and pagi- Operators are required to port and activate a number within the nation); and shortest possible time and within a maximum delay of one working day. • the language requirements. NRAs ensure that the prices charged between operators concerning the provision of portability are cost-orientated. This Implementing Regulation entered into force on 21 December 2020.

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Net neutrality identifies services such as Voice over Long-Term Evolution and linear 9 Are there limits on an internet service provider’s freedom to broadcasting Internet Protocol television services with specific quality control or prioritise the type or source of data that it delivers? of service requirements. Are there any other specific regulations or guidelines on net The practise of zero-rating, whereby traffic from certain sources neutrality? does not count towards any data cap in place for the subscriber, is not prohibited under the rules governing net neutrality. However, BEREC The principle of net neutrality was formally taken into account on the considers that different forms of zero-rating may have different conse- occasion of the 2009 reform of the Telecom Package. The now-repealed quences and that the acceptability of each practise should be assessed Better Regulation Directive included references to the principle of net on a case-by-case basis. For instance, a zero-rating offer where all neutrality. applications are blocked (or slowed down) once the data cap is reached After intense discussions and debate, the European Parliament except for the zero-rated applications would infringe net-neutrality rules. and Council adopted Regulation (EU) 2015/2120 concerning open internet access, which enshrines the principle of net neutrality into EU Platform regulation law. BEREC published guidelines on the implementation by NRAs on 10 Is there specific legislation or regulation in place, and have these European net-neutrality rules in August 2016. At the end of 2019, there been any enforcement initiatives relating to digital BEREC announced that it had worked on an update to the BEREC Net platforms? Neutrality Guidelines, which have been renamed the BEREC Guidelines on the Implementation of the Open Internet Regulation. These As part of the Digital Single Market Strategy, a comprehensive assess- Guidelines are designed to guide the implementation of the obligations ment of the role of online platforms has been conducted. It is also one of NRAs. Specifically, this includes the obligation to closely monitor of the three emerging challenges identified in the Digital Single Market and ensure compliance with the rules to safeguard equal and non- Strategy mid-term review. discriminatory treatment of traffic in the provision of internet access In its mid-term review on the implementation of the Digital Single services and related end-user rights. On 10 October 2019, BEREC Market Strategy, the Commission identified actions to be implemented launched a public consultation that ran until 28 November 2019. The concerning online platforms. Thus, the Commission launched an action received feedback did not justify any major changes to the Guidelines. plan against disinformation and, on 26 September 2018, a self-regu- However, it was clear that some further clarifications were needed and latory code of practice was published to measurably reduce online now these are included in the Guidelines, which were published on 17 disinformation on online platforms, leading social networks and in the June 2020. advertising industry. On 5 December 2018, the Commission reported Regulation (EU) 2015/2120 concerning open internet access guar- on the progress made and published an action plan that foresees an antees the rights of end users to access and use the internet. Providers increase of resources allocated to counter-disinformation efforts. of internet access services are under the obligation to treat all traffic On 1 March 2018, the Commission also adopted a recommenda- equally without discrimination, restriction or interference and irrespec- tion including a set of (non-binding) operational measures to be taken tive of the sender and receiver, the content accessed or distributed, the by companies and member states to tackle illegal content online. Also, applications or services used or provided, or the terminal equipment Regulation (EU) 2019/1150 on promoting fairness and transparency used. This prohibits, in particular, the practise of bandwidth throttling. for business users of online intermediation services was adopted on However, this principle does not prevent providers of internet access 20 June 2019. This Regulation aims at establishing a legal framework services from implementing traffic management measures as long that guarantees transparent terms and conditions for business users as they are transparent, non-discriminatory, proportionate and not of online platforms (that is, that the terms and conditions of platform based on commercial considerations. Three additional exceptions are services are plain and easily available for business users, as well as provided for: that any modification to the terms and conditions is notified with propor- • compliance with other laws; tionate and reasonable advance to their business users), as well as • preservation of integrity; and effective possibilities for redress when these terms and conditions are • security and congestion management measures. not respected by online platforms (ie, online market places, online software application stores, online social media and online search engines). Providers of electronic communications to the public are free to offer Online service providers will need to change their terms and conditions services other than internet access services that are optimised for to include these new requirements. The Regulation entered into force specific content, applications or services or a combination thereof, which with direct effect in EU member states on 12 July 2020. BEREC refers to as ‘specialised services’. However, this is possible only where some conditions are met: Next-Generation-Access (NGA) networks • the optimisation must be necessary to meet requirements of the 11 Are there specific regulatory obligations applicable to content, applications or services for a specific level of quality; NGA networks? Is there a government financial scheme to • the network capacity must be sufficient to provide these services in promote basic broadband or NGA broadband penetration? addition to any internet access services provided; • they must not be usable or offered as a replacement for internet The European Regulatory Framework for electronic communications access services; and and the EECC Directive are technologically neutral so it applies to • must not be to the detriment of the availability of the general NGA networks in the same manner that it applies to other networks. quality of the internet access services for end users. However, the 2010 Commission Recommendation of 20 September 2010 on regulated access to NGA sets out a common approach for promoting As NRAs are in charge of ensuring compliance with these provisions, the consistent implementation of remedies concerning NGAs and they will contribute to the determination of the necessity and capacity provides for regulatory principles that NRAs should follow. NGAs are tests. The recitals of the Open Access Regulation give examples of also dealt with in the 2013 Commission Recommendation on consistent specialised services ‘services responding to a public interest or by non-discrimination obligations and costing methodologies to promote some new machine-to-machine communications services’. BEREC also competition and enhance the broadband investment environment. www.lexology.com/gtdt 33 © Law Business Research 2021 European Union Simmons & Simmons LLP

Directive 2014/61/EU on measures to reduce the cost of deploying considered it necessary to verify whether its rules have achieved their high-speed electronic communications networks also aims at facilitating main objectives (ensuring adequate protection of privacy and confiden- and incentivising the rollout of high-speed electronic communications tiality of communications in the European Union) and whether they are networks by reducing its cost. It includes measures such as the sharing still fit for purpose in the regulatory and technological context. and reuse of existing physical infrastructure, which are expected to It shall now be adapted to the new EU data protection framework create conditions for more cost-efficient network deployment. as well as recent technological and economic developments in the EU The EECC Directive introduced a new mission for NRAs, which is market since the last revision of the ePrivacy Directive in 2009. Such to promote access to, and take-up of, very high capacity connectivity new technologies include, among others, new internet-based services for both fixed and mobile networks. The new EECC Directive sets out such as VoIP, instant messaging and web-based email services, which provisions concerning co-investment and NGAs, in particular, ‘very are not subject to the current ePrivacy Directive. high-capacity networks’. The EECC Directive establishes an exception On 10 January 2017, the European Parliament and Council on access market and price regulation for operators with ‘significant published the first draft of a new Regulation on Privacy and Electronic market power’ undertaking to build or to co-invest in the infrastructure Communications, which shall replace the current ePrivacy Directive and necessary for the creation of high connectivity networks. shall be directly applicable in the EU member states, without having to On 6 March 2020, BEREC published guidelines on very high capacity be transposed into national law. The key aspects of the proposal are networks. The Guidelines set out the criteria that a network must fulfil the following: to be considered a very high capacity network, particularly in terms • applicability of privacy rules to providers of electronic communica- of down and uplink bandwidth, resilience, error-related parameters, tions services (eg, WhatsApp, Facebook Messenger or Skype); latency and variation. The Guidelines shall contribute to the harmoni- • enhancing security and confidentiality of communications sation of the definition of the term ‘very high capacity network’ in the (including content and metadata, such as sender, time, location of European Union. a communication), while reducing unjustified barriers to the free flow of data; Data protection • new opportunities for telecommunication operators to provide 12 Is there a specific data protection regime applicable to the additional services and develop their business, once consent is communications sector? given for communications data content or metadata or both; • more user-friendly and simpler rules on cookies; and Data protection and privacy in the European Union is currently governed • protection against unsolicited electronic communications (spam). by Regulation (EU) 2016/679 (General Data Protection Regulation) (GDPR) and Directive 2002/58/EC (ePrivacy Directive), as amended by The proposal includes fines for breaches in the amount of up to 4 the Citizens’ Rights Directive. per cent of a company’s global revenue or €20 million, depending on Since 25 May 2018, the GDPR directly applies in all EU member whichever is higher. To date, the European Council published several states, without having to be transposed into national law. The GDPR amended drafts of the proposal since September 2017 and no final draft fully regulates the processing of personal data in the European Union. has yet been voted upon. By setting uniformly high standards of data protection, it ensures the On 5 January 2021, the Portuguese Presidency released a new free flow of personal data in the European Union. It has, in particular, version of the draft proposal and succeeded in convincing the EU a significantly broader territorial scope than the previous EU Data member states to agree on a common position. The trialogue nego- Protection Directive. It places, among others, greater emphasis on the tiations with the European Parliament can finally begin. These are to documentation obligations of data controllers to demonstrate their be based on a version from the European Council of Ministers of 10 accountability and significantly strengthens data subjects’ rights to give February 2021. Since there are some points of contention regarding the them more control over their personal data. The GDPR also introduced current text of the Regulation, however, these may not progress quickly significant fines for any data breaches in the amount of up to 4 per cent and the ePrivacy Regulation is certainly not expected to enter into force of a company’s global revenue or €20 million, depending on which- before 2023. ever is higher. These pose a significant financial risk to data controller organisations, such as telecommunication service providers. Many tele- Cybersecurity communication service providers use third-party service providers that 13 Is there specific legislation or regulation in place concerning process and store data on their behalf and thus, must compliance with cybersecurity or network security in your jurisdiction? the provisions outlined in GDPR to avoid any sanctions by the competent authority. The Commission has launched several initiatives concerning The ePrivacy Directive ensures the protection of fundamental cybersecurity. rights and freedoms, in particular the respect for private life, the confi- In 2013, the Commission launched the EU Cybersecurity Strategy dentiality of communications and the protection of personal data in setting five priorities: the electronic communications sector. It obliges EU member states to • the increase of cyber resilience; ensure the privacy of communications and related traffic data. Under • the reduction of cybercrime; the ePrivacy Directive, any interception or surveillance of communi- • the development of the EU cyber defence policy and capabilities cations (including listening, storage or tapping) is prohibited, unless related to the Common Security and Defence Policy; explicitly permitted under national law. To be permissible, such inter- • the development of the industrial and technological resources for ception would have to be necessary, appropriate and proportionate for cybersecurity; and specific ‘public order’ purposes; namely, to safeguard national security, • the establishment of a coherent international cyberspace policy for defence or public security or for the purposes of law enforcement and the European Union and promoting core EU values. would have to comply with the general principles of EU law and the European Convention on Human Rights. In April 2015, the Commission adopted the European Agenda on Security As a part of the Digital Single Market Strategy, the ePrivacy (2015–2020), which replaced the previous Internal Security Strategy Directive is currently under evaluation. In 2015, the Commission (2010–2014). This agenda contains several actions to fight cybercrime.

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Further, the Commission adopted the Communication On 13 September 2017, the Commission issued a proposal for a Strengthening Europe’s Cyber Resilience System and Fostering a regulation on ENISA, the EU Cybersecurity Agency, and on Information Competitive and Innovative Cybersecurity Industry on 5 July 2016. It and Communication Technology cybersecurity certification (the sets a series of measures aiming, inter alia, at stepping up cooperation Cybersecurity Act). The Cybersecurity Act was adopted on 17 April 2019. across the EU, promoting the emerging single market for cyberse- This Regulation foresees a permanent mandate for ENISA and the crea- curity products and services. During this event, as part of the Digital tion of an EU certification framework for ICT products and services. Single Market Strategy presented in May 2015, a public-private partner- The certifications will be recognised in all EU member states, making ship (PPP) on cybersecurity was signed. It aims to foster cooperation it easier for businesses to trade across borders and for purchasers to between public and private actors to allow people in the EU to access understand the security features of the product or service. innovative and trustworthy European solutions including information and communications technology (ICT) products, services and software. Legislation The PPP also aims to stimulate the cybersecurity industry by helping In 2010, the Commission published a proposal for a directive on attacks to align demand and supply sectors, especially in sectors where cyber- against information systems, which was eventually adopted in 2013 security solutions are important, such as energy, health, transport (Directive 2013/40/EU on attacks against information systems and and finance. The PPP includes a wide range of actors, from innovative replacing Council Framework Decision 2005/222/JHA). Under this small and medium-sized enterprises, producers of components and Directive, EU member states are required to criminalise the ‘intentional equipment, critical infrastructure operators and research institutes. An access, without right, to the whole or part of an information system’, at investment of €450 million from the European Union is planned under least concerning cases deemed not to be minor. It also requires that the Horizon 2020 research and innovation programme. illegal system interference and illegal data interference be punished as In the digital single market mid-term review in May 2017, the criminal offences. Provisions also oblige EU member states to crimi- Commission identified cyber-security as one of the key three areas nalise the instigation or aiding and abetting of any of these acts. for further work in the years to come and announced several actions, The NIS Directive is the first EU-wide piece of legislation on including a review of the EU Cybersecurity Strategy of 2013 and cybersecurity. It was adopted in July 2016 and EU member states the mandate of the European Network and Information Security were required to transpose it at the latest by 9 May 2018 and to iden- Agency (ENISA). tify operators of essential services by 9 November 2018. It provides On 18 October 2018, the European Council called for measures for legal measures to boost the overall level of cybersecurity in the to build strong cybersecurity in the European Union. EU leaders European Union. particularly referred to restrictive measures to respond to, and deter, The NIS Directive requires EU member states to adopt a national cyber-attacks. The proposal sets out new initiatives, inter alia, building strategy on the security of network and information systems defining a stronger EU cybersecurity agency, introducing an EU-wide cyber- the strategic objectives and appropriate regulatory measures to security certification scheme and swiftly implementing Directive (EU) achieve and maintain a high level of security of network and information 2016/1148 concerning measures for a high common level of security of systems, covering at least the sectors listed in the Directive, including: network and information systems across the Union (the NIS Directive). • energy; In December 2020, the European Union released its new Cybersecurity • transport; Strategy, aimed at tackling cyber-attacks and at strengthening resilience • banking; against major security breaches by proposing several new initiatives. • financial-market infrastructures; The strategy identifies three dimensions of EU action and provides • health sector; concrete proposals for regulatory, investment and policy initiatives to • drinking-water supply; and safeguard a global and open internet and to protect European values. • distribution and digital infrastructure.

Institutions Each EU member state must designate a national competent authority ENISA is a European cybersecurity centre of expertise, located in on the security of network and information services, which will be in Greece. Founded in 2004 by Regulation (EC) No. 460/2004, ENISA charge of monitoring the application of the Directive at the national actively contributes to a high level of network and information security level. One or more CSIRTs must be designated by each EU member within the European Union, thus contributing to the smooth functioning state, covering at least the sectors listed in the Directive. These CSIRTs of the internal market. must be allocated adequate resources to carry out their tasks, which ENISA works closely with EU member states and the private sector include, inter alia: to provide advice and solutions. This includes: • the monitoring of incidents at a national level; • pan-European cybersecurity exercises; • providing early warnings, alerts, announcements and the dissemi- • the development of national cybersecurity strategies; nation of information to the relevant stakeholders; • Computer Emergency Response Team’s (CSIRT) cooperation and • participating in the CSIRTs network; or capacity-building; • establishing cooperation relationships with the private sector. • studies on data protection issues; • secure cloud adoption; and The Directive established a cooperation group to support and facili- • technology aimed at improving life and trust services. tate strategic cooperation and the exchange of information among EU member states and to develop trust and confidence and to achieve a ENISA also supports the development and implementation of EU high common level of security of network and information systems in Network and Information Security policy and legislation. the European Union. After a year-long pilot phase, the EU institutions set up a perma- Under the NIS Directive, two categories of actors are subject to nent Computer Emergency Response Team (CERT-EU) for the EU security requirements: institutions, agencies and bodies in September 2012. It is composed of • operators of essential services; and a team of IT experts and cooperates closely with other CERTs in EU • digital service providers. member states as well as with companies specialising in IT security. www.lexology.com/gtdt 35 © Law Business Research 2021 European Union Simmons & Simmons LLP

Operators of essential services are private businesses or public entities Also, on 12 September 2018, the Commission presented the Proposal with an important role for society and the economy, and will have to be for a Regulation establishing the European Cybersecurity Industrial, identified by each member state following three criteria: Technology and Research Competence Centre and the Network of • the entity provides a service essential for the maintenance of crit- National Coordination Centres (COM(2018)630). This Regulation ical societal or economic activities, the provision of which depends proposes to build from the contractual PPP on cybersecurity created on network and information systems; in 2016, to set up a cybersecurity competence network to support the • an incident would have significant disruptive effects on the provi- development and deployment of cybersecurity technologies. On 11 sion of that service; and December 2020, the European Council and Parliament reached a provi- • they operate in the sectors exhaustively listed in the Directive. sional agreement on a proposal to set up a European cybersecurity industrial, technology and research competence centre and a network Digital service providers are defined as being any legal person of national coordination centres. The centre, in cooperation with the that provides: network, will deliver cybersecurity-related financial support from the • a service of an online marketplace; Horizon Europe and Digital Europe programmes. The centre will be • online search engine; and located in Romania. Its functioning will be funded primarily by Horizon • cloud computing service. Europe and Digital Europe. The regulation establishing the centre will enter into force 20 days after its publication in the EU’s Official Journal. Concerning digital service providers, EU member states will have The centre will be established for the period from the entry into force of to ensure that service providers identify and take appropriate and the regulation to 31 December 2029. proportionate technical and organisational measures to manage the risks posed to the security of network and information systems Big data that they use in the context of offering their services. The same 14 Is there specific legislation or regulation in place, and have requirement applies to operators of essential services concerning there been any enforcement initiatives in your jurisdiction, the security of network and information systems they use in their addressing the legal challenges raised by big data? operations. Additionally, EU member states shall ensure that these operators of essential services also take appropriate measures to Big data plays a major role in the European Union and was subject to prevent and minimise the impact of incidents affecting the security of various actions taken by EU institutions. The European Union recog- the network and information systems used for the provision of such nises the potential of big data as a driver of the economy and innovation essential services, with the view to ensuring the continuity of these in its EU Digital Single Market Strategy and points out that it is becoming services. Both categories of operators are also subject to an obligation essential to the development of data-driven technologies and services. of notification to the competent authority or the CSIRT without undue The European Council marked big data as a high priority in its political delay of any incident having a substantial impact on the provision of agenda in October 2013. In the context of the action plan of 2 July 2014 their services. on how to maximise the EU’s data-driven economy, the Commission On 13 September 2017, the Commission adopted Communication recommended investing in big data solutions and infrastructure. In this COM(2017)476 final/2, (NIS Toolkit), which aims at supporting EU context, it suggested setting up a €2.5 billion big data PPP, creating a member states in their efforts to implement the Directive swiftly and network to help individuals building sustainable businesses using big coherently across the European Union. It presents the best practices data and adopting new rules on data ownership and liability. from the EU member states and provides an explanation and interpreta- The European Data Protection Supervisor (EDPS) stressed the tion of specific provisions of the Directive to clarify how it should work importance of coherent rights' enforcement in the age of big data in in practice. several opinions and initiatives. The EDPS is an independent institution On 6 December 2020, the EU Commission published its proposal of the European Union responsible for ensuring the protection of an for a directive on Security of Network and Information Systems, individual's rights in the context of processing personal data. It set up (NIS2 Directive). The NIS2 Directive is designed to update the current the Ethics Advisory Group in February 2016, which assesses the ethical NIS Directive. The proposed NIS2 Directive suggests abolishing the implications of how personal data is defined and used in the context of distinction between operators of essential services and digital service big data and artificial intelligence. providers and strengthens the security requirement for companies by As requested in the EDPS opinion of 23 September 2016, a imposing a risk-management approach providing a minimum list of voluntary network of regulatory bodies (the Digital Clearing House) basic security elements that must be applied. was established. The goal of the Digital Clearing House is to share It also introduces better provisions for incident reporting, content information about possible abuses in the digital ecosystem and the and timelines. EU member states were also required to prepare a CSIRT possibilities to handle them. The report also recommends that the EU and a competent national NIS authority. The proposal for the NIS2 institutions, together with external experts, investigate the possibility Directive will be subject to negotiations between the European Council to create a common cyberspace where individuals can interact without and Parliament in 2021. being tracked. On 13 September 2017, the Commission and the High Representative The text of a European Parliament resolution on the implications of the Union for Foreign Affairs and Security Policy published a Joint of big data on fundamental rights was tabled by rapporteur Ana Gomes Communication on Resilience, Deterrence and Defence: Building Strong in October 2016. The European Parliament passed this non-legislative Cybersecurity for the EU. This wide-ranging cybersecurity package resolution on 14 March 2017. The European Parliament stressed that builds on existing instruments and presents new initiatives to further the immense opportunities of big data could only be fully enjoyed by improve EU cyber resilience and response in three key areas: citizens and institutions within the European Union if public trust in new • building EU resilience to cyber-attacks and stepping up the technologies was ensured by strong enforcement of fundamental rights, European Union’s cybersecurity capacity; compliance with current EU data-protection law and legal certainty • creating an effective criminal law response; and for all actors involved. According to the resolution, big data analytics • strengthening global stability through international cooperation. pose specific challenges for fundamental rights and raise concerns over discrimination and security. The most pressing risks associated

36 Telecoms & Media 2021 © Law Business Research 2021 Simmons & Simmons LLP European Union with data processing activities include security breaches, unauthorised retain various call detail records for law enforcement purposes. The access to data and unlawful surveillance. In that regard, the European European Union is concerned that this type of rule might hinder the Economic and Social Committee has published a study concerning the free flow of data. Digital Single Market vice president, Andrus Arsip, ethics of big data and how to balance economic benefits and ethical declared that: questions of it in the EU policy context. According to the European Parliament, the intrinsic purpose of big Data should be able to flow freely between locations, across data analysis should be the achievement of comparable correlations borders and within a single data space . . . in the EU, data flow and with as little personal data as possible. Science, business and public data access are often held up by localisation rules or technical communities should therefore focus on research and innovation in the and legal barriers. field of data anonymisation. The resolution also points out that it is of particular importance to raise the awareness of EU citizens about digital The Building European Data Economy initiative, part of the Digital Single rights, privacy and data protection. It concludes that the corresponding Market strategy, aims at fostering the best possible use of the poten- risks in the context of big data analysis should be addressed with tial of digital data to benefit the economy and society. Following the specific guidelines, more transparency and accountability. adoption of a Communication on Building a European Data Economy, Together with various initiatives in the field of public-sector data, a Staff Working Document in January 2017 and a public consultation, research data and private-sector data, the Commission announced its Regulation (EU) 2018/1807 on a framework for the free flow of non- intention to fund a support centre for data sharing under the Connecting personal data in the European Union was adopted. The Regulation Europe Facility. This support centre will make it easier to share entered into force in December 2018, with effect in June 2018. This private-sector data by providing best practices and know-how. Also, Regulation prohibits EU member-state governments from putting the Commission announced several initiatives that will make different in place data localisation restrictions, except if they are required for types of data available for re-use in Communication COM(2018)232 national security and similar objectives because these represent a form final Towards a Common European Data Space and accompanying of protectionism for which there is no place in a true single market. The Commission Staff Working Document SWD(2018)125 final Guidance on goal is to create legal certainty for businesses, with reassurance that Sharing Private-Sector Data in the European Data Economy. This Staff they can process their data anywhere in the European Union. According Working Document aims to provide a toolbox on legal, business and to the Council of Europe, it will, in the long run, increase trust in cloud technical aspects of data sharing and transfers for companies that are computing and counter vendor lock-in, resulting in a more competitive data holders or data users. cloud-computing market and a boost of operational efficiency for EU On 19 February 2020, the Commission published Communication businesses that operate across borders. COM(2020)66 ‘A European strategy for data’, which outlines a strategy for policy measures and investments to enable the data economy for Key trends and expected changes the coming five years. This Communication announces the creation of 16 Summarise the key emerging trends and hot topics in nine European common spaces and the continuation of work on the communications regulation in your jurisdiction. European Open Science Cloud. This data strategy is presented at the same time as the Commission’s Communication on ‘Shaping Europe’s Covid-19 accelerated many changes that were already happening in the digital future’ and a white paper on artificial intelligence. That same day, TMT sector. In the latest Deloitte TMT Predictions 2021 report, global the Commission launched a public online consultation regarding the TMT trends were identified, which included: European strategy for data. • gaining an intelligent edge; As part of its data strategy, on 25 November 2020, the Commission • the rise of 5G; released a Regulation on European data governance, which plays a vital • cloud services; and role in ensuring the European Union’s future leadership in the global • the use of drones. data economy. This new regulation aims to create a framework that encourages greater reuse of data by increasing trust in data interme- MEDIA diaries and strengthening various data-sharing mechanisms across the European Union. Regulatory and institutional structure Further, the European Union considers that free flow of non- 17 Summarise the regulatory framework for the media sector in personal data is a prerequisite for a competitive data economy within your jurisdiction. the Digital Single Market. Regulation (EU) 2018/1807 on a framework for the free flow of non-personal data in the European Union was Articles 167 and 173 of the Treaty on the Functioning of the European adopted. It aims at removing obstacles to the free movement of non- Union (TFEU) can be considered the legal basis for audiovisual policy personal data and started to apply in May 2019. in the European Union, with the main objective being to create a single European market for audiovisual services. It encourages cooperation Data localisation between the EU member states, in particular, in the audiovisual sector, 15 Are there any laws or regulations that require data to be and supports them where necessary. Within the European Union, stored locally in the jurisdiction? the European Commission (the Commission) is responsible for any media policy. The GDPR contains provisions concerning international transfers of Within the European Union, audiovisual media services (including data, but it contains no data localisation obligations. Conversely, the broadcasting and on-demand services) are broadly regulated under principle of free flow of data is enshrined in the GDPR. At the time of Directive 2010/13/EU (Audiovisual Media Services Directive) (AVMS writing, no specific legislation or regulation is yet in place at the EU level Directive). The AVMS Directive was adopted to codify and harmonise the concerning data localisation. existing legislation concerning audiovisual media services. Audiovisual Some EU member states have adopted data localisation laws. media service is defined under article 1, paragraph 1a, of the AVMS For instance, Germany has passed the Data Retention Act, which Directive, as a service that is: requires public electronic communication and internet providers to www.lexology.com/gtdt 37 © Law Business Research 2021 European Union Simmons & Simmons LLP

under the editorial responsibility of a media service provider healthcare and transportation) services based on the nationality, and the principal purpose of providing programmes, to inform, residence or customer place of establishment; and entertain or educate, to the general public by electronic commu- • indirect restrictions on cross-border online trade, including discrim- nications network inatory use of general terms and conditions (including prices, conditions and acceptance of payment methods). On 6 November 2018, the Commission adopted a revised version of the AVMS Directive, Directive 2018/1808 (AVMS Directive 2.0). EU member The Geo-Blocking Regulation generally covers audiovisual copyright states had to transpose the new rules into their national legislation by content, but not audiovisual content (eg, e-books, online music, software 19 September 2020. AVMS Directive 2.0 ensures that EU regulation is and videogames). On 20 November 2020, the Commission published a adapted to the advanced convergence of audiovisual media services report on the first short-term review of the Geo-Blocking Regulation. and current technological developments. Concerning extend the scope of the Geo-Blocking Regulation, the report AVMS Directive 2.0 applies to broadcasts over terrestrial, cable, identifies potential benefits, particularly for audiovisual content, the satellite and mobile networks as well as over the internet (platform availability of which is often limited within national territory. However, and technology neutrality). It distinguishes between linear services the report also identifies possible challenges for investment in content (which push content to viewers, eg, by broadcasting via traditional production and implications for the overall sector ecosystem and television, internet or mobile phones) and non-linear services (which welfare impact requiring further assessments. Overall, the effects of pull content from a network, eg, video-on-demand services), as well as extending the scope of the Regulation would largely depend on copy- video-sharing platforms (which, without bearing editorial responsibility, right-licensing practices and copyright-law considerations. Therefore, it provide programmes and user-generated videos, or both). Under AVMS remains to be seen whether the scope of the Geo-Blocking Regulation Directive 2.0, all three services are subject to tight regulations. will be extended shortly. In February 2014, the European Regulators Group for Audiovisual Media Services was established, which is responsible for advising on Ownership restrictions the implementation of the AVMS Directive. 18 Do any foreign ownership restrictions apply to media The AVMS Directive, in particular, aimed to harmonise services? Is the ownership or control of broadcasters national rules on: otherwise restricted? Are there any regulations in relation • regulation of television broadcasts, including satellite broadcasts, to the cross-ownership of media companies, including radio, under the country of origin, including the right for EU member television and newspapers? states to restrict the retransmission of unsuitable broadcast content from another EU member state; The ownership of broadcasters is, to a great extent, regulated by the • promotion, production and distribution of television programmes EU member states under their national broadcasting laws. National law within the EU, including quotas for EU-produced content and must, however, comply with EU law, including (among others) the provi- content made by independent producers; sions of the TFEU and AVMS Directive 2.0. • access by the public to major (sports) events; EU law prohibits, in particular, any discrimination on grounds of • television advertising, product placement and programme nationality. Consequently, foreign ownership restrictions are generally sponsorship; prohibited. EU law also prohibits any actions that can prevent or impede • protection of minors from unsuitable content; and the activities of persons or companies established in other EU member • the right of reply (of any natural or legal person whose legiti- states. The TFEU outlines the following fundamental freedoms with mate interest has been damaged by an assertion in a television which any national laws must comply: programme). • article 34: prohibition of national restrictions on the freedom of movement of goods within the European Union (eg, including mate- AVMS Directive 2.0 added in particular the following new elements: rial, sound recordings and other apparatus for broadcasting); • providing broadcasting companies with more flexibility on the time • article 49: right of EU citizens and companies to establish busi- frame of television advertising; nesses in other EU member states (eg, including broadcasting • the general permission of product placement; businesses); • simplification of the country-of-origin principle; • article 56: prohibition of national restrictions on the freedom to • clarification of cooperation procedures between EU member states; provide services by EU citizens (eg, including television and radio • extension of the provisions on EU-produced content to on-demand broadcasting); and service providers; • article 63: free movement of capital in the EU eg, (including, capital • alignment of the rules on the protection of minors for television for purchasing shares in a company). broadcasting and on-demand services; and • extension of the scope of applicability of the AVMS Directive on National laws restricting any of these fundamental freedoms may be video-sharing platforms. compliant with EU laws under certain circumstances (eg, where necessary for public safety or public health reasons) or in the case of an In February 2018, Regulation (EU) 2018/302 on addressing unjusti- overriding public interest (eg, maintenance of the social order, protection fied geo-blocking and other forms of discrimination (Geo-Blocking of consumers’ rights, guarantee of the freedom of speech and plurality of Regulation) was adopted, which entered into force on 22 March 2018. media). However, such restrictions have to be interpreted narrowly and The regulation took effect on 3 December 2018 and shall prevent geo- must be objectively justified. blocking (ie, businesses from discriminating (private or commercial)) According to recitals 8 and 94 of the AVMS Directive, EU member end customers in obtaining goods or certain services being offered states shall prevent any actions that create dominant positions or a within the European Union. To this end, the following measures are concentration of media ownership and shall contribute to the promo- prohibited: tion of media pluralism. AVMS Directive 2.0 includes new provisions • electronic measures blocking or restricting the access of end on the transparency of media ownership (recitals 15 and 16, article customers to online offers of goods or (non-finance, gambling, 5). According to the Commission, these provisions will have positive

38 Telecoms & Media 2021 © Law Business Research 2021 Simmons & Simmons LLP European Union spillover effects on media pluralism. The revised Directive particularly budget to independent European works. EU member states shall define allows EU member states to adopt legislative measures, obligating such ‘independent works’, taking into account the ownership of the service providers under their jurisdiction to make accessible information production company, the number of programmes supplied to the same concerning their ownership structure, including the beneficial owners. As broadcaster and the ownership of secondary rights. far as Germany is concerned, the final proposal of the State Media Treaty The AVMS Directive does not distinguish services through trans- implementing the revised AVMS Directive – currently under review by mission (eg, online or mobile content). It rather distinguishes between the Commission – does not make use of such legislative permission. linear and non-linear services. To the extent online or mobile content qualify as audiovisual media services, they are, thus, regulated in the Licensing requirements same way as ‘traditional’ broadcast networks and fall under the scope 19 What are the licensing requirements for broadcasting, of the AVMS Directive. including the fees payable and the timescale for the necessary AVMS Directive 2.0 introduced a content quota according to which authorisations? providers of non-linear services must secure at least a 30 per cent share of European works in their catalogues and ensure prominence of those The licensing requirements, fees and timescales for authorisations are works. However, this quota shall not apply to media service providers generally regulated by the EU member states. The AVMS Directive, with a low turnover or a low audience. however, specifies which EU member state is competent to regulate a broadcaster (under the country-of-origin principle) and sets out certain Advertising common minimum requirements and standards with which broad- 21 How is broadcast media advertising regulated? Is online casters have to comply and that are enforceable by national authorities. advertising subject to the same regulation? These minimum standards include, among others: • transparency and information obligations; The delivery of television advertising, sponsorship and teleshopping are • prohibition on discrimination based on race, religion or nationality; broadly regulated by the AVMS Directive. A prerequisite for the applica- • accessibility for users with a visual or hearing disability; bility of the AVMS Directive is that the online service is qualified as an • prohibition of surreptitious or subliminal commercial audiovisual media service or as a video-sharing platform. communication; The AVMS Directive aims at protecting consumers against exces- • rules on commercial communications for alcoholic beverages; sive television advertising. It, therefore, outlines strict rules to ensure • protection of cinematographic works; consumer protection, stipulating, in particular, that television advertising • protection of minors; and and teleshopping shall be recognised as such and shall be distinguish- • promotion of EU and independent works. able from editorial content, either by optical, acoustic or spatial means. It allows for an interruption of the transmission of films (excluding series, AVMS Directive 2.0 further introduced, among other things: serials and documentaries) once for each scheduled period of at least 30 • prohibition of incitement to violence or hatred directed against minutes. Under the AVMS Directive, the proportion of television adver- any groups or members of such groups because of an affiliation tising and teleshopping spots within a given hour was not permitted to to one of the categories that are subject to equal treatment princi- exceed a total of 20 per cent. Under the AVMS Directive 2.0, broadcasting ples (eg, race, religion or nationality), article 21 of the EU Charter of companies are provided with more flexibility on the time frame of televi- Fundamental Rights; sion advertising, changing the limit for advertising from 20 per cent per • prohibition of public provocation to commit a terrorist offence; and hour to 20 per cent per day (between 6am and 6pm and between 6pm • even stronger rules on commercial communications for alcoholic and 12pm). beverages. The AVMS Directive prohibits certain types of advertising, namely advertising or teleshopping inserted during religious services and tele- EU member states are not entitled to apply less stringent rules to broad- shopping for medicinal products subject to a marketing authorisation or casters but may impose stricter rules on audiovisual media service medical treatment. It also restricts the advertising of alcoholic bever- providers under their jurisdiction, provided that these do not violate ages to a large extent. However, AVMS Directive 2.0 widely waived the fundamental rights. ban on product placement. In addition to the restrictions under the AVMS Directive, Directive Foreign programmes and local content requirements 2003/33/EC (Tobacco Advertising Directive) contains an EU-wide ban on 20 Are there any regulations concerning the broadcasting cross-border tobacco advertising and sponsorship in the media other of foreign-produced programmes? Do the rules require a than television. The ban covers print media, radio, internet and events’ minimum amount of local content? What types of media fall sponsorship involving several EU member states (eg, the Olympic outside this regime? Games or Formula One racing). Any form of advertising is also subject to the fundamental principles According to the AVMS Directive, EU member states shall ensure, where of human dignity, non-discrimination on the grounds of race, nationality, practicable, that broadcasters reserve a majority of their production, religious or political belief as well as the protection of minors, health, budget and transmission time (except for time allocated to news, sport, safety and the environment. Further, Directive 2006/114/EC concerning games, advertising, teletext services and teleshopping) for ‘European misleading and comparative advertising stipulates general requirements works’ (as defined in article 1 of the AVMS Directive). EU member states for advertising, irrespective of the means of transmission. Additionally, shall report on the implementation of this obligation. Such report shall, article 13 of Directive 2002/58/EC on privacy and electronic communica- in particular, include a statistical statement on the achievement of the tions establishes certain requirements for unsolicited communications proportion for each television programme. such as electronic mail for direct marketing. These rules must be imple- EU member states shall also ensure, where practicable, that mented into national law by the EU member states. broadcasters reserve at least 10 per cent of their transmission time for In 1992, advertising industry representatives in Europe launched European works supplied by independent producers. Alternatively, EU the European Advertising Standards Alliance (EASA), an independent member states may reserve at least 10 per cent of their programming coordinating body promoting responsible advertising. EASA provides www.lexology.com/gtdt 39 © Law Business Research 2021 European Union Simmons & Simmons LLP

detailed guidance on how to advertise self-regulation for the benefit of If a service does not qualify as an audiovisual media service, it is consumers and businesses. It has become the single authoritative voice covered by Directive 2000/31/EC (e-Commerce Directive). A prerequi- on advertising self-regulation and promotes high ethical standards in site for the applicability of the e-Commerce Directive is that the service commercial communications. In 2016, the Commission explicitly recog- qualifies as an information society service. According to article 1, para- nised the role and effectiveness of advertising self-regulation. graph 1 of Directive 98/34/EC (Information Society Services Directive), such information society service is any service normally provided for Must-carry obligations remuneration, at a distance, by electronic means and at the individual 22 Are there regulations specifying a basic package of request of the recipient of the service (eg, web-based content, video programmes that must be carried by operators’ broadcasting portals, e-commerce and web-hosting). distribution networks? Is there a mechanism for financing the Similar to the AVMS Directive, the e-Commerce Directive is also costs of such obligations? based upon the country-of-origin principle. A provider of information society services is therefore generally subject to regulation in the EU According to article 31, paragraph 1 of Directive 2002/22/EC (Universal member state in which it has its establishment. In general, providers Service Directive), EU member states may impose must-carry obliga- of information society services do not require prior authorisation under tions for the transmission of specific broadcast channels or services on the AVMS Directive or the e-Commerce Directive. companies providing electronic communications networks for the distri- On 6 May 2015, the Commission adopted the Digital Single Market bution of radio or television broadcast (eg, cable companies or telecoms Strategy, which announced a legislative initiative on harmonised rules operators). The prerequisite is that a significant number of end users use for the supply of digital content and services and online and other such networks as the principal means for radio and television broadcasts. distance sales of goods. These initiatives were followed by two new Must-carry obligations shall only be imposed to the extent neces- directives: sary to meet clearly defined objectives of general interest (eg, media • Directive (EU) 2019/770 on certain aspects concerning contracts for plurality). According to the European Court of Justice, economic consid- the supply of digital content and digital services was enacted on 10 erations would not be considered general-interest obligations. June 2019. It shall be transposed into EU member states’ national The rules for must-carry obligations must be transparent, propor- law by 11 June 2021. This Directive creates a holistic framework for tionate and subject to periodical review at least every three years. They business-to-consumer transactions regarding digital content and must be clearly identified and based on objective non-discriminatory digital services. ‘Digital content’ means data created and made avail- criteria known in advance. Broadcasters and network operators have to able in digital form (eg, audio and video contents, video games and be able to know their specific rights and obligations. other software). Digital services are such that enable processing of Must-carry obligations may also entail a provision for propor- or access to digital data; or interaction with data uploaded by any tionate remuneration. However, it must be ensured that there is no user of the service (eg, over-the-top communications services). EU discrimination in the treatment of different companies providing elec- member states are free to adopt this framework to business-to- tronic communications networks in similar circumstances. business transactions as well. The Directive stipulates criteria for Article 31, paragraph 1 of the Universal Service Directive does not defects in digital content and services, and minimum standards for cover the content of the services delivered (eg, which broadcasters sellers’ warranty obligations (eg, provision of updates). Guidance benefit from must-carry obligations). Such content issues are, however, on the relation between (IT and cybersecurity) vulnerabilities and subject to the principles of non-discrimination and proportionality. defectiveness in such products, however, is not included. Warranty AVMS Directive 2.0 introduced a content quota of 30 per cent share obligations for digital content and services might also be imposed of European works. Where EU member states require media service on sellers of hardware with pre-installed software (apart from providers under their jurisdiction to contribute financially to the produc- those according to Directive (EU) 2019/771). tion of European works, including via direct investment in content and • Directive (EU) 2019/771 on certain aspects concerning contracts contribution to national funds, they may also require media service for the sale of goods entered into force on 11 June 2019. It shall be providers targeting audiences in their territories, but established in transposed into EU member states’ national law by 1 July 2021 and other EU member states to make such financial contributions, which enforced no later than 1 January 2022. The initial proposal envis- shall be proportionate and non-discriminatory. ages the regulation of online and other distance sales of goods. Such financial contribution shall be based only on the revenues However, the enacted version aims to ensure the proper functioning earned in the targeted EU member states. If the member state where of the internal market, while providing consumers with a high level the provider is established imposes such a financial contribution, it of protection. It does so by laying down certain common rules on shall take into account any financial contributions imposed by targeted sales contracts between sellers and consumers. These cover: EU member states. However, the obligation to contribute financially • conformity of goods with the contract; to the production of European works shall not apply to media service • remedies if there is no conformity; providers with a low turnover or a low audience. • ways to exercise these remedies; and • commercial guarantees. Regulation of new media content 23 Is new media content and its delivery regulated differently Digital switchover from traditional broadcast media? How? 24 When is the switchover from analogue to digital broadcasting required or when did it occur? How will radio frequencies The delivery of new media content is regulated by the AVMS Directive, if freed up by the switchover be reallocated? and as far as it qualifies as an audiovisual media service. Regulation (EU) 2017/1128 on cross-border portability of online According to the Commission, the European Union is leading the world content services (the Portability Regulation) obliges providers of in switching from analogue to digital television. The Commission recom- online content, including audiovisual media services, to enable paying mended that switch-off in all EU member states should be completed subscribers to access and use such service under terms equal to the by 2012. By the end of 2015, all EU member states had finally completed offering at each subscriber’s residence, within all EU member states. the switchover.

40 Telecoms & Media 2021 © Law Business Research 2021 Simmons & Simmons LLP European Union

The re-farming of freed-up spectrum is mainly regulated by the EU In November 2016, the Commission organised a colloquium on funda- Radio Spectrum Policy Programme (RSPP), which was established in mental rights focusing on media pluralism and democracy, including 2012. The RSPP covers all types of radio spectrum use and sets general topics such as: regulatory principles and policy objectives to enhance the efficiency and • how to protect and promote media freedom and independence flexibility of spectrum use in the EU. A key aspect of the programme from state intervention or undue political or commercial pressures; is the establishment of an inventory of spectrum bands identifying the • how to empower journalists and protect them from threats of phys- current use of spectrum together with an analysis of technology trends, ical violence or hate speech; and future needs and spectrum-sharing opportunities. Through the use of • the role of media and ethical journalism in promoting funda- spectrum bands, the Commission aims to identify inefficient spectrum mental rights. allocations and to free up capacity for new (more economic and efficient) uses of such spectrum. AVMS Directive 2.0 includes new provisions on the independence of regulators (recital 53, article 30) and transparency of media ownership Digital formats (recitals 15 and 16, article 5). According to the Commission, these provi- 25 Does regulation restrict how broadcasters can use their sions will have positive spillover effects on media pluralism (European spectrum? Commission, 8 November 2018, answering the parliamentary question on the concentration of media ownership). AVMS Directive 2.0 particu- No. This is regulated by the EU member states themselves. larly allows EU member states to adopt legislative measures, obliging service providers under their jurisdiction to make accessible informa- Media plurality tion concerning their ownership structure, including the beneficial 26 Is there any process for assessing or regulating media owners. As far as Germany is concerned, the new State Media Treaty, in plurality (or a similar concept) in your jurisdiction? May the force since 7 November 2020 and aimed to implement AVMS Directive authorities require companies to take any steps as a result of 2.0, does not make use of such legislative permission. such an assessment? Key trends and expected changes Media pluralism is protected at the EU level as a part of the fundamental 27 Provide a summary of key emerging trends and hot topics in right to information and freedom of expression, which is stipulated in media regulation in your country. article 11 of the EU Charter of Fundamental Rights. Also, article 30 of the AVMS Directive assumed the independence of audiovisual media On 15 December 2020, the Commission published a legislative proposal regulators. However, under the AVMS Directive, there were no clear on a Single Market For Digital Services (Digital Services Act) (DSA), and enforceable safeguards available to ensure the independence of amending the e-Commerce Directive. The expressed purpose of the DSA regulators. is to update the EU’s legal framework, in particular by modernising the In October 2011, the Commission appointed a high-level expert e-Commerce Directive adopted in 2000. The DSA aims to modernise and group on Media Pluralism and Freedom to provide recommendations create an EU-wide uniform framework on: on media plurality. The Commission also established the Centre for • the handling of illegal or potentially harmful content online; Media Pluralism and Media Freedom (CMPF). The CMPF’s objective is • the liability of online intermediaries for third-party content; to accompany the process of EU integration regarding media pluralism • the protection of users’ fundamental rights online; and and to develop policy reports on EU competencies in this area. • bridging the information asymmetries between the online interme- In 2013, the CMPF conducted a pilot test implementation of the diaries and their users. Media Pluralism Monitor Tool (MPM Tool). The MPM Tool was to identify potential risks to media pluralism in the European Union and provide Further, the DSA is meant to improve content moderation on social support to policy and rulemaking processes. On 30 June 2014, the media platforms to address concerns about illegal content. Commission adopted the Work Programme for ‘Measures concerning In September 2018, however, the Commission identified the need the digital content and audiovisual and other media industries’ and for further action concerning the 2019 European Parliament elections. related pilot projects in the field of media pluralism and freedom to It published Communication COM(2018)637 on securing free and fair finance the implementation of the MPM Tool. EU elections. EU member states were called to implement adequate In 2016, an examination of the 28 EU member states, as well as measures involving different sectors, stakeholders and (technical) two candidate countries, was carried out via the MPM Tool. The result means, to safeguard election processes against targeted disinformation showed that none of these countries were free from risks relating to campaigns and other undue interference (eg, cybersecurity threats and media pluralism and media freedom. It also showed erosion to freedom illegal funding). of expression and protection to journalists in one-third of the countries. In December 2018, the Commission published the Joint The key findings of the examination were the following: Communication JOIN(2018)36 action plan against disinformation, • high concentration of media ownership with a significant barrier introducing a concept for the protection of the European Union’s core to a diversity of information and viewpoints represented in media democratic values. This involved establishing specialised institutions content as a result; for identified disinformation campaigns and threat sources, uniform • lack of transparency of media ownership, which makes it difficult mechanisms for coordinated countermeasures, whereas both civil for the public to understand the biases in media content; society and private-sector companies form integral parts in these plans. • media authorities in many countries were under strong political pressure, particularly concerning appointment procedures and the composition of authorities; • underdeveloped media literacy policy; • lack of adequate access to media; and • underrepresentation of women in media.

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REGULATORY AGENCIES AND COMPETITION LAW • the Radio Spectrum Policy Group: comprising governmental officials and experts in the field of radio spectrum regulation and Regulatory agencies assisting the Commission in the development of radio spectrum 28 Which body or bodies regulate the communications and policy at the EU level; and media sectors? Is the communications regulator separate • the European Regulators Group for Audiovisual Media Services from the broadcasting or antitrust regulator? Are there (ERGA): while cooperation between EU national supervisory mechanisms to avoid conflicting jurisdiction? Is there a authorities in the broadcasting sector has constantly increased specific mechanism to ensure the consistent application of since 2000, the resulting structures were formalised by the AVMS competition and sectoral regulation? Directive 2.0. ERGA essentially operates as a consulting organ of the Commission. The responsible administrative body for telecoms and media policy at the EU level is the European Commission (the Commission). It is also As far as regulatory supervision of the broadcasting sector is responsible for the enforcement of EU competition law and EU competi- concerned, AVMS Directive 2.0 introduced requirements on the inde- tion policy. pendence of national regulatory authorities. These obliged EU member Within the Commission, the following bodies are relevant for the states to ensure that such authorities are legally distinct, functionally communications and media sectors: independent and remain free from any undue instructions of their • the Directorate-General for Communications Networks, Content governments and any other public or private body. Eu member states and Technology (DG Connect): responsible for carrying out and shall also oblige their national regulatory authorities to exercise their developing the Commission’s Digital Single Market Strategy powers impartially, transparently and in a manner fostering media (including policies on the digital economy and media) and for pluralism, cultural and linguistic diversity, consumer protection, acces- supervising and monitoring the implementation of the EU telecoms sibility, non-discrimination, as well as fair competition and functioning and broadcasting regulations in the EU member states; of the internal market. Finally, national regulatory authorities must be • the Directorate-General for Competition (DG Comp): responsible for adequately funded to carry out their functions (including contributing to the application and enforcement of EU competition law in the area the work of the ERGA) effectively. of telecoms and broadcasting at the EU level; To ensure EU-wide consistent application of its regulations, the • the Directorate-General for Internal Market, Industry, AVMS Directive provides for information obligations of its EU member Entrepreneurship and Small and Medium-sized Enterprises: states (towards each other as well as the Commission) regarding any responsible for ensuring an open internal market for goods and information required for the application of this Directive. AVMS Directive services in the European Union, in particular relating to electronic 2.0 has reinforced these obligations as follows: and online commerce; and • the Directorate-General for Justice and Consumers: responsible for any media services to be wholly or mostly directed at the audi- EU policy on justice, fundamental rights and consumers, including ence of another member state shall be notified between informed the protection of EU citizens’ personal data anywhere in the and concerned national regulatory authorities, and the former European Union and other data protection policy at the EU level. shall assist the latter on information gathering on such service providers’ activities. The Commission’s Directorate-Generals cooperate with each other. DG Comp will, in particular, consult the other Directorate Generals if the Appeal procedure telecommunications, media or data protection sector is involved, before 29 How can decisions of the regulators be challenged and on adopting a decision in a competition law case. DG Comp and DG Connect what bases? cooperate, in particular, in developing specific policies that may have an impact on competition law in the telecommunications or media sectors. Any EU member state, the European Parliament or Council can appeal There are several other competent EU bodies and committees decisions of the Commission to the General Court of the European Union within the field of communications and media at the EU level, including on points of law or fact, article 263, paragraphs 1 and 2 of the Treaty in particular the following: on the Functioning of the European Union (TFEU). A further appeal on • the Body of European Regulators for Electronic Communications: points of law can be made to the Court of Justice of the European Union. comprising the heads of the national regulatory authorities Natural or legal persons are only entitled to challenge a decision of the within the European Union and responsible for the promotion of Commission if such decision is either addressed to that person or of greater coordination and coherence between the national authori- direct and individual concern to that person, article 263, paragraph 4 of ties regarding the establishment and regulation of the electronic the TFEU. Natural or legal persons are also entitled to challenge an EU communications market within the European Union; regulatory act, in the case such act is of direct concern to them and does • the Communications Committee: comprising representatives of not require its transposition into national law by the EU member states. the EU member states and responsible for the provision of opin- Concerning decisions of the national regulatory authorities, EU law ions on draft measures of the Commission, in particular regarding obliges the EU member states to provide effective appeal mechanisms the regulation of roaming and notification obligations for personal to challenge such decisions under their jurisdictions. According to AVMS data breaches; Directive 2.0, however, any such appeal shall normally not suspend the • the Radio Spectrum Committee: comprising EU member-state enforceability of the contested regulatory decision; such effect shall representatives and responsible for the harmonisation of the only be granted if the plaintiff also seeks interim measures according to use of radio spectrum at the EU level, in particular, advice on the applicable national laws. specific technical measures required to implement the EU Radio Spectrum Policy; • the European Network and Information Security Agency: assists the Commission and the EU member states in meeting the requirements of network and information security;

42 Telecoms & Media 2021 © Law Business Research 2021 Simmons & Simmons LLP European Union

Competition law developments Lately, the draft criteria that trigger an automatic notification to Brussels 30 Describe the main competition law trends and key merger and have been tightened, although the Commission will still have the power antitrust decisions in the communications and media sectors in to call in deals below them. It remains to be seen which industry will your jurisdiction over the past year. become the focus of these new powers once introduced. Further, the Commission announced a change of policy regarding the application One of the main trends in EU law is the proposal and introduction of of article 22 of the EU Merger Regulation in March 2021. Acquisitions, different regulatory tools to address and regulate big tech and the func- notably in the TMT, healthcare and life sciences sectors, that do not tioning of the Single Market in the digital sector. meet the EU or EU member states’ national thresholds can be reviewed Regulation (EU) 2019/1150 on promoting fairness and transparency by the Commission following referral requests from EU member states. for business users of online intermediation services concerns online plat- This is particularly directed at killer acquisitions in the tech space. forms like Google, Airbnb or Amazon, which have gained major importance These plans and new guidance on the existing tool will mean that M&A for the market. Their position of strength as gatekeepers, particularly transactions may become subjected to closer scrutiny. concerning commercial users, triggered many questions regarding the applicable legal framework and the need for further regulatory oversight. Internet of things sector inquiry The Regulation establishes rules, for example, transparency require- In July 2020, the Commission launched a sector inquiry into the sector ments for terms and conditions and limits on commercial terms including: of the internet of things for consumer-related products and services in • best-price clauses for online intermediation services; the European Union. The sector inquiry focuses on consumer-related • electronic measures blocking or restricting the access of final products and services that are connected to a network and can be customers to online offers of goods or services based on the controlled at a distance, which includes smart home appliances and nationality; wearable devices. The Commission aims to gather market informa- • customer residence or place of establishment; and tion to better understand the nature, prevalence and effects of these • indirect restrictions on cross-border online trade, including discrimi- potential competition issues. Any results are expected to inform future natory use of general terms and conditions (including prices, enforcement of competition law in this sector. The final report is not conditions and acceptance-of-payment methods). expected before 2022.

The Regulation covers audiovisual copyright content but generally Antitrust decisions excludes audiovisual content such as e-books, online music, software A big part of the ongoing case still relates to the Google saga. In 2017, and videogames. the Commission imposed a fine of €2.42 billion on Google for abusing Further, Regulation (EU) 2017/1128 was adopted to enable its dominant position in general internet search, thereby stifling compe- subscribers to use their audiovisual content services subscriptions tition in comparison shopping markets. The Commission has objected outside their home member state when travelling in the European Union. that Google abused its market-dominant position as a search engine Regulation (EU) 2018/302 regarding unjustified geo-blocking to promote its own comparison-shopping service in search results entered into force on 3 December 2018 is aimed at addressing issues of and giving it an illegal advantage while demoting those of rivals. This customers not being able to buy goods and services from traders located was found not to be competitive on the merits and is illegal under EU in a different EU member state, even with the same conditions as locals antitrust rules. Further, the Commission fined Google €4.34 billion for due to their nationality, place of residence or place of establishment. conduct relating to the Android operating system. The Commission chal- Regulation (EU) 2018/302 on addressing unjustified geo-blocking and lenged that Google required manufacturers to: other forms of discrimination (Geo-Blocking Regulation) is part of a wider • pre-install the Google Search app and Chrome browser app, as a set of measures aimed at boosting e-commerce in the Single Market. The condition for licensing Google’s app store (the Play Store); Geo-Blocking Regulation also supplements existing competition-law tools. • made payments to large manufacturers and mobile network oper- In December 2020, the Commission introduced proposals for the ators on condition that they exclusively pre-installed the Google Digital Markets Act to introduce rules for platforms that act as gate- Search app on their devices; and keepers. The Digital Markets Act aims to prevent gatekeepers from • prevented manufacturers wishing to pre-install Google apps from imposing unfair conditions and ensure the openness of important digital selling devices using alternative versions of Android that were not services. The Digital Markets Act focuses on certain large companies approved by Google (Android forks). and is intended to create ex-ante regulation to complement the powers of intervention under the EU competition rules. Therefore, gatekeepers The Commission found that the challenged behaviours formed part of will be subject to certain obligations such as giving users the possibility an overall strategy by Google to reinforce its dominance in a general to opt-out from having their data that was collected across different internet search. services from being combined or prevented from prohibiting business In 2019, the Commission closed the investigation into Google users to offer better prices or conditions via other channels. All gate- AdSense and imposed a fine of €1.49 billion. The Commission found that: keepers must also inform the Commission of any acquisitions they make. Also, the Commission published plans to extend its review powers of Google used agreements contracts to capture the market for transactions which applies in all sectors but also the technology, media serving search ads on the websites of newspapers and other and telecom (TMT) field. The European Union published plans to intro- sites and preventing realistic chances of entry and expansion by duce new powers to scrutinise foreign subsidies and to level the EU competing providers. playing field by eliminating distortions caused by foreign subsidies. The proposal has three main tools: The Commission was concerned with ‘exclusivity’ as an obstacle for • mechanisms to call in and veto mergers and acquisitions (M&A) deals; rivals compared to just rebates. • review of public-procurement bids where foreign subsidies are On 30 January 2020, the Commission fined several companies in play; and belonging to Comcast Corporation, including NBCUniversal LLC, about • a discretionary power to investigate concerns on the market. €14 million for restricting the ability of traders to sell licensed merchan- dise for movies within the European Economic Area to territories and www.lexology.com/gtdt 43 © Law Business Research 2021 European Union Simmons & Simmons LLP

customers other than those specifically allocated to them. The decision concerns practices that aim to limit cross-border sales that the Commission identified as an issue in the e-commerce sector inquiry. Similarly, fines were imposed against Nike and Sanrio in March and July 2019, that also used territorial restrictions in their licence and sale agreements. The Commission opened a formal investigation against Broadcom in June 2019. The investigation concerns various issues including practices such as exclusivity dealings, tying, bundling, interoperability Anne Baudequin [email protected] degradation and abusive use of intellectual property rights. In the course of the proceedings, the Commission used its powers to impose interim Christopher Götz measures and ordered Broadcom to stop applying exclusivity terms and [email protected] to withhold discounts and other advantages given to six customers that Martin Gramsch sourced almost all of their needs with the US chipmaker. The investiga- [email protected] tion ended with a commitment decision. Broadcom agreed to suspend all existing agreements containing exclusivity or quasi-exclusivity Lehel Carré, Thierschplatz 6 arrangements or leveraging provisions concerning Systems-on-a-Chip Munich for televisioin set-top boxes and internet modems. 80538 In January 2021, the Commission fined game developer Valve (of Germany the Steam gaming platform) and five publishers (Bandai Namco, Capcom, Tel: +49 89 20 80 77 63 00 Focus Home, Koch Media and ZeniMax) €7.8 million for breaching EU Fax: +49 89 20 80 77 63 01 antitrust rules and restricting cross-border sales of certain PC video games based on the geographical location of users within the European 5 boulevard de la Madeleine Economic Area (ie, geo-blocking practices). Paris 75001 Merger decisions France On 6 March 2020, the Commission approved the acquisition of joint Tel +33 1 53 29 16 29 Fax: +33 1 53 29 16 30 control over INWIT by Telecom Italia and Vodafone with commitments. The Commission’s concerns included that the merger would reduce www.simmons-simmons.com competition in the market for renting space on towers to telecommunication operators, thereby foreclosing telecommunication operators from the market. The commitments offered to address these concerns comprised, inter alia, that INWIT will provide free space on towers for One of the Commission’s concern was the (vertical) relationship third parties to use and give appropriate publicity to the towers made between Fitbit’s activities in the upstream market for fitness trackers available. This proceeding highlights the access to infrastructure by and Google’s activities in the downstream market for the provision of third parties as one of the Commission’s main concerns that should be digital healthcare services. The Commission was particularly worried addressed through commitments. about the anticompetitive effects that the transaction could have on The Commission also dealt with various joint venture cases start-ups and on small- and medium-sized enterprises that currently concerning streaming services. In Liberty Global and DPG Media, the rely on access to Fitbit’s data to offer their services. The Commission Commission cleared the transaction and found that effective competi- accepted a commitment from Google to continue to provide third tion is unlikely to be hindered as the joint venture, Liberty Global and parties access to Fitbit’s data, but also insisted that the commitments DPG Media will exercise their content acquisition activities separately be long term – 10 years – and cover users outside the European as follows: Economic Area. • the joint venture will not include linear channels and ancillary services linked to linear broadcasting; and Coronavirus • several strong alternative streaming players will remain in 31 What emergency legislation, relief programmes and other the market. initiatives specific to your practice area has your state implemented to address the pandemic? Have any existing On 17 December 2020, the Commission conditionally cleared the Google government programmes, laws or regulations been amended and Fitbit transaction. The Commission reviewed various concerns to address these concerns? What best practices are advisable such as the transaction’s potential impact on digital advertising, the for clients? ability of other devices to interoperate with Android smartphones and the continued access of third-party services to Fitbit users’ health and At the beginning of the covid-19 crisis, the Commission adopted the wellness data. Of particular note was the Commission’s analysis of the Temporary Framework for State Aid Measures to Support the Economy nascent digital healthcare market and the role of data. The Commission in the Current COVID-19 Outbreak (Temporary Framework) to support identified four (potentially) relevant data-related activities in the digital the economy and to avoid the negative economic consequences as much healthcare sector: as possible. The Temporary Framework provides guidance on how the • cloud and data analytics services; Commission intended to apply article 107(3)(b) of the TFEU when faced • patient monitoring services; with requests to approve covid-19-related state-aid measures. Since • the provision of data for medical research and real-world March 2020, the Temporary Framework was amended several times evidence; and to address various issues and the Commission decided to prolong its • corporate wellness programmes. application until the end of 2021. Simply, the Temporary Framework enables member states to:

44 Telecoms & Media 2021 © Law Business Research 2021 Simmons & Simmons LLP European Union

• set up schemes to direct grants, tax advantages and advance payments to a company up to €1.8 million; • give subsidised state guarantees on bank loans; and • enable public and private loans with subsidised interest rates.

On 21 December 2020, the Commission published several state-aid guiding templates covering several types of investments projects in line with the EU flagships to assist EU member states in the design of their national recovery plans in line with EU state-aid rules. Specific relief programmes were set up by the EU member states in line with the Commission’s guidelines. Eligibility for relief and access to such programmes depends on the programmes of the individual EU member states.

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Dina Th Kouvelou, Nikos Th Nikolinakos and Alexis N Spyropoulos Nikolinakos & Partners Law Firm

COMMUNICATIONS POLICY • Law No. 3471/2006 on data processing and privacy in the electronic communications sector and decisions of the HDPA: and Regulatory and institutional structure • Law No. 4002/2011 on games of chance. 1 Summarise the regulatory framework for the communications sector. Do any foreign ownership restrictions apply to The new European Electronic Communications Code (Directive (EU) communications services? 2018/1972) was transposed into national legislation in September 2020 through Law No. 4727/2020. The decision-making procedure in Greece is divided and fragmented. In Law No. 4727/2020: The basic framework is set out in the acts that are enacted by the • the definition of ‘electronic communications service’ has been Hellenic Parliament. There is, however, an enormous quantity of expanded to include any interpersonal communications services secondary legislation that involves decisions that must be taken jointly provided over the internet, including Voice over Internet Protocol by different ministers and three independent authorities. services, messaging apps and email services that do not use tele- The Ministry with the most direct involvement and key role phone numbers: and in the telecoms and media fields is the Ministry of Digital Policy, • number-based interpersonal communications services (inter- Telecommunications and Information. personal communications services which connect with publicly However, the major responsibilities in these sectors are under- assigned numbering resources, namely, a number or numbers in taken by regulatory agencies that are independent administrative national or international numbering plans, or that enable commu- authorities, with full independence from network operators and service nication with a number or numbers in national or international providers. The agencies that regulate the communications and media numbering plans) is subject to a general authorisation. sectors are the following: • the National Commission for Telecommunications and Post (EETT): In the media sector, the liberalisation of the market in Greece and the the national regulatory authority that supervises and regulates the transition from the state-controlled radio and television to the regime of electronic communications and postal services market. It is also radio and television operated by privately owned companies has been responsible for the application of competition law in the electronic the result of a de facto development in the market that occurred before communications sector and the postal services sector; the appropriate legal framework. An immediate effect of this is that the • the National Council of Radio and Television (ESR): an independent market developed in an unregulated way. Few of the free-to-air televi- administrative authority that supervises and regulates the radio sion stations still operate with a temporary licence, and the majority of and television market. The existing regime is drawn along the the free-to-air radio and television stations operate legally under certain lines that content is regulated by the ESR and infrastructure and temporary provisions, in a very muddy legal environment. In October frequencies by the EETT; 2015, Law No. 4339/2015 entered into force, introducing the provisions • the Competition Commission: which is responsible for the applica- on the authorisation of digital terrestrial television broadcasting content tion of competition law in all sectors, excluding the telecoms sector providers. It specifies the extent of the investment, financial reliability, under the EETT’s field of competence; experience and existing position in the market to avoid concentration, as • the ADAE (the Hellenic Authority for the Assurance of well as the kind of programmes that will be transmitted. Communications Security and Privacy): an independent authority According to the applicable legislation (Law No. 3592/2007), responsible for the protection of security and privacy of commu- controlling more than one licence holder in the television or radio sector nications; and is prohibited. Everyone is allowed to participate in more than one licence • the Hellenic Data Protection Authority (HDPA): an independent holder in television or radio to the extent that he or she does not control authority responsible for the protection of personal data in more than one (a person has control over a licence holder if they can all sectors. substantially influence the decision-making process or has the power to appoint at least one member of the board of directors or an admin- The main legal framework determining the obligations of electronic istrator in another operator). Foreign investors have the opportunity to communication network (ECN) or electronic communication service participate in broadcasting activities in Greece, subject to the gener- (ECS) providers consists of: ally applicable restrictions. The concentration of media is prohibited. • Law No. 4070/2012; Concentration in media is considered to exist if an undertaking acquires • Law No. 4727/2020 and secondary regulatory decisions issued a dominant position that is defined in Law No. 3592/2007, which also by the EETT; provides for the complementary application of Competition Law No. • Law No. 4463/2017 on the transposition of cost-reduction Directive 3959/2011. The Competition Commission is the competent authority to 2014/61/EU decisions of ADAE; consider competition law issues in the media sector, including issues of

46 Telecoms & Media 2021 © Law Business Research 2021 Nikolinakos & Partners Law Firm Greece concentration. Market share is calculated based on income from adver- Any natural or legal person can apply for rights of use, which will tising and exploitation of programmes or provision of other similar be processed within three weeks from the application for a right of use services during the previous year. of numbers or six weeks for numbers with significant economic impor- Nevertheless, Law No. 4339/2015 (as amended by Law No. tance; applications for rights of use of frequencies will be processed 4487/2017) sets the following restrictions on shareholders holding within six weeks if there is no limitation of the number thereof or up to more than 1 per cent of the board members and legal representatives eight months from the application if such a limitation is imposed. of entities that participate in tenders for digital terrestrial television Except for free spectrum bands, for all wireless services, an content providers: individual right to use frequencies is required and is granted by the • non-convictions by irrevocable court decision for specific competent authorities upon a relevant request. Only if the spectrum crimes; and available is not enough to cater for existing demand from existing or • non-participation in any manner in companies researching the new competitors will a limitation on the number of individual licences radio or television market and advertising companies, as well as in be effected. This will be the result of a public consultation that the EETT companies conducting telemarketing. must prepare following a ministerial decision to that effect. If, as a result of that consultation, the number of individual rights has to be limited, The law also refers to the general prohibition from participating in the EETT must decide how this limited number of individual rights will companies that execute public contracts and require licence appli- be granted. Any kind of tender can be held under the principles of trans- cants to submit evidence proving how the applicant acquired the parency, etc, that are set by Greek law under EU directives. In practice, financial means used or intended to be used for the operation of the in cases of a limited number of rights of use of frequencies, the EETT content provider. usually awards them through auctions. Telecoms and audio-visual media distribution sectors are open to Licensing for terrestrial pay TV and free-to-air television is carried foreign investment including concerning the supply of telecoms equip- out based on a tender or auction. Law No. 4339/2015, as in force, ment. Both electronic communications and media sectors are open to defines the process and key conditions for awarding licences to digital foreign investment, subject to generally applicable restrictions. Also, terrestrial television content providers. It specifies the extent of the no restrictions apply in the supply of telecoms equipment from foreign investment, financial reliability, experience and existing position in the companies. market to avoid concentration, as well as the kind of programmes that Finally, except for online gambling, e-commerce and data protec- will be transmitted. tion legislation, there is no other internet-specific legislation. General In July 2017, the ESR issued a decision defining that the number of provisions of the law are applicable, along with certain guidelines or television licences to be awarded through the tender will be seven. In ad hoc decisions of the Greek Data Protection Act that are used as 2018, the ESR awarded five out of the seven available free-to-air national guidelines for the interpretation of such general provisions on specific terrestrial digital television licences, while in 2019 it awarded one more. electronic communications services. Regarding Digital Audio Broadcasting (DAB), in January 2018, The general EU framework provisions on radio and television following the issuing of Ministerial Decision Nos. 169-171/2018, an content apply to Greece, meaning that the programme must adhere to auction was launched by the EETT for the awarding of rights to use radio the general principles of the Greek Constitution and there are further frequencies of terrestrial DAB of national and regional coverage, with obligations concerning minors, rating of programmes, advertising, the procedure of sealed tenders in which each tenderer pays the price pluralism and non-discrimination, etc. The current EU Audiovisual offered. Through this process, a National Coverage Radio Frequency Media Services Directive, Directive 2010/13/EU (the AMS Directive), as Use Right would be granted for the DAB+ multiplex channels described amended in 2018 by Directive (EU) 2018/1808 and transposed in Greece in the relevant tender document and several Regional Radio Frequency by Law No. 4779/2021, governs EU-wide coordination of national legis- Use Rights for the award areas specified in the same tender document. lation on all audiovisual media, both traditional television broadcasts The auction received two applications for awards, which were both and on-demand services. found non-eligible by the EETT in May 2018. Analogue radio FM stations in Greece still operate under a temporary licensing regime. Authorisation/licensing regime As far as licences for antennas and base stations are concerned, 2 Describe the authorisation or licensing regime. the relevant framework was reviewed in 2019 with Law No. 4635/2019 (articles 20 to 38) and new EETT Regulation No. 919/26/2019 on Any natural or legal person can apply to acquire a general authorisa- the licencing of antennas and base stations. According to Law No. tion to provide electronic communications services or networks, which 4635/2019, the EETT’s issuance of antenna construction licences is is processed at once. To obtain a general authorisation, the requesting carried out through the Antenna Electronic Application System (SILYA), entity needs to submit a Registration Declaration to the EETT, along as per the previous legislative framework, but without any require- with the relevant supporting documents. This Registration Declaration ment for planning permission to be granted. The planning approval is must be submitted solely through the Online Application System for issued following the EETT’s antenna construction permit, through the Electronic Communications Services Providers. When submitting the e-Licensing electronic system already used for buildings and intended application, the person concerned must electronically send to the EETT to automatically interoperate with the SILYA at the request of an author- all required supporting documents attached to the statement. To access ised engineer and followed by a building inspection. The new law the Online Application System for Electronic Communication Providers, greatly simplifies the process of modifying antenna constructions, while the applicant must submit an ‘administrator’s statement’. The person a recent joint ministerial decision also exempts low electromagnetic providing this statement may perform the specific electronic communi- environmental nuisance antenna facilities from the licensing process, cations activity described in the Registration Declaration, immediately resulting in a significant number of antennas, mainly within urban upon filing a complete Registration Declaration. For the Declaration to centres, now requiring a simple registration procedure, also imple- be deemed complete, relevant administrative fees must be paid. The mented through the SILYA. requesting operator is included in the Registry of Authorised Operators The duration of general authorisations is indefinite. The duration and may obtain a relevant certificate by the EETT upon request within of rights of use of frequencies is defined in the relevant EETT decisions, seven days of receipt of such request. awarding the rights of use. www.lexology.com/gtdt 47 © Law Business Research 2021 Greece Nikolinakos & Partners Law Firm

Fees imposed on operators with a general authorisation are paid • wholesale central access provided at a fixed location for mass- on an annual basis and correspond to the costs of management, moni- market products; and toring and compliance with the General Authorisation Regime and to • wholesale high-quality access provided at a fixed location (trunk the rights to use radio frequencies or numbers it derives from a formula and terminating segments of leased lines). included in the EETT Decision on General Authorisations. The main factors taken into account for the calculation of the fees are the total All fixed network operators have been designated as having SMP in turnover from electronic communications networks or services minus the markets for termination to individual fixed networks and all (three) the wholesale interconnection and roaming costs paid to other opera- mobile network operators have been designated as having SMP in the tors. The fees are equal to a percentage that varies depending on the net markets for termination to individual mobile networks. revenues, calculated as described above. The ex-ante regulatory obligations for transparency, price controls, Fees for use of numbers are defined for each series of numbers in a cost accounting separation, access to and use of specific network facili- decision of the EETT on the allocation of numbering resources. ties and non-discrimination have been imposed on SMP operators in the Fees for rights of use of spectrum are imposed by EETT decision above markets (with a few exceptions in specific markets). and are usually paid on an annual basis, except for rights of use of In the context of regulation of fixed wholesale local access market, frequencies that are granted through competitive procedures, such as prices for local-loop unbundling access, virtual access products and auctions, in which case the EETT only defines the minimum bid, and the ancillary facilities such as co-location are regulated based on cost-orien- final fees result from the auction procedure. tation. Further, the EETT imposed an obligation on the OTE to provide All telecoms operators are obliged to have registered themselves access for the deployment of Next Generation Access (NGA) Networks under the general authorisation regime and be granted individual rights based on VDSL Vectoring infrastructure and services by other operators to use frequencies or numbers and the appropriate licences for every (or based on other NGA technology) through a process managed by the antenna they use. Apart from that, there is no other substantial differ- EETT for the assignment of local sites to operators. Wholesale price ence concerning the regulation of fixed, mobile and satellite services. is cost-oriented and defined by the EETT through a bottom-up LRIC+ There is no exclusivity granted to any operator in any sector. model. For that purpose, in 2020, the EETT developed a bottom-up LRIC+ However, there are a limited number of licences concerning mobile model and defined new wholesale cost-oriented prices. and fixed wireless access networks and digital television networks. On the third round of market analysis of 2020, the OTE was found According to the relevant legislation, the EETT proceeds to a public to hold SMP in the market for: consultation that leads to a proposal by the EETT to the Minister of • terminating segments of leased lines; and Digital Policy concerning how licences will be granted, the cost, the • trunk segments of leased lines, which has also led to cost duration of the entitlement, etc. regulation.

Flexibility in spectrum use Wholesale price is cost-oriented and defined by the EETT through a 3 Do spectrum licences generally specify the permitted use bottom-up LRIC+ model. Until the development of the bottom-up model or is permitted use (fully or partly) unrestricted? Is licensed in 2020, the EETT defined temporary wholesale price using the retail spectrum tradable or assignable? minus methodology. According to EETT Decision No. 968/1/2020 on the analysis of Spectrum licences and applicable secondary legislation specify the termination market to individual fixed networks, fixed termination rates permitted use and the technical characteristics of equipment that will be retained at 0,0545 cents per minute until the entry into force may be used, to the extent that specifications are required, taking into of the European Commission’s delegated act setting single maximum account the principle of proportionality and technological neutrality. The EU-wide voice termination rates. law allows for spectrum trading under specific conditions. To transfer, lease or make any change in the control of the rights holder, an applica- Additional issues regarding telecoms regulation (fixed tion must be filed to the EETT that considers the relevant application infrastructure) and decides based on specific criteria defined by law. In practice, there are no cable networks in Greece. In December 2020, Radio Frequency Rights for terrestrial systems In the cases of interconnection disputes, the EETT can intervene capable of providing wireless broadband electronic communications through the standard dispute resolution procedure, provided for by the services in the 700MHz, 2GHz, 3400–3800MHz and 26GHz bands, Law on Electronic Communications. Prices of wholesale interconnection were granted through an auction, and they have been pointed out as services that are regulated are defined based on cost orientation. pioneering frequency bands to be used for the introduction and development of 5G networks in the European Union. Additional issues regarding telecoms regulation (mobile) A general obligation to provide access to mobile virtual network oper- Ex-ante regulatory obligations ator (MVNO) operators is imposed on mobile network operators (MNOs) 4 Which communications markets and segments are subject to through a relevant provision included in the rights of use of frequen- ex-ante regulation? What remedies may be imposed? cies. However, this obligation does not specify the pricing or non-pricing terms of access provision. In April 2020, the EETT decided the deregulation of the retail leased The provisions of the EU Roaming Regulation have been fully lines with a capacity up to 2Mbps, the only retail market that was still implemented as of 15 June 2017. subject to ex-ante regulation, while in December 2020, the EETT decided the deregulation of the fixed origination market. Additional issues regarding internet services (including voice The incumbent Greek legacy operator, OTE, has also been desig- over the internet) nated a significant market power (SMP) operator in the following Except for radio and television legislation, online gambling legisla- wholesale markets: tion, the provisions of the Greek presidential decree implementing • termination of individual fixed networks; e-commerce and the data protection legislation, which includes specific • wholesale local access provided at a fixed location; provisions on internet services, there is no specific national regulation.

48 Telecoms & Media 2021 © Law Business Research 2021 Nikolinakos & Partners Law Firm Greece

The general provisions of law and relevant EU framework, recom- SMP in specific markets and has indeed been imposed on the incumbent mendations, opinions and self-regulation instruments also affect the in the markets where it has been found to hold an SMP position, as well provision of internet services. as MNOs in the mobile termination markets. There are no specific limits on an internet service provider’s freedom to control or prioritise the type or source of data that it delivers. The EU Universal service obligations and financing legislation on Open Internet Access, namely Regulation (EU) 2015/2120 6 Outline any universal service obligations. How is provision of is fully implemented. The Regulation prohibits operators from blocking, these services financed? slowing down or prioritising traffic. Traffic management measures are authorised if they are reasonable, meaning that the measures shall be The universal service obligations apply to the following services: transparent, non-discriminatory and proportionate and based on objec- • adequate broadband internet access service; and tively technical differences of traffic (article 3(3)). Such measures cannot • voice communications services, including the underlying connec- monitor specific content and cannot be maintained longer than neces- tion, at a fixed location. sary. The EETT issued the Decision on National Open Regulation Issues – implementing of Regulation (EU) 2015/2120 in 2018. According to the decision on cost allocation, the cost is undertaken by all operators authorised under the general authorisation regime (including Additional issues regarding access and securing or enforcing the incumbent), by a proportion depending on their total revenues rights to public and private land to install telecommunications deriving from the provision of electronic communications networks or infrastructure services, provided that their turnover exceeds €15 million. Law No. 4463/2017 implemented EU cost reduction Directive 2014/61/ The designated Universal Service Provider, OTE SA, has already EU. Until the operation of the Information System, which will support the applied for compensation concerning the net cost of the Universal one-stop procedure for the granting of the rights of way, the procedure Service Obligation for the years 2012 to 2016. In April 2021, the EETT of article 11 of Annex X of Law No. 4070/2012, as amended by Law No. issued its decision for the net cost of universal service for the years 2012 4463/2017, applies. to 2016, which stipulates that the net cost amounts to €12,691,504 for In July 2018, the EETT conducted a public consultation on the modi- 2012, €7,289,044 for 2013, €6,018,574 for 2014, €6,639,429 for 2015 and fication of EETT Regulation No. 528/075/2009 for the determination of €4,166,869 for 2016. fees for rights of way, rights of use of rights of ways and the number of guarantees of good performance of rights of ways operations for Greece Number allocation and portability to simplify the relevant procedures. Additionally, in August 2018, the EETT 7 Describe the number allocation scheme and number portability issued its new Regulation on Collocation and the common use of facilities. regime in your jurisdiction.

Structural or functional separation Number allocation includes primary and secondary allocation. Numbers 5 Is there a legal basis for requiring structural or functional are primarily allocated by the EETT by awarding ‘rights of use of numbers’ separation between an operator’s network and service following application of the providers that have obtained a general activities? Has structural or functional separation been authorisation covering services that justify the use of the requested introduced or is it being contemplated? number range. Providers may proceed to secondary allocation to users. No third-level allocation is permitted (allocation from one user to There is an obligation to keep separate accounts or structural separa- another). The decision on the allocation of numbers is issued within three tion for entities providing public electronic communications networks or weeks from the date of submission of a complete application. The fees publicly available electronic communications services that have special for allocation and use of numbering resources (for the first year) must or exclusive rights for the provision of services in other sectors in the be paid within 15 days from the submission of the application. In case of Greek state or another Member State and their annual turnover is over rejection of the application, the allocation and usage fees are reimbursed €50 million in activities associated with electronic communications to the applicant. The allocation is valid until the due date of payment of networks or services. the annual usage fees of the coming year and is renewed upon payment Voluntary separation by a vertically integrated operator that has of the annual fees every year. been designated as having SMP in one or several relevant markets was Number portability applies to fixed and mobile numbers and the introduced by Law No. 4727/2020. Operators shall inform the EETT at following special categories of numbers: least three months before any intended transfer of their local access • corporate and VPN access numbers (50); network assets or a substantial part thereof to a separate legal entity • personal numbers (70); under different ownership, or an establishment of a separate business • freephone numbers (800); entity, to provide all retail providers, including their own retail divi- • shared cost (801); sions, with fully equivalent access products. Such operators may also • numbers for services with maximum charge (806, 812, 825, offer commitments regarding access conditions that are to apply to their 850 and 875); network during an implementation period after the proposed form of • numbers used for calling cards services (807); separation is implemented, to ensure effective and non-discriminatory • numbers for access to data services (896 and 899); and access by third parties. the EETT shall assess the effect of the intended • premium charge numbers (90). transaction, together with the commitments offered, where applicable, on existing regulatory obligations under Law No. 4727/2020. Portability requests are addressed to the recipient provider, which According to Law No. 4727/2020, functional separation is included communicates the request through the national portability database to between the remedies that may be imposed by the regulator to SMP the donor-operator. operators, under the conditions stipulated in law, which are under the Portability for both fixed and mobile numbers must be completed relevant EU directive. However, in practice, the issue has not been raised within one working day from the date of acceptance of the portability by the EETT and no relevant consultation has been undertaken. Apart request from the donor operator. However, for fixed numbers, when from that, accounting separation could be imposed on operators with the portability request is submitted jointly with a local-loop unbundling www.lexology.com/gtdt 49 © Law Business Research 2021 Greece Nikolinakos & Partners Law Firm

transfer request, the numbers are ported on the date of transfer and Additionally, in the field control of commercial practices (regarding zero activation of the local loop, which technically extends the deadline for rating and subsidised access), services or information for the purposes fixed numbers. of subscriber support, as well as applications for speed measurement The EETT’s new rules on both fixed and mobile numbers’ portability in cell phones is acceptable, whereas the following are not permitted: entered into force in June 2018, intending to resolve inadequacies of the • provider pages that include the promotion of products and services; former framework. Under the new arrangements, a subscriber has the • services (eg, music, videos and e-books) favouring the content of right to withdraw without charge and in case of a contract either remotely the provider itself against third-party content providers; and (via telephone, the internet or fax) or out of the shop (for example, through • discrimination after exceeding the data cap. a representative of the company at the subscriber’s site) without explanation. Therefore, it can cancel the number portability application that it has Platform regulation submitted. Those options apply for a period of 14 calendar days from the 10 Is there specific legislation or regulation in place, and have conclusion of the contract. More specifically, under the new framework: there been any enforcement initiatives relating to digital • the request for portability is forwarded to the actual operator after platforms? 14 days when the implementation process starts; • if the subscriber wishes the request to be processed earlier than 14 There is no national legislation or regulation specifically addressing days, he or she must make a declaration to the new company. The digital platforms (except for video-sharing platforms that are regu- company has the right either not to accept the request or to ask the lated in Law No. 4779/2021 under the AMS Directive. Nevertheless, subscriber a written statement that he or she then accepts to lose Regulation (EU) 2019/1150 on promoting fairness and transparency for the right of withdrawal. In this case, the subscriber has the option to business users of online intermediation services is directly applicable to apply for cancellation of portability until the service reaches a new national legislation and must be applied by 17 July 2020. The Regulation company and if the 14-day deadline has not passed; and sets out rules to ensure that business users of online intermediation • to cancel portability, the subscriber must send a request only to the services and corporate website users concerning online search engines company to which he or she has submitted the portability request are granted appropriate transparency, fairness and effective redress and by one of the means of communication available to him or her possibilities. It applies to online intermediation services and online for this purpose. search engines provided, or offered to be provided, to business users and corporate website users, respectively, that have their place of Customer terms and conditions establishment or residence in the European Union and that, through 8 Are customer terms and conditions in the communications those online intermediation services or online search engines, offer sector subject to specific rules? goods or services to consumers located in the European Union, irrespective of the place of establishment or residence of the providers of Customer terms and conditions for the provision of electronic commu- those services and irrespective of the law otherwise applicable. The nications networks and services are subject both to general consumer European Commission encourages the drawing up of codes of conduct protection legislation and to sector-specific regulation and particularly by providers of online intermediation services and by organisations and to the General Authorisation Regulation of the EETT, which defines the associations representing them, together with business users, including minimum content of such terms and conditions. small and medium-sized enterprises (SMEs) and their representative As of January 2019, the EETT’s General Authorisation Regulation organisations, that are intended to contribute to the proper application introduces obligations for: of this Regulation, taking account of the specific features of the various • automatic service interruption to avoid overcharging; sectors in which online intermediation services are provided, as well as • maximum termination rate for early termination of a fixed-term of the specific characteristics of SMEs. contract; and • seamless access of customers to conventional terms and pricelists. Next-Generation-Access (NGA) networks 11 Are there specific regulatory obligations applicable to Net neutrality NGA networks? Is there a government financial scheme to 9 Are there limits on an internet service provider’s freedom to promote basic broadband or NGA broadband penetration? control or prioritise the type or source of data that it delivers? Are there any other specific regulations or guidelines on net In the fourth round of market analysis referring to the market for neutrality? wholesale fixed local access, the EETT found once more that the fixed incumbent OTE holds an SMP position in these markets and imposed There are no relevant specific limits. The EU legislation is fully additional obligations related to the deployment of NGA networks implemented. through VDSL Vectoring. These obligations include the provision of EETT Decision No. 876/7b/ 2018 introducing an open internet information on the incumbent’s local access network for the purpose of regulation that establishes measures for the purchase of internet assignment of specific local sites to other operators with the obligation access services, under the relevant EU regulation, Regulation (EU) to deploy VDSL Vectoring infrastructure following an allocation process 2015/2120, was issued in December 2018. The regulation was amended managed by the EETT. The operators that are assigned specific areas in 2019 and 2020. (local sites) also undertake obligations related to the terms of provision It addresses issues such as: of services at the wholesale level. • speed definitions; In the context of regulation of fixed wholesale local access market • a methodological framework for speed assessment; prices for virtual access, NGA products are regulated based on cost • user information; orientation. Wholesale price is cost-oriented and defined by the EETT • the definition of continuous or repeated deviation; through a bottom-up LRIC+ model. For that purpose, in 2020 the EETT • the definition of significant deviation; and developed a bottom-up LRIC+ model and defined new wholesale cost- • control of subscriber’s complaints. oriented prices.

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Data protection • notify the National Cybersecurity Authority and the Hellenic Data 12 Is there a specific data protection regime applicable to the Protection Authority of incidents with a serious impact on business communications sector? continuity. The notification must be made without undue delay and be accompanied by additional information to the Authority In addition to the general provisions on data protection, special regarding the severity of the relevant incident; and provisions have been imposed by law concerning data protection in • cooperate with the competent authorities. communications. The DPA is responsible for monitoring the implementation of relevant legislation. Big data Further, the Greek Constitution provides for an independent ADAE, 14 Is there specific legislation or regulation in place, and have which is responsible solely for the communications sector and has there been any enforcement initiatives in your jurisdiction, issued relevant secondary legislation (the Regulations). The ADAE sets addressing the legal challenges raised by big data? the rules that must be followed by all telecommunications operators and service providers in safeguarding secrecy in telecommunications, No legislation or regulation specifically addresses the legal chal- being a constitutionally protected right. lenges raised by big data. Businesses planning to run big data projects The Greek data protection regime is primarily set out in the General processing personal data in Greece need to consider the GDPR and Law Data Protection Regulation (EU) 2016/679 (General Data Protection No. 4624/2019. Regarding the use of non-personal data, businesses Regulation) (GDPR) and Law No. 4624/2019 on the Protection of should take note of Regulation No. 2018/1807 on the free movement Personal Data, incorporating the GDPR and Directive (EU) 2016/680. of non-personal data, which entered into force on 28 May 2019 and is Moreover, while the e-Privacy Law (Law No. 3471/2006) applies mainly applicable in Greece. to the electronic communications sector, certain provisions are not sector-specific, such as the provisions on unsolicited communications. Data localisation 15 Are there any laws or regulations that require data to be Specific issues stored locally in the jurisdiction? Interception and data protection Specific regulation requires operators to assist the government to Law No. 3917/2011 imposes on operators an obligation to store in lawfully intercept telecommunications messages after the intervention Greece all data retained in compliance with the data retention obligation of the public prosecutor when a major crime is being investigated and for 12 months. The initial wording of the law in 2011 required retained under the supervision of the ADAE. data to be ‘generated and stored’ in Greece. This was amended in 2013 and the current framework only refers to the obligation to ‘store’ such Data retention and disclosure obligations data in Greece and retain it for 12 months. The relevant EU directive has been fully implemented in Greece with Law No. 3917/2011. Operators and service providers must destroy customer Key trends and expected changes data 12 months after the time of every communication unless otherwise 16 Summarise the key emerging trends and hot topics in specifically requested by the public prosecutor. Operators and service communications regulation in your jurisdiction. providers are not compensated for their efforts. Following the annulment of the Data Retention Directive (Directive 2006/24/EC) by the European Following a public consultation on the amendment of the Regulatory Court of Justice, the national legal framework on data retention is under Framework for the Use of the Radio Frequency Spectrum for Internet- review but remains in force. The aforementioned framework is subject to Related Things (IoT), the results of which were published in February obligations arising from GDPR in force, as applicable since 25 May 2018. 2019, the EETT launched in February 2020 a second public consultation (still open) regarding the process of granting radiofrequency rights Unsolicited communications for terrestrial systems capable of providing wireless broadband elec- The relevant EU directives have been fully implemented in Greece with tronic communications services in the 700MHz, 2GHz, 3400–3800MHz Law No. 3471/2006. and 26GHz bands. These bands have been pointed out as pioneering frequency bands to be used for the introduction and development of 5G Cybersecurity networks in the European Union by 2025. 13 Is there specific legislation or regulation in place concerning Also, the EETT’s Decision on Leased Lines market regulation, cybersecurity or network security in your jurisdiction? notified in November 2019 and accepted by European Commission’s relevant decision, is shortly expected, following which no retail market Data controllers and processors are required by law to ensure the will be subject to ex-ante regulation in Greek territory. implementation of appropriate organisational and technical measures to ensure the protection of personal data. Security obligations of electronic MEDIA communications networks and services providers are mainly governed by article 37 of Law No. 4070/2012 and relevant ADAE Regulations Regulatory and institutional structure (ADAE Decision Nos. 165/2011 and 205/2013). 17 Summarise the regulatory framework for the media sector in Law No. 4577/2018 (GG 199/Α’/03-12-2018) transposed the Network your jurisdiction. and Information Systems Directive (EU) 2016/1148 (the NIS Directive). According to the NIS Directive, certain additional obligations are In the media sector, there is a significant difference between the devel- imposed on a list of operators and providers. Businesses falling within opment and regulation of distribution platforms and pay TV on one the scope of Law No. 4577/2018 have the following basic obligations: hand and free-to-air television content providers on the other hand. • adopt technical and organisational measures for the security of In February 2014 the National Commission for Telecommunications networks and information systems; and Post (EETT) completed the procedure for the award of the first • adopt measures to prevent and minimise the impact of incidents licence for a digital television network, which was awarded to Digea. affecting the security of networks and information systems; In April 2014, the EETT issued a decision on the techno-economic www.lexology.com/gtdt 51 © Law Business Research 2021 Greece Nikolinakos & Partners Law Firm

model to be used to define the price caps to be charged by Digea to Licensing requirements operators. 19 What are the licensing requirements for broadcasting, According to the applicable legislation, it is relatively simple to including the fees payable and the timescale for the obtain a licence for pay TV via cable or satellite, as it requires an appli- necessary authorisations? cation by a company having the form of a société anonyme; there is no limit on the number of licences granted and there is an obligatory According to the applicable legislation (Law No. 3592/2007, Law No. period within which the licence must be granted jointly by the National 4070/2012 and Directives for Television without Frontiers), analogue Council of Radio and Television (ESR) and the Minister, or refused. licences to transmit free-to-air radio programmes and digital terrestrial Breach of this period without a response from the ESR is considered pay TV and radio are granted through a tender. The digital television to be a silent approval. The decision is a joint decision of the ESR and network licences were granted through an auction in February 2014. the Minister, meaning in practice that the Minister is bound to issue a Regarding licensing of content providers for free-to-air digital terrestrial ministerial decision in line with the proposal of the ESR. The Minister television, the licensing requirements are defined in Law No. 4339/2015. cannot refuse. An application can be made from any company in the EU The law provides for the award of licences through an auction conducted having the form of a société anonyme. Licensing for terrestrial pay TV by the ESR, following the relevant ministerial decision. Special condi- and free-to-air television is more complicated, based on a tender. Law tions shall be defined by the ESR, but the law sets requirements No. 4339/2015 has defined the process and key conditions for the award concerning the legal form, the minimum capital, the requirement to of licences to digital terrestrial television content providers. Issues that identify shareholders, technical infrastructure, programme content, will be evaluated are the extent of the investment, financial reliability, number of employed personnel, etc. experience and existing position in the market to avoid concentration, as On July 6th 2017, the ESR issued a decision defining that the well as the kind of programmes that will be transmitted. number of television licences to be awarded through the tender will be seven. In 2018 the ESR awarded five out of seven available free- Ownership restrictions to-air national terrestrial digital television licences, while in 2019 it 18 Do any foreign ownership restrictions apply to media awarded one more. services? Is the ownership or control of broadcasters The general provisions on radio and television content apply, otherwise restricted? Are there any regulations in relation meaning that the programme must adhere to the general principles of the to the cross-ownership of media companies, including radio, Greek Constitution and there are further obligations concerning minors, television and newspapers? rating of the programmes, advertising, pluralism and non-discrimination, etc. In the case of pay TV, the agreements between programme According to the applicable legislation (Law No. 3592/2007), control- administrators and the holders of a licence (the platform operator) must ling more than one licence holder in the television or radio sector is be approved by the ESR. Only notification and not approval is needed prohibited. Everyone is allowed to participate in more than one licence in the case of an agreement with providers concerning a programme holder in television or radio to the extent that he or she does not control that has already been transmitted in public from a licensed free-to-air more than one (a person has control over a licence holder if it can station in Greece or another country. substantially influence the decision-making process or it has the power to appoint at least one member of the board of directors or an admin- Foreign programmes and local content requirements istrator in another operator). Foreign investors have the opportunity to 20 Are there any regulations concerning the broadcasting participate in broadcasting activities in Greece, subject to the generally of foreign-produced programmes? Do the rules require a applicable restrictions. minimum amount of local content? What types of media fall The concentration of media is prohibited. Concentration in media is outside this regime? considered to exist if an undertaking acquires a dominant position that is defined in Law No. 3592/2007, which provides also for the complimen- The legal framework according to the EU has been transposed into tary application of Competition Law No. 3959/2011. The Competition national legislation; currently, no regulation applies to online and Commission is the competent authority to consider issues of concentra- mobile content. tion in the sector or any other competition law issues. The broadcasting of foreign-produced programmes is regulated Market share is calculated based on income from advertising and by the same regulations that apply to Greek programmes. There are exploitation of programmes or provision of other similar services during minimum quotas for European content and an obligation that foreign- the previous year. produced programmes in a language other than Greek must be Law No. 4339/2015 (as amended by Law No. 4487/2017) sets the subtitled, which applies only to free-to-air television and pay TV but not following restrictions on shareholders holding more than 1 per cent of to online or mobile content. shares, board members and legal representatives of entities that partic- The EU’s current Audiovisual Media Services Directive 2010/13/ ipate in tenders for digital terrestrial television content providers: EU (the AMS Directive), as transposed in Greece by PD 109/2010, • non-convictions by irrevocable court decision for specific governs EU-wide coordination of national legislation on all audiovisual crimes; and media, both traditional television broadcasts and on-demand services. • non-participation in any manner in companies researching the The aforementioned framework was amended by Directive (EU) radio or television market and advertising companies, as well as in 2018/1808 (Audiovisual Media Services Directive) (the AVMS Directive)) companies conducting telemarketing. given changing market realities that in turn was transposed into the Greek legal framework through Law No. 4779/2021. It introduces the The law also refers to the general prohibition from participating in following significant changes to the current framework, under the companies that execute public contracts and require licence applicants to AVMS Directive: submit evidence proving how the applicant acquired the financial means • the country-of-origin principle (which states that providers only used or intended to be used for the operation of the content provider. need to abide by the rules of a EU member state rather than in There is no suggestion of any change to the regulation of multiple countries) is strengthened, with more clarity on which cross-ownership. EU member state’s rules apply, derogation procedures for both

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television broadcasters and on-demand service providers as well (messages) for a specific period, calculated daily. These are considered as possibilities for derogations in the event of public security to be messages that inform the public on: public health, protection, concerns and serious risks to public health; welfare and facilitation of people with disabilities and the population • for the first time, several audiovisual rules extend to video-sharing groups in need of social protection, promoting genuine gender equality, platforms (eg, services such as YouTube as well as audiovisual of equal treatment, the fight against violence against women, eliminating content shared on social media services, such as Facebook); gender stereotypes and generally removing all forms discrimination • there is better protection of minors against harmful content in on the grounds of sex, racial or ethnic origin, religion or other beliefs, the online world: the new rules enhance protection of video-on- disability, illness, age, family or social status, sexual orientation, identity demand services and also extend the obligation to protect minors or gender characteristics, or the transmission of messages referring to on video-sharing platforms, which need now to put in place appro- educational or other programmes organised by the Hellenic Parliament, priate measures; as well as to all its national, political, cultural and social activities. • there are new provisions to protect children from inappropriate Under Law No. 4779/2021, broadcasters must reserve for European audiovisual commercial communications for foods and bever- works 50 per cent of their transmission time, excluding the time allotted ages not suitable for minors, including by encouraging codes of to news, sports events, games, advertising, teletext services and tele- conduct and appropriate provisions in general terms of service shopping. There are also increased obligations to promote European where necessary. Video-sharing platforms also have to respect works for on-demand services, who need to have at least a 30 per cent certain obligations for the commercial communications they are share of European content in their catalogue and to ensure the promi- responsible for and be transparent about commercial communica- nence of this content. tions that are declared by the users when uploading content that contains such commercial communications; Regulation of new media content • there is reinforced protection on television and video-on-demand 23 Is new media content and its delivery regulated differently against incitement to violence or hatred; from traditional broadcast media? How? • video-sharing platforms are also required to take appropriate measures to protect people from incitement to violence or According to applicable legislation (Law No. 3592/2007), new media hatred and content constituting criminal offences under national content and its delivery are regulated in the same way as traditional or EU law; broadcast media. • the independence of audio-visual regulators is reinforced in EU law by ensuring that they are legally distinct from their govern- Digital switchover ment and functionally independent from the government and any 24 When is the switchover from analogue to digital broadcasting other public or private body; and required or when did it occur? How will radio frequencies • there is increased flexibility in television advertising. Instead of freed up by the switchover be reallocated? the current 12 minutes per hour, broadcasters can choose more freely when to show ads throughout the day. An overall limit of The relevant legislation (Law No. 3592/2007) is in place and sets the 20 per cent of broadcasting time is maintained between 6am and framework. The schedule and technical specifications for the digital 6pm, and the same share allowed during prime time (from 6pm to switchover have been defined by Joint Ministerial Decisions. According midnight). to these decisions, the switch off of analogue broadcasting and completion of digital broadcasting was scheduled to be completed within 325 Advertising days from 7 February 2014 (the date of the awarding of the Rights of Use 21 How is broadcast media advertising regulated? Is online of Frequencies for terrestrial digital broadcasting) (ie, by 29 December advertising subject to the same regulation? 2014). However, according to Digea’s public announcements, the last switch off was scheduled for 6 February 2015. Broadcast media advertising is regulated under the AVMS Directive and the recent Law No. 4779/2021 and the Open Frontiers Directives, fully Digital formats implemented, which do not apply to online advertising. 25 Does regulation restrict how broadcasters can use their Online advertising is regulated by general provisions in the legis- spectrum? lation concerning e-commerce and consumer protection. Furthermore, the recently established Electronic Media Business Register aims at the The existing regulation does not restrict how broadcasters can use registration of all online media. The relevant Register and its members their spectrum. were published on 18 April 2017 on the website of the Ministry of Digital Policy. Only online media providers that are registered are eligible to Media plurality receive state advertising. 26 Is there any process for assessing or regulating media plurality (or a similar concept) in your jurisdiction? May the Must-carry obligations authorities require companies to take any steps as a result of 22 Are there regulations specifying a basic package of such an assessment? programmes that must be carried by operators’ broadcasting distribution networks? Is there a mechanism for financing the The provision of broadcasting services over broadband networks costs of such obligations? requires a network operator and a content provider, who may be the same or different entities. No regulations specify a basic package of programmes that must be The provision of television and radio services via terrestrial digital carried by operators’ broadcasting distribution networks, the only technology (using radio frequencies allocated for broadcast televi- exception being the obligation on these operators to provide some spots sion and radio digital signal) requires a network provider of electronic with social content. In Greek legislation as in force, radio and television communications and a content provider. The network provider and the content providers must broadcast free of charge ‘social content’ spots content provider are required to be separate entities. www.lexology.com/gtdt 53 © Law Business Research 2021 Greece Nikolinakos & Partners Law Firm

The main activity of Digea is to provide networking and multi- • the National Council of Radio and Television: an independent plexing, as well as network broadcasting for any legitimate television administrative authority that supervises and regulates the radio station wishing to use its services. In essence, Digea creates the and television market; network and transfers the content of the channels, as delivered to • the Hellenic Competition Commission, which is responsible for the its systems. application of competition law in all sectors, except the electronic Following the EETT’s plenary decision in February 2014, Digea was communication and postal services sector; granted all spectrum rights of use of national and regional coverage • the Hellenic Authority for Communication Security and Privacy: an to develop a digital terrestrial television network. After the successful independent authority responsible for the protection of security completion of the tender process by the EETT, Digea has developed and privacy of communications; and infrastructure for the digital terrestrial television networks and the • the Hellenic Data Protection Authority: an independent authority last analogue broadcasting to be switched off was on 6 February 2015. responsible for the protection of personal data in all sectors. According to the licence granted by the EETT, Digea must serve all licensed programmes under the same conditions (non-discriminatory Appeal procedure treatment). 29 How can decisions of the regulators be challenged and on what bases? Key trends and expected changes 27 Provide a summary of key emerging trends and hot topics in Decisions of the regulators can be challenged at the Administrative media regulation in your country. Appeal Court and the decisions of the court can be challenged at the Council of State. Major regulatory issues are challenged directly at In February 2014, the EETT completed the procedure for the award of the Council of State. In the case of the EETT, all regulatory decisions the first licence for a digital television network. In October 2015, Law No. (regulatory administrative acts) are appealed against before the Council 4339/2015 defined the process and conditions for the award of licences of State with a Petition for Annulment, whereas decisions with the to digital terrestrial television content providers. The law provides for a content of an individual administrative act are appealed against before limited number of licences, the exact number of which shall be defined the Administrative Court of Appeal. All regulatory decisions brought by ministerial decision. before the Council of State and decisions with the content of an indi- Moreover, a new act has been prepared for the procedure for the vidual administrative act, not imposing penalties, are challenged only award of licences for digital radio stations in Greek territory. In January concerning the appropriate application of law and procedural rules, and 2018, following the issuing of Ministerial Decisions Nos. 169-171/2018, not on the merits (the facts) of the case. Decisions that impose fines, etc, the EETT launched an auction for the awarding of rights to use terres- can be challenged both in their substance and concerning the appro- trial DAB frequencies of national and regional coverage, with the priate application of law and procedural rules at the Administrative procedure of sealed tenders in which each tenderer pays the price Appeal Court. Decisions of the Administrative Court of Appeal can be offered. Through this process, a National Coverage Radio Frequency appealed against on a second grade before the Council of State only Use Right would be granted for the DAB+ multiplex channels described concerning the appropriate application of law and procedural rules. in the relevant tender document and several Regional Radio Frequency Use Rights for the award areas specified in the same tender document. Competition law developments The auction received two applications for awards, which were both 30 Describe the main competition law trends and key merger found non-eligible by the EETT in May 2018. Analogue radio FM stations and antitrust decisions in the communications and media in Greece still operate under a temporary licencing regime. sectors in your jurisdiction over the past year.

REGULATORY AGENCIES AND COMPETITION LAW On 12 November 2020, with Decision No. 967/1, the EETT approved the concentration of mobile operators Vodafone Hellas and Wind Hellas that Regulatory agencies was notified to it (article 5-10 of Law No. 3959/2011), according to which 28 Which body or bodies regulate the communications and the two companies separate or spin off their branches holding passive media sectors? Is the communications regulator separate infrastructure and offering them to a new company, Vantage Towers from the broadcasting or antitrust regulator? Are there Greece, which will manage them offering related services, through a mechanisms to avoid conflicting jurisdiction? Is there a lease agreement. The new company, which is now entirely controlled by specific mechanism to ensure the consistent application of Vodafone, has become the largest infrastructure management company competition and sectoral regulation? for mobile base stations in Greece, including in its portfolio more than 5,200 base stations. All the regulatory agencies are independent administrative authorities. Concerning emphasis on certain business sectors, the Hellenic They are fully independent of network operators and service providers. Competition Commission has initiated the following sector inquiries: The agencies that regulate the communications and media sectors are • a sector inquiry into e-commerce primarily focusing on the the following: following markets: • the National Commission for Telecommunications and Post • clothing and footwear (with emphasis on the relevant sports- (EETT): the national regulatory authority that supervises and wear and footwear market); regulates the electronic communications and postal services • electronic and electric devices; market. Additionally, it is responsible for frequency allocation • books; and spectrum management. It is also responsible for the applica- • mediation services to provide travel tickets, tickets for events, tion of competition law in the electronic communications sector and catering services; and the postal services sector. It is also the Dispute Resolution • accommodation and rental – Airbnb; and Body for disputes arising from the application of cost reduction • e-pharmacies (with emphasis on dietary supplements and Directive and rights of way under Law No. 4463/2017 and Law No. para-pharmaceuticals). Publication of the final report is 4727/2020. expected on 15 October 2021; and

54 Telecoms & Media 2021 © Law Business Research 2021 Nikolinakos & Partners Law Firm Greece

• a sector inquiry into fintech services in collaboration with the Bank of Greece. Publication of the final report is expected on 15 December 2021.

Coronavirus 31 What emergency legislation, relief programmes and other initiatives specific to your practice area has your state implemented to address the pandemic? Have any existing government programmes, laws or regulations been amended Dina Th Kouvelou [email protected] to address these concerns? What best practices are advisable for clients? Nikos Th Nikolinakos [email protected] According to article 81, paragraph 1 of Law No. 4712/2020, providers Alexis N Spyropoulos of national and regional television content were able to pay 50 per cent [email protected] of the monthly fee including the corresponding value-added tax for five months (March, April, May, June and July 2020) to the terrestrial digital 182, Mesogeion Avenue broadcaster network provider that carries their signal (Digea). Digea 15561 was similarly able to deduct an amount equal to the balance of the Athens unpaid monthly fee from the future instalments Digea owed the EETT Greece for the right to use spectrum it has been granted. Tel: +30 213 00 200 20 According to article 186, paragraph 1 of Law No. 4764/2020, Fax: +30 214 41 60 889 providers of regional television content were able to pay Digea 50 per www.nllaw.gr cent of the monthly fee including the corresponding value-added tax for five months (October, November and December 2020 and January and February 2021). Digea was similarly able to deduct an amount equal to the unpaid monthly fee from certified tax debts of any kind to the Greek state.

www.lexology.com/gtdt 55 © Law Business Research 2021 Ireland

Helen Kelly, Simon Shinkwin and Kate McKenna Matheson

COMMUNICATIONS POLICY Authorisation/licensing regime 2 Describe the authorisation or licensing regime. Regulatory and institutional structure 1 Summarise the regulatory framework for the communications The provision of communications services is currently subject to the sector. Do any foreign ownership restrictions apply to regime set out in the Authorisation Regulations, which confers a general communications services? right to provide an electronic communications network (ECN) or an electronic communications service (ECS) (or both) provided certain The Department of Environment, Climate Action and Communications conditions are complied with. No distinction is made as to the type of (DECC) is the relevant governmental department responsible for network or service (eg, mobile, fixed (including public Wi-Fi) or satellite). the telecoms sector and the Department of Tourism, Culture, Arts, The notification procedure for obtaining a general authorisation Gaeltacht, Sport and Media is responsible for the media sector. The can be completed on the ComReg online portal. Operators are free to telecommunications regulator is the Commission for Communications commence operations once a properly and fully completed notification Regulation (ComReg). has been received by ComReg. A notifying party is, however, immedi- Ireland has implemented the EU regulatory framework governing ately subject to the Irish regulatory regime and the conditions set out in the electronic communications sector by way of primary and secondary the general authorisation. Conditions that may be attached to a general legislation. Primary legislation consists of the Communications authorisation are set out in the schedule to the Authorisation Regulations. Regulation Acts 2002–2016. Secondary legislation currently consists of General authorisations are unlimited in duration. No fee is payable regulations that transpose the EUframework, namely: on notification; however, an annual levy (0.2 per cent of relevant turn- • the European Communities (Electronic Communications Networks over) is payable where an operator’s relevant turnover (ie, relating and Services) (Framework) Regulations 2011 (SI 333/2011) (the to the service or network) in Ireland in the relevant financial year is Framework Regulations); €500,000 or more. • the European Communities (Electronic Communications Networks The EU Framework as transposed also governs the granting of and Services) (Access) Regulations 2011 (SI 334/2011) (the Access rights of use for numbers and radio spectrum. ComReg revised the Regulations); numbering conditions of use and application process, amalgamating the • the European Communities (Electronic Communications Networks Numbering Conventions and conditions of use to simplify the rules. and Services) (Authorisation) Regulations 2011 (SI 335/2011) (the Fixed and mobile service providers may also need to obtain a Authorisation Regulations); licence under the Wireless Telegraphy Act 1926 (as amended) in connec- • the European Communities (Electronic Communications Networks tion with the use of wireless telegraphy apparatus. Non-compliance with and Services) (Universal Service and User’s Rights) Regulations the Wireless Telegraphy Act can be prosecuted by ComReg. 2011 (SI 337/2011) (the Universal Service Regulations); and • the European Communities (Electronic Communications Networks Licensing and spectrum regime and Services) (Privacy and Electronic Communications) Regulations There are three mobile network operators in Ireland (Three Ireland, 2011 (SI 336/2011) (the Privacy Regulations). Vodafone Ireland and eir) that have been granted liberalised use licences for spectrum in the 800MHz, 900MHz and 1800MHz bands Following a review of the regulatory framework for electronic (among others). ComReg does not issue licences of indefinite duration communications, the directive establishing the European Electronic or include any implied or express right of renewal, extension or any Communications Code (EECC) entered into force in December 2018. other form of prolongation. It considers that periodic predetermined Ireland missed the deadline for implementation on 21 December 2020 re-release of spectrum is the most appropriate mechanism for the and is expected to implement the EECC into Irish law in 2021. We under- release of spectrum with an ongoing award for the release of 5G spec- stand that the DECC is currently working on finalising Irish legislation trum ongoing (and the subject of a regulatory appeal). to implement the EECC. No foreign ownership restrictions apply to communications service Flexibility in spectrum use at this time, although Ireland is expected to bring in local laws to imple- 3 Do spectrum licences generally specify the permitted use ment the EU wide Foreign Direct Investment Screening Regulation in or is permitted use (fully or partly) unrestricted? Is licensed 2021. The scope of Irish rules not yet clear. spectrum tradable or assignable?

The legal framework controls ComReg’s management of the radio frequency spectrum in Ireland. ComReg issues licences on a technology and service-neutral basis (eg, the ‘liberalised use’ licences issued

56 Telecoms & Media 2021 © Law Business Research 2021 Matheson Ireland following a spectrum auction were issued ‘to keep and have possession Wholesale call origination on the public telephone network of apparatus for wireless telegraphy for terrestrial systems capable of provided at a fixed location providing ECSs’). ComReg considers that spectrum trading is a spec- Eir has been designated with SMP in this market and the remedies trum management tool that, along with other measures, can increase imposed on eir include access, non-discrimination, transparency, the efficient use of spectrum rights. accounting separation, price control and cost accounting. However, ComReg may, through licence conditions or otherwise, provide for proportionate and non-discriminatory restrictions to the Wholesale call termination on individual public telephone types of radio network or wireless access technology used for ECS networks provided at a fixed location where this is necessary (eg, to avoid harmful interference and safe- Seven fixed-service providers (eir, BT Communications Ireland Limited, guard the efficient use of spectrum, etc). Verizon Ireland Limited, Virgin Media Ireland Limited (formerly UPC ComReg has published regulations (the Wireless Telegraphy Communications Ireland Limited), Colt Telecom Ireland Limited, Smart (Transfer of Spectrum Rights of Use) Regulations 2014 (SI 34/2014)) Telecom Holdings Limited and Magnet Networks Limited) have been and guidelines for spectrum trading in the Radio Spectrum Policy designated as having SMP. All operators are subject to price control and Programme (RSPP) bands and is prioritising the setting out of a spec- cost-accounting obligations, with separate price control and accounting trum leasing framework for the RSPP bands a priority action as part obligations applying to eir. of its Strategy Statement. ComReg has imposed an ex-ante regime for reviewing notified spectrum transfers to determine whether such Wholesale local access (provided at a fixed location) transfers would distort competition in the market. Where the transfer Eir has been designated with SMP in this market and the remedies forms part of a wider transaction that is subject to merger control scru- imposed on eir include access, transparency, non-discrimination, tiny by the Irish Competition and Consumer Protection Commission accounting separation, price control and cost-accounting obligations. (CCPC) or by the European Commission, the framework and guidelines will not apply and the appropriate competition body will be the sole Wholesale central access decision-making body. ComReg must be informed of any such merger Eir has been designated with SMP in the regional wholesale central or acquisition at the same time it is notified to the relevant competi- access (WCA) market (but not the urban WCA in which ComReg consid- tion body. The framework and guidelines deal solely with spectrum ered there was enough competition in this market) and the remedies trading; ComReg has indicated that it will deal with spectrum leasing imposed on eir include access, transparency, non-discrimination, and sharing or pooling on a case-by-case basis pending further consid- accounting separation, price control and cost-accounting obligations. eration of the same. ComReg has also published its Framework for Spectrum Leases in Wholesale terminating segments of leased lines Ireland concerning: Eir has been designated with SMP in this market and the remedies • transfer of spectrum regime under the EU Spectrum Transfer imposed on eir include access, transparency, non-discrimination, Framework and implementing Irish legislation; accounting separation, price control and cost-accounting obligations. • the scope of the proposed Spectrum Lease Framework (noting the difference between a spectrum lease or transfer); Mobile communications • the procedural framework for spectrum leasing; and Wholesale voice call termination on individual mobile networks • how ComReg intends to grant and issue a spectrum lease licence. Six mobile network operators were designated as having SMP in this market (Vodafone, O2 Ireland (acquired by Three Ireland), Meteor, Three ComReg published a decision in December 2020 concerning a signifi- Ireland, Tesco Mobile Ireland Limited and Lycamobile Ireland Limited). cant release of spectrum (known as a multi-band spectrum auction) Remedies imposed on these operators include access, non-discrimina- concerning the 700MHz, 1.4GHz, 2.3GHz and 3.6GHz bands. This deci- tion, transparency and price-control obligations. sion outlines the award or auction process for the release of licences ComReg took court action against eir seeking to impose signifi- in these bands and licence conditions for spectrum in these bands cant penalties (about €10 million) over alleged breaches of the Access (eg, roll-out obligations). This decision was appealed by one oper- Regulations by failing to allow access to its network to other telecom ator, Three Ireland, on various grounds and is currently before the providers. In December 2018, eir agreed to pay ComReg €3 million to Irish courts. settle these enforcement proceedings. As part of the settlement deal, eir Due to covid-19, ComReg temporarily released some of this also consented to allow independent observers to monitor its internal spectrum (on a short-term basis) to several operators to deal with divisions between its wholesale and retail structures. the crisis. Non-compliance with requests for information to inform market analysis or to enable ComReg to carry out its statutory function can be Ex-ante regulatory obligations prosecuted by ComReg. 4 Which communications markets and segments are subject to ex-ante regulation? What remedies may be imposed? Structural or functional separation 5 Is there a legal basis for requiring structural or functional The following communications markets are subject to ex-ante separation between an operator’s network and service regulation. activities? Has structural or functional separation been introduced or is it being contemplated? Fixed communications Retail access to the public telephone network at a fixed location Structural separation has not been provided for in the Irish commu- Eir has been designated with significant market power (SMP) in this nications regulatory framework. Structural separation can be imposed market and the remedies imposed on eir include access and price under the Competition Acts 2002–2017 as a remedy in cases entailing control obligations, and an obligation not to unreasonably bundle this an abuse of dominance contrary to section 5 of the Competition Acts service with its other services. 2002–2017.

www.lexology.com/gtdt 57 © Law Business Research 2021 Ireland Matheson

Functional separation powers do exist as an exceptional remedy in time performance only. The submission set out the basis for eir’s force respect of vertically integrated operators with SMP under the regula- majeure claim as being the ‘exceptional weather events in January, tory framework, in circumstances where ComReg concludes that: November and December 2015’. Also, eir submitted an expert report • transparency, non-discrimination, accounting separation, access on the weather conditions associated with the force majeure claim. In and price-control obligations have failed to achieve effective response, ComReg formed the view that it could be considered that force competition; and majeure conditions applied in December 2015 but that the January and • where it has identified important and persisting competition prob- November 2015 weather events did not constitute force majeure events lems or market failures concerning the wholesale provision of within the meaning of the Performance Improvement Programme certain access markets. (PIP3). Eir paid ComReg a penalty of €3,094,000 in December 2016 for its failure to meet the PIP3 agreed USO quality of service performance Following a settlement agreement between eir and ComReg, eir is to targets for 2015. In light of the this, ComReg does not intend to take impose a revised regulatory governance model to separate its retail and further enforcement action against eir for the 2015 period. In March wholesale arms (with independent observers monitoring such a separa- 2017, eir initiated High Court proceedings against ComReg concerning tion for a five-year period). fault repair time obligations imposed on eir. In January 2017, ComReg imposed a 48-hour deadline on eir to repair faults in its telecoms lines Universal service obligations and financing (pursuant to complaints from eir’s competitors). 6 Outline any universal service obligations. How is provision of In June 2017, ComReg applied to the High Court for declarations of these services financed? non-compliance concerning eir’s transparency, non-discrimination and access obligations to provide access to its network to other operators, Eir has been designated as the universal service provider (USP) for seeking a financial penalty of up to €10 million (which would be the telephony services since 2006. largest in the state) concerning these regulatory breaches. In December The following points should be noted concerning the universal 2017, eir launched counter proceedings against the Minister claiming service obligation (USO): the EU telecoms regulations have been wrongly applied in Ireland • eir must satisfy any reasonable request to provide, at a fixed loca- (Access Regulations) and that ComReg has overstepped its remit in tion, connections to the public telephone network and access to a trying to impose civil penalties ‘of the kind it is proposing under existing publicly available telephone service (PATS); law’. In December 2018, eir agreed to pay €3 million to ComReg to settle • the maintenance of the National Directory Database (NDD) is no these enforcement proceedings. As part of the settlement deal, eir also longer a USP obligation; consented to allow independent observers to monitor its internal divi- • an accessibility statement being published to ensure equivalence sions between its wholesale and retail structures. In February 2020, in access and choice for disabled end users is now an obligation of ComReg published an update on the progress of the commitments all undertakings and the provision of specialised terminal equip- under its settlement agreement with eir. The set of commitments, ment for disabled end users is no longer an obligation of the USP when fully implemented, will result in the establishment and opera- or any undertaking as of 1 January 2016; and tion of an enhanced regulatory governance model in eir. Completion • eir must adhere to the principle of maintaining affordability for of the commitments is underpinned by €9 million held in escrow that universal services. is partially released to eir on completion of commitments milestones. ComReg will continue to closely monitor eir’s USO performance In December 2018, ComReg decided that PortingXS (a Dutch company) and publishes quarterly reports on its USO performance. would be responsible for the management and maintenance of the NDD from 1 July 2019, after the expiry of the transition period to allow the Number allocation and portability transfer of functions from eir. As such, PortingXS must ensure that a 7 Describe the number allocation scheme and number comprehensive record exists of all subscribers of publicly available portability regime in your jurisdiction. telephone services in the state, excluding those who have refused to have their details included in the NDD. In August 2015, ComReg specified All operators providing a PATS must provide number portability to certain requirements to be complied with by all undertakings to ensure subscribers at no direct charge. Operators must ensure that the porting equivalence in access and choice for disabled end users (previously, of numbers is carried out within the shortest possible time; numbers only eir as the USP had obligations in respect of a Code of Practice must be activated within one working day and loss of service during concerning the provision of services for people with disabilities). the process may not exceed one working day. ComReg may specify the Eir is subject to legally binding performance targets relating to payment of compensation to subscribers for delays in porting. timescales for connection, fault-rate occurrence and fault repair times. ComReg has confirmed as part of 2013 and 2017 decisions on ComReg issues quarterly reports detailing eir’s performance data machine-to-machine numbering, that number portability is in principle covering its legally binding and non-legally binding performance targets. an entitlement of machine-to-machine number holders. There is currently no USO fund in Ireland. Eir, as the USP, may ComReg is tasked with the management of the National Numbering apply to receive funding for the net cost (if any) of meeting the USO Scheme, including attaching conditions to rights of use for numbers and where ComReg determines there is a net cost and that it represents generally makes allocations and reservations of numbering capacity an unfair burden. There is currently litigation before the Irish courts from the scheme to notified network operators, who each sub-allocate following ComReg’s rejection of eir’s application for funding and a refer- individual numbers to service providers and end users. ComReg’s ence has been made in May 2020 to the Court of Justice of the European tasks include: Union (CJEU) on certain aspects of this case including the fairness of • assigning numbers for existing services; USO burden on eir. • developing frameworks for new and innovative services; On 7 April 2017, ComReg published the outcome of its assess- • ensuring numbers are used following conditions of use set out in ment of eir’s 2015 compliance with the annual performance targets the Numbering Conditions of Use; and set out in Performance Improvement Plan 3. Eir submitted a force • monitoring number utilisation and number changes when required. majeure claim in June 2016 and sought relief in respect of fault repair

58 Telecoms & Media 2021 © Law Business Research 2021 Matheson Ireland

Applications for allocation are made via an application form and determined Vodafone Ireland incorrectly notified its customers of this numbers are granted on a first come, first served basis except when change and imposed a fine of €250,000 and forced Vodafone Ireland to starting allocation from newly allocated number ranges. Allocation is remediate its customers to the tune of €2.5 million. Vodafone Ireland carried out in an open, transparent and non-discriminatory manner. also made binding commitments not to use auto opt-ins in future. ComReg currently does not charge fees to recipients for allocations In 2018, Sky Ireland made a settlement and paid ComReg €117,000 of numbers. concerning an alleged failure to provide customers with a contract on a In December 2018, ComReg introduced measures regulating the durable medium, and breaches of their right to a cooling-off period. As costs of using non-geographic numbers. As of 1 December 2019, the part of this settlement, Sky Ireland agreed to take remedial action to cost of a call to a non-geographic number cannot exceed the cost of prevent any further breaches of these consumer obligations. calling a landline number. Also, the number of non-geographic number In 2018, ComReg brought proceedings against Yourtel concerning ranges available in Ireland will be reduced from five to two by 1 billing customers for a service that it was alleged was never received. January 2022. In February 2019, Yourtel consented to orders before the Commercial Court requiring it to cease its contraventions (and has since been Customer terms and conditions served with restraining orders to prevent it from doing so). Eir was fined 8 Are customer terms and conditions in the communications €23,500 and received 10 separate criminal convictions concerning 10 sector subject to specific rules? counts of incorrect charging of customers for electronic communications services Operators providing a publicly available ECN or ECS must provide In 2019, the District Court heard a prosecution taken by ComReg certain standard contract conditions to consumers in a clear, compre- against Pure Telecom Limited concerning Pure Telecom failing to hensive and easily accessible form (eg, details of price and tariffs and provide full pricing information in its customer contracts. Pure Telecom contract duration, etc). Operators must notify customers one month in pleaded guilty to the counts brought against it and in lieu of a conviction advance of any proposed changes to their terms and conditions and of was required to make a charitable donation of €10,000. ComReg also their right to withdraw without penalty if they do not accept the changes. found Vodafone Ireland was non-compliant because it did not provide Failure to do so may be prosecuted as a criminal matter as failure to customers of its ‘Extra’ Pay as You Go product with their contract on comply is an offence. It is a defence to establish that reasonable steps a durable medium, in contravention with the Consumer Information were taken to comply, or that it was not possible to comply, with the Regulations 2013. ComReg reached a settlement agreement with requirement. ComReg also has the choice of bringing a civil action for Vodafone Ireland that included an undertaking by Vodafone Ireland to non-compliance to the High Court. ComReg has not specified a medium refund 72,774 customers the sum of €416,972. to be used for contract change notifications but provides that notifica- ComReg has brought cases in the Dublin District Court against eir, tions must be presented to customers clearly, unambiguously and Vodafone Ireland and Yourtel in recent years. In June 2018, eir plead transparently, and must include certain minimum information. guilty to 10 offences concerning overcharging customers and paid a ComReg has initiated enforcement actions regarding several total of €23,500. Vodafone Ireland had the Probation Act applied to it on alleged breaches of the rules and most recently issued notices of non- condition that it donates €7,500 to charity and Vodafone Ireland agreed compliance against eir, Vodafone Ireland, Virgin Media Ireland and Sky to contribute to ComReg’s costs of €15,000, and Yourtel pled guilty Ireland in 2018 for failure to notify customers in the prescribed manner to failing to comply with a statutory request for information and was as required under the Universal Service Regulations. required to make a payment towards ComReg’s costs (the Yourtel case ComReg has also issued several requirements concerning bills related to an overcharging complaint). Following a further investigation, and billing mediums. By way of example, consumers must have a choice ComReg, as of February 2019, applied for, and received, a restraining about whether to receive paper bills or alternative billing mediums, and order concerning Yourtel and the overcharging of customers (as Yourtel a paper bill must be provided free of charge where access to online had 89 prior convictions for such an offence). billing is not possible. In November 2018, ComReg announced Formal Dispute Resolution ComReg’s enforcement powers concerning consumer contracts Procedures for End-Users of Electronic Communication Services and derive from both the telecommunications framework (the Universal Networks, introducing structures and timelines for disputes concerning Service Regulations) and the European Union (Consumer Information, any regulations under which ComReg has the power to resolve disputes. Cancellation and Other Rights) Regulations 2013 (SI 484/2013) (the These measures entered into force in September 2019. Formal Dispute Consumer Information Regulations) (following Directive 2011/83/EU Resolution Procedures apply to issues for end users of mobile phone, (Consumer Rights). Consumer contract compliance continues to be a home phone and broadband whose complaints have been unresolved core focus of ComReg, and it has engaged in several enforcement actions for 40 working days or more after lodging a complaint with a service against operators in recent years including the following examples. provider. ComReg will adjudicate the dispute once the end user has In 2016, ComReg imposed a €255,000 fixed penalty notice on Virgin applied for the service. The application procedure is set out in greater Media Ireland for failure to provide 26,046 of its customers with a detail in Annex 2 of ComReg document 18/104. contract in a durable form in contravention of the Consumer Information Regulations 2013. ComReg investigated Virgin Media Ireland as a result Net neutrality of complaints from Virgin customers who claimed the lack of a contract 9 Are there limits on an internet service provider’s freedom to in durable form made it difficult for the affected Virgin Media Ireland control or prioritise the type or source of data that it delivers? customers to recognise and see exactly what they were being charged Are there any other specific regulations or guidelines on net for by the company. This was the first time that ComReg has imposed neutrality? fixed penalty notices (FPNs). ComReg has the power to issue FPNs under the Consumer Protection Act 2007 for breaches of the Consumer The Telecom Single Market Regulation, effective from June 2017, laid Information Regulations 2013. down measures regarding open internet access and net neutrality. In 2017, ComReg initiated an investigation into how Vodafone ComReg has stated that its approach to network neutrality will be Ireland notified its customers of changes to their roaming terms informed by ongoing Body of European Regulators for Electronic and conditions (to include an automatic opt-in provision). ComReg Communications (BEREC) work. www.lexology.com/gtdt 59 © Law Business Research 2021 Ireland Matheson

BEREC published its Guidelines on Net Neutrality to National a cost-orientation obligation. This decision was based on a market Regulatory Authorities (NRAs) on 6 September 2016 providing guid- review carried out by ComReg examining the nature and structure of ance for NRAs to take into account when implementing the rules and the wholesale broadband access markets. assessing specific cases. Following a stakeholder consultation, the government approved ComReg has published its 2019 Report on the Implementation of plans for a new National Broadband Plan that will provide the initial the Net Neutrality Regulations in Ireland (as obliged under Regulation stimulus required to deliver high-speed broadband to every city, town, (EU) 2015/2120 (the TSM Regulation) and outlines how ComReg will: village and individual premises in Ireland. There were several delays in • safeguard open internet access; the design and procurement phases of the NBP owing to negotiations • ensure transparency measures are in place for open with another commercial provider (eir) seeking to provide high-speed internet access; broadband to some of the areas originally designated under the NBP. • supervise and enforce breaches of the TSM Regulation; and Most recently, one bidder, National Broadband Ireland, was selected as • implement the penalties for such breaches. the preferred bidder to deliver the NBP project. The NBP follows several previous state-funded broadband The European Union (Open Internet Access) Regulations 2019 (SI schemes in operation in Ireland: 343/2019) gives enforcement powers to ComReg concerning net • the Metropolitan Area Networks Scheme, which aimed to create neutrality. ComReg may give a direction to an undertaking requiring open-access fibre networks in more than 120 Irish towns for €170 the undertaking to take a measure under article 5(1) of SI 343/2019. million with support from EU structural funds; Where ComReg finds an undertaking has not complied with its direction • the National Broadband Scheme, operated by Three Ireland, or with the obligations under the Net Neutrality Regulations, and that provided mobile broadband to all premises in locations where undertaking has not corrected its behaviour following a notification no services were available or likely to be made available by the from ComReg, ComReg can seek an order from the High Court, which market (this contract expired in August 2014); and can include an order for payment of a financial penalty to ComReg. • the Rural Broadband Scheme, which aimed to provide broadband In December 2019, ComReg issued notifications of non-compliance to parts of Ireland where it was not commercially available and for breaches of net neutrality regulations to seven telecommunica- was designed to meet the needs of the last 1 per cent of the popula- tions companies operating in Ireland. The notifications were issued to tion not covered by any service. internet access service providers regarding transparency breaches in their consumer contracts. With the recent expansion of its powers, Previous governments established the Mobile Phone and Broadband ComReg has taken formal enforcement action against providers who Taskforce to identify immediate solutions to broadband and mobile appeared to have not been providing the required information in their phone coverage deficits and to investigate how better services could customer contracts concerning net neutrality. be provided to consumers before full build and rollout of the network planned under the NBP. The Taskforce published its report in 2017 Platform regulation outlining the issues considered and set out its recommendations and 10 Is there specific legislation or regulation in place, and have actions to alleviate barriers to mobile reception and broadband access, there been any enforcement initiatives relating to digital and the DECC publishes quarterly updates on how the recommenda- platforms? tions are being implemented. While ComReg does not have direct responsibility for the implementation of the NBP, the Mobile Phone and In addition to Part 8 of the Broadcasting Act 2009, which provides for Broadband Taskforce outlines several regulatory actions that can assist digital broadcasting and the associated migration from analogue tele- in the NBP rollout, and ComReg has announced it will undertake such vision, there is limited regulation of digital platforms in Irish law. action areas that support the Taskforce’s objectives. Regulation (EU) 2019/1150 (the Platform to Business Regulations) Separately to the NBP, in June 2018, ComReg decided to legalise came into force in Irish law in July 2020, which provide a framework some mobile phone repeaters in an attempt to boost the coverage of to ensure a transparent and predictable business environment for mobile phone services in respect of indoor reception. This was a key smaller businesses and traders on online platforms and marketplaces. recommendation of the government’s Mobile Phone and Broadband These rules apply to intermediation service providers and search Taskforce. ComReg decided to make certain mobile phone repeaters engine providers and include rules concerning terms and condi- licence-exempt provided certain technical conditions as outlined in the tions, equal treatment of products. These are enforced by the CCPC ComReg decision are met. in Ireland. To the extent that a digital platform provides an ECS or ECN (or Data protection both), it would be subject to the authorisation regime set out in the 12 Is there a specific data protection regime applicable to the Authorisation Regulations, which confers a general right to provide communications sector? ECN or ECS (or both) subject to certain conditions. The communications sector is subject to the general Irish data protec- Next-Generation-Access (NGA) networks tion regime as set out in the Data Protection Act 2018. 11 Are there specific regulatory obligations applicable to The Communications (Retention of Data) Act 2011 sets out a NGA networks? Is there a government financial scheme to specific regime for the retention of certain communications data for, promote basic broadband or NGA broadband penetration? inter alia, the investigation, detection and prosecution of criminal offences. A regime is also in place for the interception of commu- In November 2018, ComReg issued a decision concluding that eir nications by the Irish police force and the Defence Forces. The CJEU continued to hold SMP in the wholesale broadband access market recently found that Directive 2006/24/EC (Data Retention), the basis and, as such, imposed a series of remedies on eir. Such remedies for the Communications (Retention of Data) Act 2011, was invalid. As a are designed to ensure telecoms operators have access to eir’s result of the CJEU decision, no specific legal act at the EU level obliges wholesale services, including the imposition of price control obliga- Ireland to maintain a data retention regime in place. In December 2018, tions concerning the fibre-to-the-cabinet wholesale market through the Irish High Court ruled that the 2011 Act is incompatible with EU and

60 Telecoms & Media 2021 © Law Business Research 2021 Matheson Ireland

European Convention on Human Rights law, and the Supreme Court of general data protection rules to each new way in which personal data recently referred this issue to the European Court of Justice. While the are collected, stored, used and analysed. 2011 Act formally remains law in Ireland, the government has published For instance, current data protection law requires that personal the General Scheme of the Communications (Retention of Data) Bill data is only used for specific purposes, which, naturally, restricts the 2017 designed to replace the 2011 Act. trend in big data to make use of data in previously unknown ways. This The 2011 Privacy Regulations from the EU electronic communi- means that big-data systems should ideally be set up with this purpose cations reform package previously mention also apply pending the limitation in mind, with each new use of personal data generating its own publication of the proposed ePrivacy Regulation. risk profile. There have been discussions around the use of techniques On 25 May 2018, Regulation (EU) 2016/679 (General Data Protection to effectively anonymise or pseudonymise personal data as a solution Regulation) (GDPR) came into force across the European Union and to this, so that the data falls outside the scope of data protection rules, is implemented in Ireland through the Data Protection Act 2018. This although achieving this can sometimes be difficult. follows a two-year implementation period following which the GDPR While this may somewhat limit the ability to commercially exploit will replace existing Directive 95/46/EC (Data Protection). The GDPR big data, the enforcement of data protection law in Ireland is not static aims to harmonise data protection across the EU and will affect how the and is adaptable to each new innovation. The Irish Data Protection communications sector operates. Commissioner takes a pragmatic approach to the treatment of big data and considers meaningful consultation with organisations operating in Cybersecurity this space, including the many leading multinational technology compa- 13 Is there specific legislation or regulation in place concerning nies based in Ireland, as essential to this strategy. cybersecurity or network security in your jurisdiction? The Edward Snowden allegations of large-scale access by US authorities of EU citizens’ personal data have brought the treatment The Criminal Justice (Offences Relating to Information Systems) Act of big data to the forefront of political discussion in Europe, including 2017 was the first piece of national legislation specifically relating to Ireland. Significant changes are likely to come about as a result of the cybercrime and is designed to modernise the Irish framework relating GDPR, implemented in Ireland by the Data Protection Act 2018. to such crimes (previous legislation referred to ‘unlawful use of a Concerning big data, article 22 of the GDPR provides that: computer’ that did not adequately address problems facing current society). This legislation introduced several new offences such as: the data subject shall have the right not to be subject to a decision • accessing an information system without lawful authority; based solely on automated processing, including profiling, which • interfering with an information system without lawful authority to produces legal effects concerning him or her or similarly signifi- intentionally hinder or interrupt its functioning; cantly affects him or her. • interfering with data without lawful authority; • intercepting the transmission of data without lawful authority; and Section 57 of the Data Protection Act 2018 outlines the rights of the • use of a computer, password, code or data for the commission of individual concerning automated decision making, implementing article any of the above offences. 22 of the GDPR. As such, automated processing is only permitted with the express consent of the individual, when necessary for the perfor- The DECC published an updated National Cybersecurity Strategy in mance of a contract or where authorised by EU or EU member state December 2019. Objectives of the strategy include: law. Also, where automated processing is permitted, measures must be • to continue to improve the ability of the state to respond to and in place to protect the individual (eg, the right to present their point of manage cybersecurity incidents; view). Automated processing can apply to sensitive personal data (as • to identify and protect critical national infrastructure by ensuring outlined under the Data Protection Act 2018) based on express consent that essential services have appropriate cybersecurity incident or reasons of substantial public interest. response plans; Many of the big data companies have important locations for their • to improve the resilience and security of public sector IT systems; businesses in Ireland. The Data Protection Commissioner (DPC) is tasked • to invest in educational initiatives to prepare the workforce for with investigating breaches of data regulation by these companies where advanced IT and cybersecurity careers; such breaches occur in this jurisdiction. The DPC opened an inquiry into • to raise awareness of the responsibilities of businesses around Facebook in 2019 on how it stored user login data, and in 2018 the DPC securing their networks, devices and information; and investigated Facebook for non-compliance with its obligation under the • to invest in research and development in cybersecurity in Ireland. GDPR to implement technical and organisational measures to ensure the security and safeguarding of the personal data it processes. In common with similar bodies in other EU member states, the National Cyber Security Centre (NCSC) has also steadily moved towards a Data localisation more proactive approach across a range of areas. The provisions of 15 Are there any laws or regulations that require data to be Directive (EU) 2016/1148 (Network and Information Security) have been stored locally in the jurisdiction? used to develop a quasi-regulatory approach for critical infrastructure providers, an approach that operates in tandem with the NCSC’s There are no laws or regulations that require data to be stored locally in existing and ongoing work. Ireland. The Data Protection Act 2018 not detail specific security measures that a data controller or data processor must have in place, although the Big data Authorisation Regulations 2011 detail some requirements specific to the 14 Is there specific legislation or regulation in place, and have electronic communications services sector. Instead, the Data Protection there been any enforcement initiatives in your jurisdiction, Act 2018 places an obligation on data controllers to ensure that data is addressing the legal challenges raised by big data? processed in a manner that ensures ‘appropriate security of the data’. The measures used by the data controller must ensure that a level of No new data protection legislation has been introduced in Ireland to deal security is provided that is proportionate to the harm that may result specifically with big data, so the debate has focused on the application from destruction, loss, alternation or disclosure of the data. www.lexology.com/gtdt 61 © Law Business Research 2021 Ireland Matheson

Data controllers and data processors are also obliged to ensure sets out the regulatory framework for the media and broadcasting that their staff and ‘other persons at the place of work’ are aware sector in the state. The Commission for Communications Regulation’s of security measures and comply with them. The legal obligation to (ComReg) role in respect of the broadcasting sector is limited to the keep personal data secure applies to every data controller and data issuing of licences under the Wireless Telegraphy Acts, in respect of processor, regardless of size. wireless equipment and assignment of required radio spectrum. The Section 96 of the Data Protection Act 2018 specifies conditions that Broadcasting Act and regulator are due to be modernised and changed must be met before personal data may be transferred to third coun- in legislation expected to be published in 2021 – this will incorporate tries. Organisations that transfer personal data from Ireland to third revised Directive 2010/13/EU (Audiovisual Media Services) into Irish countries (ie, places outside of the European Economic Area) need law (Ireland missed the transposition deadline in September 2020). to ensure that the country in question provides an adequate level of data protection. Some third countries have been approved for this Ownership restrictions purpose by the EU Commission. The adequacy decision of the European 18 Do any foreign ownership restrictions apply to media Commission that underpinned the US Safe Harbour arrangement has services? Is the ownership or control of broadcasters now been invalidated by a decision of the CJEU of 6 October 2015 otherwise restricted? Are there any regulations in relation (Case C-362/14). Consequently, it is no longer lawful to make transfers to the cross-ownership of media companies, including radio, based on the EU–US Safe Harbour framework. This was replaced by television and newspapers? the EU–US Privacy Shield, which imposes stronger obligations on US companies to take measures to protect personal data. Non-EU applicants for broadcasting contracts are required to have their place of residence or registered office within the European Union Key trends and expected changes or as otherwise required by EU law. 16 Summarise the key emerging trends and hot topics in The framework for the ownership and control policy of the BAI is communications regulation in your jurisdiction. set out in the Broadcasting Act, which requires the BAI, in awarding a sound broadcasting contract or television programme service contract In Electronic Communications Strategy Statement 2019–2021, ComReg (or consenting to a change of control of the holder of a broadcasting identified the main trends it considers will both shape the sector and contract), to have regard, inter alia, to the desirability of allowing any pose regulatory challenges over this period. These are: person or group of persons to have control of or substantial interests • the continued evolution of fixed and mobile networks: future elec- in an ‘undue number’ of sound broadcasting services, or an ‘undue tronic communications networks such as, for example, 5G where amount’ of communications media in a specified area. The BAI has standards are still evolving may potentially have differing regu- also issued an ownership and control policy, setting out the regula- latory requirements and it is as yet unclear what the effective tory approach that the BAI will take and the rules that will be enforced regulation of these evolving networks will entail; regarding ownership and control of broadcasting services. The • an increase in connected ‘things’: while the current electronic policy will be used by the BAI to assess applications for broadcasting communications ecosystem focuses primarily on how people contracts and requests for variations to ownership and control struc- connect, the next wave of innovation is anticipated to be concerning tures of contract holders. connected ‘things’, ie, the internet of things; Media mergers must be notified to both the Irish Competition • changing regulatory framework: as part of a broader digital and Consumer Protection Commission (CCPC) and the Minister for strategy in Europe, the regulatory framework for electronic Communications. The CCPC is responsible for carrying out the substan- communications introduced in 2002 (and updated in 2009) is tive competition review to determine whether the merger is likely to under revision; give rise to a substantial lessening of competition. It is the role of • non-uniform end-user experiences: accessibility and connectivity the Minister for Communications to assess ‘whether the result of the have not evolved uniformly, and the experience of end users has media merger will not be contrary to the public interest in protecting not always kept pace with changes in expectations; the plurality of the media in the State’ and this includes a review of • expanding set of related markets relevant to the regulation of ‘diversity of ownership and diversity of content’. The Competition electronic communications: effective regulation requires an under- Acts provide for a set of ‘relevant criteria’ by which the Minister for standing of the complex electronic communications ecosystem, Communications must assess whether the media merger will be likely especially when electronic communications are an enabler of to affect the plurality of the media in the state. In particular, the relevant innovation in related markets; and criteria include considering, inter alia, the undesirability of allowing one • mobile coverage is an issue of national importance as highlighted undertaking to hold significant interests within a sector of the media by its inclusion as a priority in the programme for government, business, the promotion of media plurality and the adequacy of the and the formation of the Mobile Phone and Broadband Taskforce. existing state-funded broadcasters to protect the public interest in a plurality of the media in the state. The Department of Communications, The implementation of the EECC will be the biggest change to the Irish Climate Action and Environment published Media Merger Guidelines telecommunications framework in 2021. in May 2015. In the interests of transparency, the Minister publishes summary details of the rationale for clearing media mergers. MEDIA Licensing requirements Regulatory and institutional structure 19 What are the licensing requirements for broadcasting, 17 Summarise the regulatory framework for the media sector in including the fees payable and the timescale for the your jurisdiction. necessary authorisations?

The broadcasting sector in Ireland is regulated by the Broadcasting The BAI is responsible for the licensing of the national television Act 2009 (as amended) (the Broadcasting Act), which established a service, and content on digital, cable, multimedia displays and satel- content regulator, the Broadcasting Authority of Ireland (BAI) and lite systems. The licensing of content on these systems is an ongoing

62 Telecoms & Media 2021 © Law Business Research 2021 Matheson Ireland process with no timeframe for applications, no competitive licensing which Irish radio and television stations must comply when it comes to process and one-off application fees (these depend on the licence being airing advertising, sponsorship, product placement and other forms of acquired but are typically less than €2,000). commercial communications. The BAI is responsible for the licensing of independent radio The Broadcasting Act does not apply to broadcast services that broadcasting services in Ireland and Part 6 of the Broadcasting Act are provided through the internet or to non-linear services, but this will sets out the mechanism by which the BAI shall undertake the licensing change following the implementation of the revised Audiovisual Media process for commercial, community temporary and institutional Services Directive. radio services. A voluntary self-regulatory code is also in operation and is administered by the Advertising Standards Authority of Ireland (ASAI), which Foreign programmes and local content requirements sets out guidelines for advertising concerning a range of topics including 20 Are there any regulations concerning the broadcasting food, financial services and business products. This code applies to of foreign-produced programmes? Do the rules require a online advertising. On 1 March 2016, the new ASAI Code of Standards for minimum amount of local content? What types of media fall Advertising and Marketing Communications in Ireland came into effect. outside this regime? The updated Code features new sections on e-cigarettes and gambling and revised sections on food (including rules for advertisements The European Communities (Audiovisual Media Services) Regulations addressed to children), health and beauty and environmental claims. 2010 (SI 258/2010) and the European Communities (Audiovisual Media Further, broadcasters should observe relevant national and EU Services) (Amendment) Regulations 2012 (SI 247/2012) (the AVMS rules on advertising of specific types of products and services (eg, Regulations) implement the Audiovisual Media Services Directive. The alcohol, tobacco, health foods, airfares, etc) and consumer protection AVMS Regulations provide that broadcasters, where practicable and by rules on types of advertising practice permitted (eg, consumer informa- appropriate means, must progressively reserve for European works tion requirements, misleading information rules, etc). a majority proportion of their transmission time (excluding the time appointed to news, sporting events, games, advertising and teletext Must-carry obligations services) having regard to their various public responsibilities. 22 Are there regulations specifying a basic package of In 2018, both the European Parliament and Council approved programmes that must be carried by operators’ broadcasting updates to the Audiovisual Media Services Directive, and this will lead to distribution networks? Is there a mechanism for financing the changes to the Irish regime following implementation. Draft legislation costs of such obligations? has been prepared by the Department of Environment, Climate Action and Communications (DECC) (implementing the revised directive and The Broadcasting Act requires ‘appropriate network providers’ to including ‘online harm’ additions) and this is being reviewed through ensure, if requested, the retransmission by or through their appropriate the normal Irish legislative process. One fundamental change being network of each free-to-air television service provided for the time being proposed is the creation of a new regulator, the Media Commission, to by RTÉ, TG4 and TV3’s free-to-air service. An appropriate network is regulate both linear and non-linear broadcasting. defined as an electronic communications network provided by a person, The AVMS Regulations outline that, where practicable and by the ‘appropriate network provider’, that is used for the distribution or appropriate means, broadcasters must progressively reserve at least 10 transmission of broadcasting services to the public. The appropriate per cent of their transmission time (excluding the time applied to news, network provider is not permitted to impose a charge for the above- sports events, games, advertising and teletext services) for European mentioned channels. works created by producers who are independent of broadcasters, or A public service broadcasting charge was suggested by previous reserve 10 per cent of their programming budget for European works governments as a means of funding public broadcasting in light of the that are created by producers who are independent of broadcasters, changing ways that viewers now access public service broadcasting. having regard to its various public responsibilities. However, such plans have been shelved and, the current Minister for The AVMS Regulations require EU member states to ensure that Communications recently announced that there was little chance of this on-demand audiovisual media services also promote European works; being introduced and the government would not introduce the neces- however, quotas for European works are not imposed on non-linear sary enabling legislation. audiovisual services. Regulation of new media content Advertising 23 Is new media content and its delivery regulated differently 21 How is broadcast media advertising regulated? Is online from traditional broadcast media? How? advertising subject to the same regulation? The Internet Services Providers Association of Ireland (ISPAI) has The BAI is currently tasked with the development, review and revision responsibility for supervising the ongoing evolution of self-regulation of of codes and rules concerning advertising standards to be observed the internet in Ireland and has set out guidelines in its Code of Practice by broadcasters, and consideration of and adjudication on complaints and Ethics (the Code) that ISPAI members should take into account concerning material that is broadcast, including advertising. The when operating. Broadcasting Act provides that advertising codes must protect the In its statement of policy, the ISPAI acknowledges that its members interests of the audience and in particular, any advertising relating to must observe their legal obligation to remove illegal content when matters of direct or indirect interest to children must protect the inter- informed by organs of the state or as otherwise required by law. The ests of children and their health. By way of example, the BAI has issued general requirements of the Code issued by the ISPAI include a require- General and Children’s Commercial Communications Codes, including ment on all members to use best endeavours to ensure that services rules to be applied to the promotion of high fat, salt and sugar foods to (excluding third-party content) and promotional material do not contain children. Further rules are set out in the AVMS Regulations concerning anything that is illegal or is likely to mislead by inaccuracy, ambiguity, ‘audiovisual commercial communications’ on on-demand services. The exaggeration, omission or otherwise. They must also ensure that BAI’s General Commercial Communications Code sets out the rules with services and promotional material are not used to promote or facilitate www.lexology.com/gtdt 63 © Law Business Research 2021 Ireland Matheson

any practices that are contrary to Irish law, nor must any services A ‘media business’ means the business (whether all or part of an contain material that incites violence, cruelty, racial hatred or prejudice undertaking’s business) of: or discrimination of any kind. • the publication of newspapers or periodicals consisting substan- Members’ internet service providers are also required to tially of news and comment on current affairs, including the register with www.hotline.ie, which is a notification service to facili- publication of such newspapers or periodicals on the internet; tate the reporting of suspected breaches under the Child Trafficking • transmitting, retransmitting or relaying a broadcasting service; and Pornography Act 1998 (as amended by the Child Trafficking and • providing any programme material consisting substantially of Pornography (Amendment) Act 2004) and the removal of illegal material news and comment on current affairs to a broadcasting service; or from internet websites. • making available on an electronic communications network any The On-Demand Audiovisual Media Services Code of Conduct is an written, audiovisual or photographic material, consisting substan- industry developed code that covers on-demand audiovisual services in tially of news and comment on current affairs, that is under Ireland, addressing topics such as advertising, content standards and the editorial control of the undertaking making such material dispute resolution. available. The regulation of new media content will change following the implementation of the revised Audiovisual Media Services Directive Media mergers are notifiable to both the CCPC and the Minister for and the creation of the new regulator, the Media Commission. This will Communications (regardless of the turnover of the undertakings include expanding existing rules on content and advertising to new concerned) to assess whether the media merger would be contrary to media and on-demand services and video-sharing platforms for the the public interest in protecting the plurality of the media in the state. first time. The Competition Acts provide for a set of ‘relevant criteria’ by which the Minister for Communications must assess whether the media merger Digital switchover will be likely to affect the plurality of the media in the state. In particular, 24 When is the switchover from analogue to digital broadcasting the relevant criteria include considering, inter alia, the undesirability of required or when did it occur? How will radio frequencies allowing one undertaking to hold significant interests within a sector of freed up by the switchover be reallocated? the media business, the promotion of media plurality and the adequacy of the existing state-funded broadcasters to protect the public interest in The digital switchover occurred on 24 October 2012. The 800MHz band a plurality of the media in the state. The BAI may play a role in assessing had been used for analogue terrestrial television services. This spec- media plurality should the transaction be referred to a Phase II process trum was auctioned off (along with the 900MHz and 1,800MHz spectrum) by the Minister for Communications. in autumn 2012 for use in electronic communications services (ECSs). In terms of steps the authorities may require companies to take as a result of a media merger review, the Minister for Communications may Digital formats determine that the media merger be put into effect, determine that the 25 Does regulation restrict how broadcasters can use their media merger be put into effect subject to conditions or determine that spectrum? the media merger may not be put into effect. The DECC’s Media Merger Guidelines guide the media-merger As required by the legislative framework, ComReg has moved towards a process and the DECC now publishes information regarding its process position where it will issue licences on a technology and service-neutral and a summary of each media merger determination in the interests of basis and that new rights of use will issue on a service and technology transparency. There is an ongoing review of the media merger regime neutral basis. For example, ComReg awarded the 3.6GHz spectrum band by the DECC. in 2017, following a lengthy consultation process on a service and tech- In June 2019, the BAI published two new documents: nology neutral basis (ie, holders of the new rights of use may choose • a policy on Media Plurality setting out how the BAI will support to provide any service capable of being delivered using the assigned media plurality in the future. It sets out a definition for media spectrum). For instance, they could distribute television programming plurality, outlines why media plurality is important, details policy content, subject to complying with the relevant technical conditions and objectives and outlines the measures the BAI takes and will take to with any necessary broadcasting content authorisations or they could promote and support media plurality in Ireland; and adopt some other use. • the Ownership and Control Policy, which will be used by the BAI ComReg may, through licence conditions or otherwise, provide for to assess requests for changes to the ownership and control of proportionate and non-discriminatory restrictions to the types of radio existing broadcasting services. The policy provides guidance and network or wireless access technology used for ECSs where this is rules for the BAI when considering the desirability of allowing any necessary (eg, to avoid harmful interference and safeguard the efficient person, or group of persons, to have control of, or substantial inter- use of spectrum). ests in, an undue number of media services in the Irish state.

Media plurality Key trends and expected changes 26 Is there any process for assessing or regulating media 27 Provide a summary of key emerging trends and hot topics in plurality (or a similar concept) in your jurisdiction? May the media regulation in your country. authorities require companies to take any steps as a result of such an assessment? There has been a marked increase in the number of media mergers in Ireland, a trend that can be seen across Europe as traditional media The Competition Acts 2002–2017 provide for special additional rules for outlets need to consolidate to ensure continued survival in a difficult ‘media mergers’ (ie, a merger or acquisition in which two or more of the environment. There has only been one Phase II media merger in the undertakings involved carry on a media business in the state, or that Ireland, which involved the proposed acquisition of the Celtic Media one or more of the undertakings involved carries on a media business Group by Independent News & Media and was referred to the BAI for a in the state and one or more of the undertakings involved carries on a full media-merger examination (the first such media merger in the state). media business elsewhere). No ministerial decision was made by the Minister for Communications

64 Telecoms & Media 2021 © Law Business Research 2021 Matheson Ireland as the parties terminated the transaction during the lengthy process by mutual consent. The primary legislative focus for the Department of Communications will be the implementation of the revised Audiovisual Media Services Directive, which may significantly impact on how non-traditional media companies and broadcasters operate in Ireland through enhanced regulation and potentially introducing a licensing regime for the first time. Concerning traditional broadcasters, it remains to be seen whether Ireland will impose financial contributions (direct investments or levies payable to a fund) on broadcasters and providers who are targeting Helen Kelly their national audiences from other EU member states (the revised [email protected] legislation leaves this decision to each EU member state’s discretion). Simon Shinkwin [email protected] REGULATORY AGENCIES AND COMPETITION LAW Kate McKenna [email protected] Regulatory agencies 28 Which body or bodies regulate the communications and media sectors? Is the communications regulator separate 70 Sir John Rogerson’s Quay from the broadcasting or antitrust regulator? Are there Dublin 2 mechanisms to avoid conflicting jurisdiction? Is there a Ireland Tel: +353 1 232 2000 specific mechanism to ensure the consistent application of Fax: +353 1 232 3333 competition and sectoral regulation? www.matheson.com

The Broadcasting Authority of Ireland (BAI) is currently responsible for the regulation of the broadcasting and audiovisual content sector. The Irish Competition and Consumer Protection Commission public bodies in judicial review proceedings, rather than the merits of (CCPC) is responsible for administering and enforcing the Competition a decision. Acts 2002–2017 across all sectors. Any other procedures available to remedy the matter must usually The Commission for Communications Regulation (ComReg) is be exhausted before bringing judicial review proceedings. responsible for the regulation of the electronic communications sector A decision of the BAI may be challenged by way of judicial review and ComReg has co-competition powers with the CCPC that enable it in the High Court. Also, a decision by the BAI to terminate or suspend to pursue issues arising in the electronic communications sector under a contract made under Part 6 or Part 8 of the Broadcasting Act may be competition law and to take action in respect of anticompetitive agree- appealed by the holder of the contract to the High Court under section ments and abuse of dominance. ComReg and the BAI are each party to 51 of the Broadcasting Act. a cooperation agreement with the CCPC to facilitate cooperation, avoid A decision by the Minister for Communications in respect of a media duplication and ensure consistency between the parties insofar as their merger must be brought in the High Court not later than 40 working activities consist of, or relate to, a competition issue. days from the date of determination. Alternatively, this period may be extended by the High Court if it considers that there is a substantial Appeal procedure reason why the application was not brought in the period and it is just to 29 How can decisions of the regulators be challenged and on grant leave to appeal outside the period. what bases? Competition law developments A decision of ComReg may either be challenged by way of judicial review 30 Describe the main competition law trends and key merger or for decisions made under the Regulatory Framework a merits-based and antitrust decisions in the communications and media appeal under the European Communities (Electronic Communications sectors in your jurisdiction over the past year. Networks and Services) (Framework) Regulations 2011 (SI 333/2011) (the Framework Regulations) in the High Court. Under the Framework There has been a marked increase in the number of media mergers noti- Regulations, the appeal must be brought by a user or undertaking that fied since the 2014 media merger regime was implemented. Thirty-two is affected by the decision and must be lodged within 28 calendar days media mergers have been notified and cleared by the CCPC and the of the date after the user or undertaking has been notified of the deci- Minister (with an additional two reviewed by the Minister following sion. An appeal can be brought based on law or errors of fact. Where the European Commission clearance). appeal is made to the High Court, either party may seek for the matter Some notable media mergers include: to be transferred to the Commercial Court, which is a specialist part of • the 2016 proposed acquisition by Independent News & Media of the High Court that generally hears appeals within six months of the seven regional newspapers that made up the Celtic Media Group. date the appeal is lodged. Lodgment of an appeal against a decision of No ministerial decision was made as the parties terminated the ComReg does not automatically stay that decision unless an application transaction by mutual consent during the extended merger process; for a stay or interim relief has been made. • the 2017 clearance of the 21st Century Fox and Sky merger with no Judicial review proceedings should be launched at the earliest commitments; and opportunity or in any event within three months from the date when • the 2018 clearance of the Trinity Mirror and Northern & Shell grounds for the application first arose (eg, the date of a ComReg deci- merger with binding CCPC commitments. sion (although this can be extended by the court if it considers that there is good and sufficient reason to do so)). The Irish courts have jurisdic- The Irish Times notified the CCPC of its intention to purchase the Irish tion to examine the procedural fairness and lawfulness of decisions of Examiner (the effect of which would reduce the number of reputable www.lexology.com/gtdt 65 © Law Business Research 2021 Ireland Matheson

daily broadsheets from three to two) and received Phase II CCPC clearance on 24 April 2018. In June 2018, the Minister for Communication decided that the proposed merger would not adversely affect the plurality of media in Ireland. The Minister noted that, because of the financial position of the target company, the proposed transaction may in fact preserve the diversity of content and thus protect media plurality in the state.

Although there has been no covid-19 legislation or regulations implemented in 2020 or 2021 in the media sector, several measures have been implemented in the telecoms sector including: • the temporary release of 5G spectrum (the subject of the upcoming spectrum award) by ComReg to three mobile network operators to allow the use of these bands to relieve the additional pressure on their networks; and • industry wide commitments and agreement between operators and the Minister for Communications concerning the continued provision of services to consumers during the covid-19 crisis. This was signed by all the major consumer-facing telecoms service providers including BT Ireland, eir, Pure Telecom, Sky Ireland, Tesco Mobile Ireland, Three Ireland, Virgin Media Ireland and Vodafone Ireland.

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Alessandra Bianchi Simmons & Simmons LLP

COMMUNICATIONS POLICY General authorisations have a maximum validity of 20 years and may be renewed. Regulatory and institutional structure All operators holding a general authorisation are obliged to 1 Summarise the regulatory framework for the communications register with the Register for Communications Operators (ROC) kept by sector. Do any foreign ownership restrictions apply to the Authority. communications services? General authorisations are subject to payment of an annual contribution to the Ministry, whose amount is indicated in the Electronic The primary legislation governing the communication sector in Italy Communication Code based on the service currently provided by the is Legislative Decree No. 259/2003 (the Electronic Communications operator and the relevant extension thereof. Code) as a result of EU directives from 2002 regulating the electronic communications networks and services, the authorisation of electronic Flexibility in spectrum use communications networks and services, the interconnection of elec- 3 Do spectrum licences generally specify the permitted use tronic networks and user rights. or is permitted use (fully or partly) unrestricted? Is licensed Also, the Italian Communications Authority (the Authority) issues spectrum tradable or assignable? resolutions as secondary legislation containing detailed rules in the offering of electronic communication services and networks. Indeed, The spectrum licences specify the permitted spectrum use. Under the Authority, established by Law No. 249/1997, is a regulatory agency article 14 of the Electronic Communications Code, the Ministry prepares designed to actively promote the integration between the telecommu- the master plan for the use of spectrum licences, while the Authority is nication and media markets and to supervise and monitor the markets. in charge of the allocation plan. Moreover, the Data Protection Authority issues resolutions The last most up-to-date master plan is Ordinary Supplement No. containing specific obligations for operators in the storage, processing 49, published in Italian Official Gazette No. 244 on 19 October 2018. It and use of personal data information. provides the principles for the allocation of the frequencies between 0 The Ministry of Economic Development – Communications and 3,000GHz to each type of service (eg, fixed, mobile, satellite or radio Department (the Ministry) is in charge, inter alia, of issuing authorisa- navigation), the authorities to which the frequencies shall be required tions and allocating the spectrum. (eg, the Ministry of Economic Development and the Ministry of Defence) A general authorisation is required to offer electronic communica- and the frequency bands and (if any) the international provision appli- tions services in Italy. Such authorisation can be issued only to: cable. The allocation plan has instead been adopted by the Authority on • entities with a permanent establishment in Italy or a country within 7 February 2019 with resolution 39/19/CONS. the European Economic Area; Individual rights of spectrum use are granted within the limits set • member states of the World Trade Organization; and out in the master plan, and any holders of such rights shall be compliant • countries granting Italian citizens reciprocal rights of access with the spectrum use allocated. to the relevant telecoms activity (article 25 of the Electronic Article 14-ter of the Electronic Communications Code allows the Communications Code). transfer of rights relating to radiofrequency spectrum to comparable operators or providers, with prior notification to the Authority and Authorisation/licensing regime the Ministry. 2 Describe the authorisation or licensing regime. Ex-ante regulatory obligations Under articles 25 and 26 of the Electronic Communications Code, an 4 Which communications markets and segments are subject to operator that intends to provide electronic communications networks ex-ante regulation? What remedies may be imposed? and services or to establish and operate network equipment at a point of presence in Italy shall apply with the Ministry for the issuance of a According to EU Recommendation No. 879 of 17 December 2007, the general authorisation that is required to offer electronic communica- electronic communications sector that is subject to ex-ante regulation tions services in Italy. can be divided into two groups: The request must describe the services to be rendered and identi- • markets for fixed networks (eg, services for the access to new fication data about the applicant. generation networks); and Starting from the filing of the relevant request, the operator is • markets for interconnection services on fixed and mobile networks immediately entitled to run the activity. However, the Ministry has a 60 (eg, interconnection services on fixed networks). days term (from filing) to deny the authorisation. If the Ministry does not respond within this deadline, the authorisation is definitively issued. www.lexology.com/gtdt 67 © Law Business Research 2021 Italy Simmons & Simmons LLP

EU Recommendation No. 710 of 9 October 2014 has modified the number services, while keeping their own mobile number (mobile number and list of markets that are subject to ex-ante regulation. In particular, portability). The relevant inter-operator procedures are regulated by the latest Recommendation included fixed and mobile call termination Resolution No. 339/18/CONS. The user is not actively involved in the markets in the list, as well as wholesale broadband access markets. transfer procedure. It is simply requested to subscribe to an offer with a new operator and communicate to the latter the transfer code. Thus, the Structural or functional separation user shall not even communicate the withdrawal to the former operator 5 Is there a legal basis for requiring structural or functional as the new operator is in charge of dealing with the transfer proce- separation between an operator’s network and service dure, including liaising with the former operator to terminate the user’s activities? Has structural or functional separation been contractual relationship. introduced or is it being contemplated? Customer terms and conditions Under article 16 of the Electronic Communications Code, companies with 8 Are customer terms and conditions in the communications exclusive or special rights for public communication networks instal- sector subject to specific rules? lation or communication services provision – in Italy or even abroad – shall provide networks or electronic communication services acces- Consumers are generally protected by the Italian Legislative Decree sible to the public only through their subsidiaries or affiliated companies No. 206/2005 (Consumer Code) both from a contractual point of view (eg, structural separation). This limitation does not apply to companies (including off-premises agreements) and against unfair business-to- that generate an annual turnover of less than €50 million with the provi- consumer commercial practices (including teleselling practices). sion of electronic communication networks or services in Italy. Specific rules are further provided by the Italian Legislative Functional separation is instead provided by article 50-bis of the Decree No. 70/2003 (implementing Directive 2000/31/EC) on informa- Electronic Communications Code as an exceptional measure to be tion society services and electronic commerce, which, among others, implemented if the Authority assesses that other available remedies includes specific provisions on the information to be provided to have failed to achieve an effective competition. If the Authority intends consumers when dealing with electronic agreements. to impose a functional separation, it shall notify its proposal to the Also, the Electronic Communications Code provides for specific European Commission, explaining the grounds of such proposal. terms and conditions to be included in communications contracts, such The Electronic Communications Code also provides for a specific as the services provided, the minimum service level, the procedures procedure for voluntary separation by vertically integrated companies. used by the company for measuring the network traffic. Under article 50-ter of the Electronic Communications Code, operators holding a significant market power may adopt a structural separation of Net neutrality some of their access network assets to offer wholesale services to retail 9 Are there limits on an internet service provider’s freedom to providers, including their retail units. control or prioritise the type or source of data that it delivers? Are there any other specific regulations or guidelines on net Universal service obligations and financing neutrality? 6 Outline any universal service obligations. How is provision of these services financed? Net neutrality is regarded as a fundamental principle recognised by the Authority to ensure democratic internet service provision. Net neutrality The services that must be made available to end users and must be is regulated by Regulation (EU) 2015/2120, and in Italy, the competent provided by all operators as universal service obligations are: Authority issued specific Resolution No. 348/18/CONS concerning the • access to end users from a fixed workstation (article 54 of the net-neutrality regulation. Several legislative discussions have resulted Electronic Communications Code); in the Declaration of Internet Rights of 14 July 2015 approved by the • public pay telephones (article 56); and Italian parliament, a document consisting of 14 sections and conceived • special measures for disabled and low-income users (articles 57 as a guideline to drive an evolutionary interpretation of the existing and 59.2 of the Electronic Communications Code). provisions and to serve for any legislative developments. Article 4 of Law No. 167/2017, which introduces article 16-bis of the The Authority identifies one or more undertakings in charge of providing Electronic Communications Code, raised the maximum penalty that can the universal service at an accessible price. be imposed by the Authority, in the case of a violation of net neutrality, If the Authority finds that the provision of the universal services to a limit of €2.5 million. by the identified undertaking results in an unfair burden to the latter In compliance with the Body of European Regulators for Electronic upon the undertaking’s request, it will share the net costs deriving from Communications’ (BEREC) guidelines, the Authority published the 2020 the provision of the universal services among providers of electronic Report including the activities carried out concerning net neutrality. The communications networks and services using the ad hoc fund estab- report reveals that many inspective and monitoring actions have been lished by the Ministry (article 62 of the Electronic Communications Code). taken on the commercial practices adopted for the provision of telematics services on the Italian market, by gaining information both directly Number allocation and portability from the major ISPs and through hearings with the interested persons. 7 Describe the number allocation scheme and number The resolution concerning the abolition of net neutrality in the portability regime in your jurisdiction. United States, taken by the Federal Communication Commission on 14 December 2017, does not seem to have influenced the activity of the With Resolution No. 274/07/CONS (article 6 et seq), the Authority has Italian legislator yet. On the other hand, the advent of 5G connectivity set the standards for activation and migration of fixed number proce- may be a game-changer as it will be necessary to understand if the dures and pure number portability (it will take place without being innovative capacity of the network is inextricably linked to its free acces- accompanied by the transfer of physical access resources). sibility or not. Under article 80 of the Electronic Communications Code, users have the right to change operator for mobile phone, voice and data

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Platform regulation European target 2020’, allocating €3 billion to the project, subdividing the 10 Is there specific legislation or regulation in place, and have funds to the regions, according to their population, and strengthening the there been any enforcement initiatives relating to digital management of the project. platforms? The intervention is intended to build a publicly owned network that will be made available to all operators willing to provide services in No specific legislation or regulations have yet been enacted in Italy favour of the population and undertakings. concerning digital platforms. However, preparatory works for a law project have been carried out in recent years and a draft law concerning Data protection the regulation of digital platforms for the sharing economy was presented 12 Is there a specific data protection regime applicable to the to the Italian Chamber of Deputies on 27 January 2016. The draft law communications sector? began its parliamentary procedure in January 2016, denominated as Act 3564 on ‘Discipline of digital platforms for the sharing of goods and The provisions applicable to the communications sector are contained services and provisions for the promotion of the sharing economy’ and in the Data Protection Code and the resolutions of the Data Protection is still under examination by the competent parliamentary commission. Authority. In particular, articles 121 to 132, a quarter of the Data Protection In any case, the following legislation may apply to various aspects of Code, apply to the processing of personal data connected to the provision the digital platforms: of electronic communication services accessible to the public on public • the e-commerce regulation provided by the Legislative Decree communications networks. No. 70/2003; The retention of data in the terminal equipment of a user or the • the Consumer Code and the data protection rules provided access to information already stored is permitted only on condition that by GDPR; and the user has given his or her consent after being informed in a simpli- • Legislative Decree 196/2003, as modified by Legislative Decree No. fied manner. This does not prohibit any technical archiving or access to 101/2018 (Data Protection Code). information that has already been archived if it is solely aimed at transmitting a communication over an electronic communication network, or Finally, Regulation (EU) 2019/1150, in force in EU member states since as strictly necessary for the provider of an information society service July 2020, outlines the relationship between business users of online explicitly requested by the user to provide this service. Traffic data intermediation services (marketplaces) and search engines. concerning users processed by the provider of a public communications The purpose of this Regulation is to guarantee greater transparency network or an electronic communication service accessible to the public in the contractual terms applied to business users by, among others, the are erased or anonymised when they are no longer necessary for the big players of the network. The target of the Regulation is the relation- transmission of electronic communications. ship of dependence that business users have towards these large online The provider of an electronic communication service accessible players to offer their goods and services to consumers, which indirectly to the public may process user data to the extent and for the duration affects consumers who may not be able to enjoy balanced offers. The necessary for the marketing of electronic communication services or Regulation is directly applicable in EU member states and, so far, Italy has the provision of value-added services, only if the user to whom the data issued no specific rules regarding its implementation. By 13 January 2022, relates has previously expressed their consent, which is however revo- and subsequently every three years thereafter, the European Commission cable at any time. shall evaluate this Regulation and report to the European Parliament, the The processing of personal data relating to traffic is allowed only to Council and the European Economic and Social Committee. subjects authorised to process and operate under the direct authority of the provider of the electronic communication service accessible to the Next-Generation-Access (NGA) networks public or, as the case may be, of the provider of the public communica- 11 Are there specific regulatory obligations applicable to NGA tions network and that deal with billing or traffic management, analysis networks? Is there a government financial scheme to promote on behalf of customers, fraud detection or the marketing of electronic basic broadband or NGA broadband penetration? communication services. If the calling line identification is available, the service provider of Since 2015, Italy has been executing the ultra-broadband strategic plan electronic communication accessible to the public assures the calling (UBP) to develop an ultra-broadband network across all Italian terri- user the possibility of preventing, free of charge and through a simple tory and create a public telecommunications infrastructure in coherence function, the presentation of the calling line identification, call by call. with the purposes of the European Digital Agenda. The Italian Ministry Location data other than traffic data, referring to users can be of Economic Development acts through its in-house company (Infratel processed only if anonymised or if the user has previously expressed his Italia Spa) whose mission is to implement the infrastructure develop- or her consent, revocable at any time. ment schemes throughout the country, with particular focus on the Without prejudice to the provisions of articles 8 and 21 of Legislative development of ultra-broadband network and the Wi-Fi public services Decree No. 70/2003, the use of automated call or call communication connection. systems without the intervention of an operator for sending advertising The UBP is part of the wider Italian Ultra-Broadband Strategy – material or direct sales or for carrying out market research or commer- approved by the government in March 2015 – which intends to reduce cial communication is permitted only with the user’s consent. the existing market and infrastructure gap through the creation of condi- Further, the provisions of Regulation (EU) 2016/679 (General Data tions that are more favourable to the integrated development of fixed Protection Regulation) (GDPR) (articles 15 et seq) shall be integrated into and mobile telecommunications infrastructure. Such strategy represents the processing of data, including a data protection impact assessment the reference national framework for any public initiative supporting the (article 35). development of ultra-broadband networks in Italy. Concerning the security of the processing, article 32 of the GDPR The strategy is implemented through state aids (national and EU shall apply, and therefore, providers of a publicly available electronic funds alike), approved by the European Commission. Moreover, on 11 communications service shall, also through other entities entrusted February 2016, the Council of Ministers and the Conference of the Regions with the provision of the service, implement technical and organisational approved the ‘Framework agreement on the developing of the NGA as measures appropriate to the risk involved. www.lexology.com/gtdt 69 © Law Business Research 2021 Italy Simmons & Simmons LLP

The latter measures shall ensure that traffic and location data Further, Presidential Decree No. 131/2020 imposes several obli- and other personal data stored or otherwise transmitted are protected gations on the entities within the Perimeter to ensure a high level against accidental or unlawful destruction, loss, alteration, unauthor- of security. ised disclosure of, as well as ensure the implementation of a security First, entities must prepare, and annually update, the list of their policy. Where the security of the service or personal data also requires information and communications technology (ICT) assets and must the adoption of security measures to be taken concerning the network, then identify the ICT assets needed to perform the essential function the provider of the publicly available electronic communications service or service, to: shall take such measures jointly with the provider of the network. In • assess the impact of an incident on the ICT asset, in terms of its the event of failure to reach an agreement, at the request of one of the operability and the compromise of data availability, integrity or providers, the dispute shall be settled by the Communications Authority. confidentiality; and Further, the provider of a publicly available electronic communica- • assess dependencies with other networks, information systems, IT tions service shall inform the subscribers and, where possible, users, services or physical infrastructures belonging to other subjects. using clear, appropriate and adequate language concerning the category and age group of the subscriber, with particular attention in the Finally, entities must identify the ICT assets that, in the event of an case of minors, if there is a particular risk of a breach of network secu- incident, would cause the total interruption of the essential function rity, indicating, when the risk is outside the scope of the measures to be or service. taken by the provider described above, all possible remedies and the The second implementing decree on notifications of incidents relative presumable costs. Similar information shall be provided to the affecting networks, information systems and information services, as Data Protection Authority and the Communications Authority. well as security measures, which is expected to be published soon as it is already provided for by the Decree of 29 January 2021, regarding the Cybersecurity one-hour window for reporting a serious computer incident to the CSIRT 13 Is there specific legislation or regulation in place concerning and DIS by the entities belonging to the Perimeter. Concerning the cybersecurity or network security in your jurisdiction? Decree of 29 January 2021, the latter identifies the procedures, modalities and terms by which the National Assessment and Certification An essential moment in the evolution of cyber-security regulation in Centre (CVCN) and the Assessment Centres of the Ministries of Interior Italy was the implementation of Directive (EU) 2016/114 on Security of and Defence (CV) carry out assessments on the acquisition, by the Network and Information Systems (NIS Directive), through the issuing entities included in the Perimeter, of ICT technologies and software of Legislative Decree 65/2018, through which relevant innovations – including 5G technology – that could present vulnerabilities and there- were introduced. The peak position of the prime minister’s office was fore expose them to cyber risks. confirmed, as well as his leading role. A new centralised cyber inci- The latter decree provides that, before the launch of award proce- dent collection system was set, through the computer security incident dures or the conclusion of supply contracts, entities included in the response team (CSIRT). Further, the department of security intelligence Perimeter must notify the CVCN or the CV. Subsequently, the procedure (DIS) will act as the network and information systems single point of is divided into three phases: contact. Along with this, on 19 September 2019, the Italian Council of • preliminary assessments; Ministers approved new Decree-law No. 105/2019. The Decree-law was • preparation for the execution of tests; and then converted into a fully enforceable law by the parliament with Law • execution of hardware and software tests. No. 133/2019. This Law aims to guarantee a high level of safety for the networks, the information systems and the informatics services of the The third implementing Decree, fully effective from 8 May 2021 public administration, institutions and private entities that rely on the (Presidential Decree No. 54/2021 of 5 February 2021), focuses on the implementation of an essential function or the provision of an essential procedures and terms for assessments by the CVCN and the CVs on service for the country. products being acquired by entities included in the Perimeter. Moreover, one of the relevant goals of this Law was set by the NIS The latter Decree also establishes the criteria for identifying the Directive itself, which provided for the competent authorities to identify supply objects falling within the categories to which the assessment essential services operators and to define minimum security measures, procedure applies. later set by the Agency for Digital Italy. The purpose, fully implemented Indeed, the categories of ICT goods, systems and services subject by the present Law, with the creation of the Cybersecurity Perimeter to the assessment by the CVCN or the VCs are identified based on the (the Perimeter), leading to the identification and protection of those execution or performance of the following functions: essential services and functions providers, was to create an amour • switching or protection against intrusion and detection of cyber around such operators, both private and public entities, to shield the threats in a network, including the application of security policies; Italy from possible attacks and an ensuing national crisis (preventing • command, control and implementation in an industrial them and setting the ground to solve them as easily as possible). control network; In particular, five implementing decrees are provided to fully imple- • monitoring and configuration control of an electronic communica- ment the architecture of the Perimeter. The first implementing decree tion network; was fully effective from 5 November 2020 (Presidential Decree No. • network security concerning the availability, authenticity, integrity 131/2020) defines the criteria for identifying the entities included in the or confidentiality of services offered or data stored, transmitted or Perimeter and the obligations imposed on them to safeguard national processed; security. The list of entities included in the Perimeter has already been • authentication and allocation of the resources of an electronic drawn up, with about 100 entities involved, but was not published for communication network; national security reasons. • implementation of an IT service through the configuration of an Nonetheless, the sectors in which to identify, as a matter of priority, existing software program or the development, in part or in full, of public and private entities carrying out functions with a significant a new software program, constituting the application part relevant impact on national security include, among others, telecommunications, to the provision of the IT service itself. digital services and critical technologies.

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The categories will then be detailed in a further decree of the President Data localisation of the Council of Ministers, still to be enacted. 15 Are there any laws or regulations that require data to be stored The entities included in the Perimeter will notify the commence- locally in the jurisdiction? ment of a technology acquisition procedure together with a risks’ assessment. Under Italian law, there are no specific provisions that expressly require The last two implementing decrees are still expected to be that any kind of data shall be strictly retained within Italy’s national borders. approved and published. The fourth implementing decree will identify However, certain limitations may apply concerning specific the categories of networks, information systems and IT services for types of data. which it will be necessary to notify the CVCN, in the case of entrusting By way of example, under article 39 of Presidential Decree No. the provision of goods or services to third parties. The fifth implementing 633/1972 (relating to value-added tax application to the sale of goods decree will define the criteria for the accreditation of laboratories and services), any accounting document shall be retained through elec- responsible for verifying the security conditions in the procurement of tronic archives and stored in a foreign country only to the extent that products, processes and services for networks, information systems there are reciprocal assistance rights. and IT services. The GDPR imposes on the data controller, established outside the Further, as far as network security is concerned, under article European Union, but using instruments located in the national territory, 16-bis of the Electronic Communications Code, network providers and the obligation to appoint a local representative, which will be subject to telecom operators are obliged to comply with the network security national legislation and responsible for data processing on the territory. measures set out by the Ministry and to provide the latter with informa- Under articles 44 to 49 of the GDPR, the transfer of data from a data tion about any security or integrity breach. controller established in one of the EU member states to a controller of a Moreover, the GDPR’s provisions on privacy by design and default third country or an international organisation is allowed if the European must be considered when dealing with cybersecurity, as telecom opera- Commission has decided that the third country or international organi- tors must comply with such obligation even before implementing a new sation ensures an adequate level of data protection or under one of the product or service. appropriate safeguards apply.

Big data Key trends and expected changes 14 Is there specific legislation or regulation in place, and have 16 Summarise the key emerging trends and hot topics in there been any enforcement initiatives in your jurisdiction, communications regulation in your jurisdiction. addressing the legal challenges raised by big data? Recent news includes the issuance by the Italian Parliament of European There are no specific rules on big data in Italy. Delegation Law No. 53/2021 of 23 April 2021, which provides for the However, big data often includes personal data and in many cases, legislative delegations needed for transposing EU directives and other it is not possible to separate these data from non-personal data; there- EU acts into the Italian framework by also accounting for the current fore, as highlighted by the Data Protection Authority in the fact-finding covid-19 crisis. survey on Big Data of February 2020, the privacy risks deriving from the To the purposes hereof, among the directives that shall be imple- use of big data are different: mented based on the above law, mention must be made to Directive (EU) • the processing of personal data outside the purposes for which it 2018/1972 establishing the European Electronic Communications Code. was collected; According to the delegation law, the following principles and • the use of incorrect or outdated information; criteria shall be primarily followed by Italy in the implementation of the • discrimination or prejudice against certain individuals or groups European Electronic Communications Code: resulting from the application of certain profiling algorithms; and • the introduction of simplification measures for the development • the processing of personal data above what is necessary to of the connectivity and the increase of investments in ultra-broad- process them. band networks (fixed and mobile) to ensure the general access to very high-speed networks and their diffusion among the citizens Considering that the accuracy and reliability of a large set of data may throughout the entire nation, at competitive and accessible prices; not be accurate but rather approximate, big data itself is contrary to • the introduction of a notion of universal service which mirrors the a fundamental principle of the GDPR, namely, that every organisation technological progress, the market evolution and the users’ demand; or entity must respect the principle of accuracy of the personal data • ensure the compliance with the principles of competition and relating to a data subject. certainty of the time limits in the procedures for the award and As a general principle, moreover, article 22 of the GDPR renewal of rights of use of radio-spectrum frequencies; provides that: • the definition of an authorising regime for the use of the frequencies used by the technologies for the internet of things (eg, the Low the data subject shall have the right not to be subject to a decision Power Wide Area Network) to promote innovative business projects; based solely on automated processing, including profiling, which • provide for proportional administrative fees, to foster the develop- produces legal effects concerning him or her or similarly signifi- ment of service providers; and cantly affects him or her. • strengthen the powers and the independence of the Authority.

An efficient way to avoid GDPR non-compliance would be to adopt Although a term is not expressly provided by the delegation law for the anonymisation or pseudonymisation processes. implementation of the new European Electronic Communications Code, Moreover, the GDPR provides for some exceptions to its principles. a fast intervention by the Italian government is expected and strongly Data controllers can re-use personal data for purposes compatible recommended, considering that the terms for implementing Directive with the initial purposes and, if the processing is carried out for public (EU) 2018/1972 expired on 21 December 2020, by which Italy failed to interest, scientific or historical research or for statistical purposes, comply, the European Commission initiated an infringement procedure compatibility is implicit. against Italy. www.lexology.com/gtdt 71 © Law Business Research 2021 Italy Simmons & Simmons LLP

MEDIA Licensing requirements 19 What are the licensing requirements for broadcasting, Regulatory and institutional structure including the fees payable and the timescale for the 17 Summarise the regulatory framework for the media sector in necessary authorisations? your jurisdiction. Under Decision No. 353/11/CONS of the Authority relating to the In November 2018, the European Parliament and Council issued licensing of digital terrestrial radio and television broadcasting (DTT Directive (EU) 2018/1808 (new Audiovisual Media Services Directive) Regulation), digital terrestrial television (DTT) network operators must (new AVMS Directive), amending Directive 2010/13/EU on the coordina- have a general authorisation to operate a DTT network issued by the tion of certain provisions laid down by law, regulation or administrative Ministry and must obtain the right to use the relevant radio frequency action in member states concerning the provision of the AVMS Directive spectrum. The DTT Regulation provides for various requirements for given changing market realities. DTT network operators, including the number of programmes to be Legislative Decree No. 44/2010 has simplified the provision of broadcast, coverage requirements and, in particular circumstances, linear services, regulated the provision of non-linear services (eg, down- ‘must carry’ obligations. load and on-demand services), and introduced some limits concerning Service providers must apply for a general authorisation before advertisement crowding, as well as specific dispositions for the protec- providing their services. tion of European works. The broadcasting authorisation is issued by the Ministry for a The two main institutional bodies are the Italian Communications maximum of 12 years, renewable for a successive period of equal dura- Authority (the Authority) and the Ministry of Economic Development – tion upon request to be sent 30 days before the expiry date. Applications Communications Department (the Ministry). The Authority is vested of may be filed only by entities established in Italy, other EEA states or all powers and responsibility for development and policymaking activi- other countries applying reciprocal treatment to Italians willing to ties in connection with the provision of radio and audiovisual services. operate as broadcasters in such countries. No authorisation is required The Ministry has the power, among others, to grant licences, general for retransmission of programmes by broadcasters established and authorisations and spectrum. legitimately operating in countries that are signatories of the European Convention on Transfrontier Television. The Ministry decides within 60 Ownership restrictions days of the application. 18 Do any foreign ownership restrictions apply to media Each broadcaster shall pay a one-off fee of €7,000. services? Is the ownership or control of broadcasters The six-year renewable authorisation procedure for satellite broad- otherwise restricted? Are there any regulations in relation casters (including pay TV channels) is provided by Decision No. 127/00/ to the cross-ownership of media companies, including radio, CONS of the Authority. The Authority has 60 days to decide on any appli- television and newspapers? cation for satellite broadcasting or cable transmission. The satellite broadcasting and cable distribution of television The Consolidated Audiovisual Media Act is aimed at protecting the programmes are subject to a one-off fee of €6,027. media market as well as ensuring pluralism in the provision of the relevant audiovisual services through the implementation of certain Foreign programmes and local content requirements ownership restrictions for broadcasters. Such restrictions should be 20 Are there any regulations concerning the broadcasting applied regardless of the nationality of the broadcasters. of foreign-produced programmes? Do the rules require a In particular, when the digital broadcasting spectrum has been minimum amount of local content? What types of media fall fully allocated, no content provider shall be permitted to hold, directly outside this regime? or through subsidiaries, an authorisation to broadcast more than 20 per cent of television programmes (or 20 per cent of all radio programmes, The broadcasting of European programmes is regulated by article 44 as the case may be) nationwide through terrestrial technologies. and the following the Consolidated Audiovisual Media Act. Also, the Consolidated Audiovisual Media Act provides that no All television broadcasters and content providers must reserve a registered communications operator may earn, directly or through majority proportion of their transmission time for European programmes. subsidiaries, revenues exceeding 20 per cent of the communications The time used for news, sports events, games, advertising, talk shows, integrated system (CIS) (which includes all media and telecom sector teleshopping and teletext services shall not be taken into account. activities), as measured by the Authority on an annual basis. Telecoms Concerning foreign programmes, article 29 of the Consolidated operators that earn, also through subsidiaries, 40 per cent of their Audiovisual Media Act sets out that the authorisation released to local overall revenues in the telecom sector are not allowed to earn revenues broadcaster association includes the right to transmit in Italy foreign exceeding 10 per cent of the CIS. companies’ programmes for a maximum of 12 hours per day. In the case Concerning the cross-ownership of media companies, article 43 of interconnection with satellite channels or foreign television broad- paragraph 12 of the Consolidated Audiovisual Media Act prevents televi- casters, this shall not take more than 50 per cent of the maximum time sion companies operating nationwide and having revenues exceeding provided for the interconnection. 8 per cent of the CIS, as well as electronic communications operators The New AVMS Directive provides that EU member states shall having revenues exceeding 40 per cent of this market or sector, from ensure that media service providers of on-demand audiovisual media acquiring, any interest in enterprises that publish daily newspapers. services under their jurisdiction secure at least a 30 per cent share of European works in their catalogues and ensure prominence of those works.

72 Telecoms & Media 2021 © Law Business Research 2021 Simmons & Simmons LLP Italy

Advertising Regulation of new media content 21 How is broadcast media advertising regulated? Is online 23 Is new media content and its delivery regulated differently advertising subject to the same regulation? from traditional broadcast media? How?

Article 36-bis et seq of the Consolidated Audiovisual Media Act regulate Under article 2, paragraph a(1) of the Consolidated Audiovisual Media broadcast media advertising. Act, the definition of audiovisual services shall include the audiovisual As a general rule, the advertising shall not be hidden, subliminal services provided by television, both analogue and digital television, and shall be respectful of human rights and diversity. There are specific live streaming, television transmission through the internet (such as items for which advertising is forbidden, such as cigarettes and medi- webcasting) and on-demand television (such as the video on demand), cines, and specific protection for minors. with no difference between the services provided through traditional Article 37 provides that news, features films, films for television television and the internet. (excluding series, serial and documentaries) shall be interrupted by Italian Legislative Decree No. 44/2010, deriving from Directive spots of free-to-air national broadcasters no more than every 30 minutes. 2007/65/EC, has modified, inter alia, the provision of the audiovisual The advertising slots of RAI shall not exceed a weekly threshold of non-linear services (video on demand). It has introduced a minimum 4 per cent and an hourly threshold of 12 per cent. The advertising slots legal standard applicable to audiovisual linear services as well as to of Pay TV broadcasters shall not exceed a daily threshold of 15 per cent audiovisual non-linear services (eg, concerning the protection of minors and an hourly threshold of 18 per cent. and prohibition of hidden advertising). However, some specific provi- The daily threshold may be increased up to 20 per cent if there is sions shall not apply to audiovisual non-linear services. The main a combination of advertising slots with other forms of advertisement example concerns advertising. Because the audience may easily avoid such as teleselling. advertising, the daily threshold for the audiovisual non-linear adver- Regarding radio advertisements carried out by non-public broad- tising spots does not apply. Also, broadcasters may freely choose where casters, the hourly threshold is equal to 20 per cent for national to insert advertising spots. broadcasting and 25 per cent for local broadcasting. The entering into force of the amendments to the AVMS Directive Online advertising is regulated by Legislative Decree No. 206/2005 may lead to some changes to equalise the applicable provision, reducing (Consumer Code) and Legislative Decree No. 70/2003 (on electronic the gap between traditional and new media content and their delivery. commerce). Although the principles behind these regulations are analo- The Italian 2018 Budget Law (Law No. 205/2017) introduced rules gous to those provided by the Consolidated Audiovisual Media Act, the for the reorganisation of the frequencies destined for radio and televi- Consumer Code specifically prohibits unfair trade practices, as well sion broadcasting, following the destination of the frequencies of the as misleading and aggressive marketing practices whilst electronic 700 MHz band (694–790MHz) for the development of fifth-generation commerce, identifies some information that the information society radio-telephone connections. service provider must provide as well as the minimum requirements Concerning this process of the reorganisation of the frequencies of that any advertisement operator and any person making an online the 700Mhz band, the Ministry of Economic Development, with its decree advertisement must comply with. of 4 September 2018, established the creation of a board of coordina- These particularly provide that – in addition to the information tion called TV 4.0 aimed at harmonising and coordinating the release requirements laid down for specific goods and services – commercial activities of the 700MHz band, outlined by Budget Law No. 205/2017, as communications that are part of or constitute an information society well as to develop tools aimed to favour the digital transformation of the service, must include, from the first time they are sent, clearly and television sector. unambiguously, a specific statement aimed at highlighting that: For this new organisation, a complex national compliance calendar • it is a commercial communication; of the television frequency bands was provided within the 2019 Budget • the natural or legal person on whose behalf the commercial Law, which identifies the deadlines and provides for a transitional phase communication is made; of implementation, by geographical area, from 1 January 2020 to 30 • it is a promotional offer such as discounts, premiums or gifts and June 2022. Only at the end of this period will the definitive transition the conditions for accessing it; and to the new broadcasting standards occur (TV 4.0). The process, which • it is a promotional competition or game, if allowed, and the condi- was largely modified by the provisions of the 2019 Budget Law (in para- tions for participation. graphs 1103 to 1109), involves both national and local broadcasters, as well as providing for the restructuring of the multiplex containing Must-carry obligations regional information from the public service broadcaster. 22 Are there regulations specifying a basic package of programmes that must be carried by operators’ broadcasting Digital switchover distribution networks? Is there a mechanism for financing the 24 When is the switchover from analogue to digital broadcasting costs of such obligations? required or when did it occur? How will radio frequencies freed up by the switchover be reallocated? No regulations specify a basic package of programmes that must be carried by operators’ broadcasting distribution networks. However, The switchover procedure in Italy started in October 2008. The complete under article 15, paragraph 6 of the Consolidated Audiovisual Media Act, switchover from analogue to digital television in Italy occurred on 4 broadcasters providing contents of ‘particular value’ shall have privi- July 2012. leged access to the digital broadcasting network. Under Resolution No. The rules and procedure for the reallocation of radio frequencies 253/2004, contents of ‘particular value’ at national or at a local level are freed up by the switchover were contained in Resolution No. 550/12/ those containing, inter alia, a high educational value, news and facts, CONS of the Authority. The television frequencies have been reallocated socio-economic, cultural and political context, improvement of the rela- through the principle of the ‘higher economic offer’. In particular, the tionship between citizen and the public administration. resolution provided for the allocation of 21 national multiplexes, which No particular mechanism is provided to finance this kind of enable various signals to be combined into a common flow of data obligation. and the transmission of several digital terrestrial television services www.lexology.com/gtdt 73 © Law Business Research 2021 Italy Simmons & Simmons LLP

simultaneously. It was, in addition, provided that, at the end of the commercial communications by video-sharing platforms, entrusting selection procedure, no operator could obtain more than five national the related tasks, including the promotion of self-regulatory and multiplexes. co-regulatory procedures to Italian Communications Authority as With two decisions dated 26 July 2017 (Europa Way and Persidera), the national regulatory authority for the sector; the European Court of Justice has ruled that the Italian switchover from • protect consumers of audio-visual media services, both linear and analogue to digital terrestrial television was violating EU laws, failing to non-linear, also through out-of-court dispute resolution proce- allocate one multiplex for each analogue channel. dures and compensation mechanisms in the event of inefficiencies, Moreover, Italy has set a deadline of 30 June 2022 for the transi- entrusting the regulation of such procedures to the Authority; tion from DVB-T to the new second-generation digital broadcasting • promote European works, including in on-demand audio-visual standard DVB-T2/HEVC. The date mentioned in the 2019 Budget Law media services and also by simplifying and rationalising of the meas- refers to efficient spectrum use and the transition to 5G technology ures currently in force, as well as specific measures to promote the and a detailed roadmap was subsequently defined. In this regard, the transparency of the ownership structures of service providers; Italian Communications Authority has recently approved the update of • adapt the requirements for commercial communications to be the Automatic Channel Numbering Plan for digital terrestrial television applied also to video services and for the revision of the limits of intended to operate from 2022 on account of the profound technological advertising limits under the principles of flexibility, proportionality and market changes affecting the national and local broadcasting sector and competitiveness; in the transition to DVB-T2. • require media service providers, including social platforms, to provide users with sufficient information about content, including Digital formats advertising, that may harm the physical, mental or moral develop- 25 Does regulation restrict how broadcasters can use their ment of minors, including the prohibition of advertising including a spectrum? ban on gambling advertising, and specific measures against those who use fictitious profiles, of non-existent subjects or through the No specific regulations restrict the use of the spectrum by broadcasters. appropriation of the identities of others, to alter the exchange of As a general principle, broadcasters shall ensure efficient use of the opinions, to cause alarm or to take advantage of the dissemination radio spectrum (article 42 of the Consolidated Audiovisual Media Act). of false news; This means that they shall minimise the environmental impact, • promote digital literacy among media service providers and video avoid risks for human health, and ensure that there are no interferences of videos; with other broadcasters’ spectrum. • update the current administrative sanctions regime to the new obligations provided by the AVMS Directive, based on principles of Media plurality reasonableness, proportionality and effectiveness. 26 Is there any process for assessing or regulating media plurality (or a similar concept) in your jurisdiction? May the REGULATORY AGENCIES AND COMPETITION LAW authorities require companies to take any steps as a result of such an assessment? Regulatory agencies 28 Which body or bodies regulate the communications and media Under article 5, paragraph 1 of the Consolidated Audiovisual Media Act, sectors? Is the communications regulator separate from the the Italian media services system shall guarantee the media plurality, broadcasting or antitrust regulator? Are there mechanisms to forbidding the creation or maintenance of positions against the pluralism avoid conflicting jurisdiction? Is there a specific mechanism to and ensuring the transparency of broadcasters’ corporate assets (eg, ensure the consistent application of competition and sectoral having more than 20 per cent of the total television programmes or regulation? the total radio programmes or 40 per cent of the total revenue of such sector). Article 43 sets out a specific procedure for preventing dominant The two main bodies vested with the powers to regulate the communica- positions and the rules for the assessment by the Authority. tions and media sectors are the Italian Communications Authority (the The Ministry and the Authority have the competence to monitor and Authority) and the Ministry of Economic Development – Communications ensure media plurality. The Authority may take appropriate measures, Department (the Ministry). including the prohibition of proposed transactions. The Authority grants licences and authorisations for public broadcasting, regulates the relationship between telecoms companies and Key trends and expected changes settles disputes between operators or between operators and end users. 27 Provide a summary of key emerging trends and hot topics in The Ministry is responsible for receiving requests of general author- media regulation in your country. isations to provide electronic communications networks and services and for public broadcasting. It is also responsible for the approval of the Recent news includes the issuance by the Italian parliament on 23 April national spectrum allocation plan. 2021, of European Delegation Law No. 53/2021 that provides for the While the Authority regulates both the communications and the legislative delegations needed for transposing EU directives and other broadcasting sector, the antitrust regulation pertains to the Italian EU acts into the Italian framework by also taking into account the current Competition Authority (ICA). The ICA has exclusive competence over covid-19 crisis. To the purposes hereof, amongst the directives that the enforcement of Italian competition rules in the telecoms and broad- shall be implemented based on the above law, the new AVMS Directive casting sectors. The Electronic Communications Code provides for amends the AVMS Directive. further collaboration and consultation between the Authority and the According to the delegation law, the following principles and criteria ICA in overlapping matters. The two bodies entered into an agreement shall be primarily followed by Italy in the implementation of the AVMS defining the modalities for such cooperation. Directive. In particular, measures should be provided to: Moreover, the Data Protection Authority is the authority responsible • ensure adequate protection of human dignity and minors concerning for supervising the compliance of telecom operators with the Italian Data audio-visual content, including user-generated videos, and Protection Code.

74 Telecoms & Media 2021 © Law Business Research 2021 Simmons & Simmons LLP Italy

Appeal procedure 29 How can decisions of the regulators be challenged and on what bases?

Any act, decision or resolution of the Authority or the ICA may be appealed, also regarding the merit of facts, to the Regional Administrative Court of Lazio by any individual or legal entity that has been directly affected by such act, decision or resolution. The Regional Administrative Court of Lazio’s judgment may be appealed to the Council of State. Alessandra Bianchi [email protected] Competition law developments 30 Describe the main competition law trends and key merger Via Tommaso Grossi 2 and antitrust decisions in the communications and media Milan sectors in your jurisdiction over the past year. 20121 Italy The major competition law trend may be identified in the text of annual Tel: +39 02 7250 51 Fax: +39 02 7250 5505 Competition Law No. 124/2017. www.simmons-simmons.com The idea behind this law is to open up entire sectors of Italy’s economy to more competition. The law is a collection of measures regarding about 20 sectors including telecommunications, energy, insurance and pharmacies. The ICA, in its notice, highlights how digital networks represent the Concerning telecommunications, the main change concerns the country’s backbone infrastructure and how their development should transfer of phone services. In particular, under such law, expenses be a priority in the Next Generation EU economy recovery package. incurred in the event of a withdrawal or transfer of a service to another The ICA proposals mainly focus on investment in fixed and mobile telephone operator must be proportional to the value of the contract communications networks, stressing the need to: and the actual costs borne by the operators. Moreover, customers now • increase the infrastructural competition; have the right to inform the operators electronically of the change. • remove administrative obstacles to the investments; Also, contracts including promotional offers shall not be longer than • align with European standards; and 24 months. • boost the demand and mobility of consumers. A remarkable decision by the ICA was issued in February 2021 against Sky for three unfair commercial practices against customers The achievement of these goals, as highlighted by the ICA, necessarily who subscribed to pay TV packages Sky Calcio and Sky Sport. The sanc- require – amongst others – the amendment of existing provisions of the tioned amount was €2 million. Electronic Communications Code but, above all, the immediate imple- Further, the ICA sanctioned Facebook for €7 million for failing to mentation of the New European Electronic Communications Code. comply with directions to remove the unfair practice on the use of user Significant innovations are (hopefully) expected shortly, thus data and failing to publish the corrective statement requested by the players of the sector should be ready to them also to use this news to ICA. Indeed, the ICA had already issued an order against Facebook and create new businesses or reshape the current ones. sanction of €5 million earlier in November 2018. Finally, it is worth mentioning that the ICA has opened an investigation against Google, alleging abuse of a dominant position concerning the availability and use of data for the processing of display advertising campaigns, the space that publishers and website owners make available for the display of advertising content.

Not many specific initiatives at a government level have been adopted during the covid-19 crisis. The ICA issued a provision that suspended all payment terms and the penalty payments terms from the beginning of the emergency until last 30 April 2021. However, despite this specific and narrow provision, it is noteworthy that the covid-19 pandemic seems to have provided input towards global revisions and the creation of investments and infrastructures in strategic sectors with the aim of re-launching the country and the national economy after the crisis created by the pandemic. These include digital infrastructures. This is clearly described in the recent notice of the ICA to Italian prime minister Draghi, concerning the 2021 Competition Law. www.lexology.com/gtdt 75 © Law Business Research 2021 Japan

Atsushi Igarashi, Takuya Yamago, Koshi Okabe and Yukito Nagaoka TMI Associates

COMMUNICATIONS POLICY Authorisation/licensing regime 2 Describe the authorisation or licensing regime. Regulatory and institutional structure 1 Summarise the regulatory framework for the communications Business operators that provide services intermediating other sector. Do any foreign ownership restrictions apply to persons’ telecommunications, such as fixed phone companies, mobile communications services? phone companies, satellite phone service companies, internet Service Providers, email service providers and messaging service providers, The main laws that regulate the Japanese telecommunications industry must perform the entry procedure under the Telecommunications are the Telecommunications Business Act, the Radio Act and the Business Act. The type of entry procedure depends on the scale of the Wired Telecommunications Act. The Telecommunications Business Act telecommunications line facilities (eg, fibre optics and base stations). stipulates secrecy of communications, entry and exit from the telecom- If a business operator installs telecommunications line facilities on a munications business, regulations on charges and services, connection scale exceeding the threshold, the business operator must be regis- rules between carriers, and a universal service system, etc. The Radio tered after the screening process performed by the Ministry of Internal Act stipulates radio station licences, radio equipment, technical regu- Affairs and Communications (MIC). If a business operator installs lations conformity certification of specified radio equipment, and radio telecommunications line facilities on a scale below the threshold or operators. The Wired Telecommunications Act stipulates the standards does not install telecommunications line facilities (including over-the- and use of wired telecommunications equipment. The regulatory agency top service providers), it only has to file a notification with the MIC. for the telecommunications industry is the Ministry of Internal Affairs When a foreign business operator intends to be registered or make a and Communications. filing as a telecommunications business operator, it must designate The major carriers in Japan’s telecommunications business are a domestic representative. The validity period and licence fee are not Nippon Telegraph and Telephone Corporation (NTT) (including NTT determined regarding the registration or notification of telecommunica- EAST, NTT WEST and NTT DoCoMo), KDDI Corporation, and Softbank tions services. Corp. Meanwhile, Rakuten Mobile, Inc has recently entered the mobile To establish and operate a radio station, a radio station licence phone business. from the MIC is generally necessary. To obtain the radio station licence, The Foreign Exchange and Foreign Trade Act stipulates compre- the applicant must first make an application to the MIC. If the appli- hensive restrictions on foreign ownership in Japanese corporations. cant passes the document screening, the applicant obtains a provisional The telecommunications business is also subject to foreign ownership licence and constructs the radio station accordingly. If the radio station restrictions under the Foreign Exchange and Foreign Trade Act, and if a passes the inspection test after the construction, the applicant finally foreigner acquires 1 per cent or more of the shares of a corporation in obtains a licence to operate the radio station. However, there are a national security-related industry, including the telecommunications many exceptions to be exempted from or to simplify these procedures. business, prior notification to the government is required, in principle. For example, the applicant can obtain a radio station licence through There is no comprehensive foreign ownership regulation in the simplified document screening procedures for certain radio equipment Telecommunications Business Act, but NTT, which was originally a state- certified as complying with applicable technical standards. owned enterprise, has a communication network all over Japan, and The licence period, usage fee and use conditions of radio station has the largest market share among telecommunications carriers, is licences are dependent upon the categories of radio stations. In Japan, subject to foreign ownership regulations under the NTT Act. According while there still is no pure spectrum auction system, certain spectrum to the NTT Act, it is prohibited for foreigners, foreign governments and bands for the fifth-generation mobile communication system (5G) have foreign corporations to hold more than one-third of the voting rights of been recently allocated through the auction-like mechanism under NTT Corporation (including indirect investment). It is also prohibited for which the evaluated price for the spectrum offered by the applicants foreigners to serve as officers of NTT and its regional companies, NTT is taken into account among other factors. A frequency is allocated for EAST and NTT WEST. each type and purpose of wireless communications under the Frequency Also, according to the Radio Act, foreigners, corporations repre- Allocation Plan made and published by the MIC. The frequency of each sented by foreigners, corporations in which foreigners occupy more generation’s mobile network and satellite networks are also allocated than one-third of officers, and corporations in which foreigners hold under the Frequency Allocation Plan. more than one-third of voting rights are not granted a radio station As for public Wi-Fi services, registration or notification under the licence. However, radio stations of telecommunications carriers are Telecommunications Business Act is necessary except for services not subject to foreign ownership regulations regarding radio station ancillary to the original business of the operator or services that are licences under the Radio Act. not for profit. Obtaining a radio station licence for the establishment and operation of the Wi-Fi system is not required as long as the services

76 Telecoms & Media 2021 © Law Business Research 2021 TMI Associates Japan are provided by using apparatuses that meet the technical standards NTT EAST/WEST, which owns essential facilities, must implement under the Radio Act and the technical standards compliance mark is certain functional separation, such as setting up firewalls between the attached thereto. network development and service development.

Flexibility in spectrum use Universal service obligations and financing 3 Do spectrum licences generally specify the permitted use 6 Outline any universal service obligations. How is provision of or is permitted use (fully or partly) unrestricted? Is licensed these services financed? spectrum tradable or assignable? Fixed phones, public phones and emergency calls are deemed as Any person who intends to establish a radio station under the Radio Act universal services. To allocate part of the costs of universal services, shall, in principle, obtain a radio station licence. Radio station licences contributions named universal service fees are collected from mobile specify certain matters such as the permitted use, the permitted phone companies, fixed phone companies and IP phone companies, frequency and antenna power, etc. As an exception, some wireless and the contributions are distributed to NTT EAST and NTT WEST, who systems, such as 2.4 GHz-Band Wireless LANs, are permitted to operate are the universal service providers. The amount of the contributions is without a radio station licence under certain conditions. Radio station between ¥2 to ¥3 per month per telephone number, and the contribu- licences are not freely transferable or assignable, however, they can be tions are passed on to the end users in most cases. succeeded to in certain cases, such as mergers of corporations. Broadband is not deemed as a universal service at this time, but the Ministry of Internal Affairs and Communications is considering Ex-ante regulatory obligations designating broadband a universal service. 4 Which communications markets and segments are subject to ex-ante regulation? What remedies may be imposed? Number allocation and portability 7 Describe the number allocation scheme and number In the Telecommunications Business Act, most rules are ex-post regula- portability regime in your jurisdiction. tions but there are some ex-ante regulations. As for universal services (eg, fixed telephone) and services which Telecommunication numbers such as fixed phone numbers or mobile are provided by using bottleneck facilities and cannot be sufficiently phone numbers are assigned to telecommunication service providers substituted by other services, the providers of such services must under the Telecommunication Number Plan outlined by the Minister of notify the Ministry of Internal Affairs and Communications in advance Internal Affairs and Communications. Any telecommunication service regarding the fixed terms and conditions stipulating the service condi- provider who intends to use telecommunications numbers shall, in prin- tions including the price. Also, the price cap regulation applies to the ciple, prepare a Telecommunication Number Use Plan and obtain an services which have particularly significant impacts on the inter- authorisation from the Minister of Internal Affairs and Communications. ests of users. In the past, only major telecommunication service providers such Companies designated by the MIC as business operators estab- as fixed network operators (FNOs) and mobile network operators lishing major networks are the targets for ex-ante regulations regarding (MNOs) were subject to regulation; however, the amendment to the their fixed terms and conditions stipulating the connection fees and the Telecommunications Business Act in 2019 imposed regulations on tele- connection conditions to connect the networks to other business opera- communication numbers upon not only FNOs or MNOs but also fixed tors’ networks (ie, prior authorisation by the MIC for the fixed terms and virtual network operators (FVNOs) and mobile virtual network opera- conditions regarding fixed telecommunications, and prior notification to tors (MVNOs). the MIC for the fixed terms and conditions regarding mobile telecom- For local fixed phone numbers, bilateral number portability is munications). Further, the designated companies are obliged to keep scheduled to be achieved by 2025; but currently, only unilateral number accounts regarding the connection of networks. portability from NTT EAST/WEST to other operators is performed. Business operators that have dominant market positions (NTT Conversely, for mobile phone numbers, bilateral number porta- EAST and NTT WEST for the fixed telecommunications market, and NTT bility between MNOs and MVNOs is currently required. Further, a recent DOCOMO for the mobile telecommunications market) are under special amendment to the guidelines has facilitated mobile number portability regulations such as a prohibition on the use or provision of information by, for instance, requesting number portability fees to be waived under acquired concerning their business operations regarding the connection certain conditions. of networks and unreasonably preferential or disadvantageous treatment of specific business operators. Customer terms and conditions NTT is subject to special regulations under the NTT Act such as 8 Are customer terms and conditions in the communications the authorisation procedure for its business plan and the obligation sector subject to specific rules? to submit its financial statements, considering that NTT took over the capital of Nippon Telegraph and Telephone Public Corporation which When telecommunications business operators or their sales agencies had a monopoly on the installation of domestic phone lines in Japan conclude contracts with consumers of mobile phone services or fibre- until 1985. to-home services, etc, they are obliged to explain the outline of the terms and conditions in advance and deliver a document clarifying the Structural or functional separation terms and conditions, and they are prohibited from misrepresenting and 5 Is there a legal basis for requiring structural or functional persistently soliciting, etc. Within an eight-day period, consumers can separation between an operator’s network and service terminate contracts regarding mobile phone services or fibre-to-home activities? Has structural or functional separation been services services, etc, by only having to pay necessary costs such as introduced or is it being contemplated? usage fees until then and construction costs. Also, the following are obliged to separate communication service No general rules require either structural separation or functional sepa- fees and the price of a device and are prohibited from performing exces- ration between an operator’s network and service activities. However, sive enclosures such as prolonged minimum contract periods and www.lexology.com/gtdt 77 © Law Business Research 2021 Japan TMI Associates

expensive cancellation penalties (article 27-3 of the Telecommunications Next-Generation-Access (NGA) networks Business Act): 11 Are there specific regulatory obligations applicable to • MNOs; NGA networks? Is there a government financial scheme to • group companies of MNOs; promote basic broadband or NGA broadband penetration? • MVNOs whose market shares exceed 0.7 per cent; and • sales agencies of the above points. There are no specific regulatory obligations that are particularly applicable to NGA networks. Net neutrality The Japanese government provides subsidies to entities that 9 Are there limits on an internet service provider’s freedom to intend to develop fibre optic in certain areas such as rural areas, to control or prioritise the type or source of data that it delivers? improve the spread of broadband access. Are there any other specific regulations or guidelines on net Moreover, to facilitate the fifth-generation mobile communication neutrality? system (5G), which was launched in 2020, the Japanese government provides special financial support, such as tax incentives, to carriers Article 6 of the Telecommunications Business Act provides that and vendors who intend to develop the 5G network. To be eligible for ‘Telecommunications business operators must not engage in unfair this special financial support, carriers or vendors must prepare a devel- and discriminatory treatment concerning the provision of telecom- opment plan and obtain approval from the government. munications services’. Further, the behaviour of analysing packets The Ministry of Internal Affairs and Communications is currently regarding telecommunications for zero-rating services or bandwidth considering whether broadband access service should be designated as throttling may violate the secrecy of communications (article 4 of the a universal service for which universal service fees are collected, which Telecommunications Business Act). is not currently the case. The legality of controlling or prioritising the type or source of data delivered by internet service providers is judged by analysing Data protection whether such behaviour violates the aforementioned rules on a case- 12 Is there a specific data protection regime applicable to the by-case basis. communications sector? Net neutrality issues are being discussed in the Study Group on Network Neutrality held by the Ministry of Internal Affairs and Data protection in Japan is regulated by the Act on the Protection of Communications and this study group published an interim report in Personal Information (APPI). The APPI is in line with the eight principles April 2019. under the Organisation for Economic Co-operation and Development Based on this interim report, the Guidelines on the Application of Guidelines and stipulates the acquisition and use of personal informa- the Telecommunications Business Act for Zero-Rating Services were tion, security management measures, provision to third parties, and the developed, and the Guidelines for the Interpretation of Bandwidth rights of individuals. The Personal Information Protection Commission Control (in Japanese) were revised. These guidelines provide case- (PPC) supervises the handling of personal information based on the by-case analyses regarding whether or not zero-rating services and APPI. Also, regarding the specific interpretation and operation of the bandwidth control violate the Telecommunications Business Act. APPI, the PPC has published guidelines on the protection of personal information (general rules, rules on the provision to third parties in Platform regulation foreign countries, rules on confirmation and recording obligations when 10 Is there specific legislation or regulation in place, and have providing to third parties, rules on anonymously processed informa- there been any enforcement initiatives relating to digital tion), guidelines on how to deal with cases such as leakage of personal platforms? data, and frequently asked questions. Also, regarding the protection of personal information in the The Act Regarding the Improvement of Transparency and Fairness of telecommunications business, the Ministry of Internal Affairs and Specified Digital Platforms was enacted on 27 May 2020 and came into Communications has published its Guidelines for the Protection of force on 1 February 2021. This Act obliges platform service providers Personal Information in the Telecommunications Business that stipu- which have a high need to improve their transparency and fairness late the basic matters that telecommunications carriers should comply (Specified Digital Platforms) to disclose information regarding the terms with to properly handle personal information, and the purposes of use, and conditions of their transactions, establish procedures and systems ensuring accuracy, retention period, safety management measures, to promote mutual understandings with their users who provide and restrictions on the provision to third parties regarding personal goods or services using the platforms and submit annual reports. Only information. The guidelines also stipulate the handling of information online malls and application stores with especially high sales volumes specific to the telecommunications business, such as communication are designated as Specified Digital Platforms at this time, but the history, usage details, caller information, location information and non- government is planning to expand the subject of these regulations to payer information. large-scale digital advertising platforms. Also, the Telecommunications Business Act stipulates the prohibi- Moreover, the Act Regarding the Protection of the Interests of tion of censorship of communications and secrecy of communications Consumers Who Use Digital Platform for Transactions is under delib- during the handling of telecommunications carriers. eration in the Diet at this time. This Act provides that the Minister of Consumer Affairs can request digital platform service providers like Cybersecurity online malls to delete the exhibition of items that have significant 13 Is there specific legislation or regulation in place concerning misrepresentations in important points and that consumers can demand cybersecurity or network security in your jurisdiction? digital platform service providers to disclose information of sellers to the extent necessary to exercise claims (eg, claims for damages). The Basic Act on Cybersecurity stipulates Japan’s basic policy on cybersecurity as well as the fundamental responsibilities of the national and local governments. Under the Basic Act on Cybersecurity, critical infrastructure operators, including certain telecommunications carriers,

78 Telecoms & Media 2021 © Law Business Research 2021 TMI Associates Japan shall endeavour to voluntarily and proactively secure cybersecurity and transfer of personal data. For example, a business operator who intends to cooperate with cybersecurity measures implemented by the national to obtain prior consent from the data subject for the cross-border and local governments. transfer of his or her personal data must provide the data subject with Under the Telecommunications Business Act, telecommunica- certain information such as the name of the receiving country and an tions service operators shall have obligations to protect the secrecy of outline of personal data laws of such receiving country. telecommunications, and to maintain and operate certain telecommunication facilities in compliance with the applicable technical standards Key trends and expected changes established by the Ministry of Internal Affairs and Communications. 16 Summarise the key emerging trends and hot topics in These technical standards include certain requirements for communications regulation in your jurisdiction. network security. The promotion of competition in the mobile market is a hot issue in the Big data Japanese telecommunications market. Prime Minister Suga, who took 14 Is there specific legislation or regulation in place, and have office in September 2020, has listed the promotion of competition in the there been any enforcement initiatives in your jurisdiction, mobile market as one of the government’s most important policies. addressing the legal challenges raised by big data? In October 2019, the amended Telecommunications Business Act came into force to promote competition in the mobile market, and the In the past, there was no specific law regulating big data, but this separation between communication service fees and the price of a changed with the revision of the Act on the Protection of Personal device and the prohibition of excessive enclosures were both realised. Information (APPI) in 2015 which created a system for anonymously In October 2020, just one year after the amended act came into force, the processed information. Under the revision, by applying a certain amount MIC published its Action Plan toward Establishing a Fair Competition of anonymous processing to personal information so that a specific indi- Environment in the Mobile Market and indicated its policy of further vidual cannot be identified and personal information cannot be restored, promoting competition in the mobile market by establishing a usage it becomes possible to utilise it as big data. environment facilitating Mobile Number Portability, promoting unlocked In 2016, the Basic Act on the Advancement of Public and Private SIM cards, promoting eSIMs, reducing connection fees and wholesale Sector Data Utilization was enacted, and the Basic Plan of Public- prices charged to MVNOs by MNOs, and so on. Private Data Utilization was formulated under this Act. Currently, the The amended Telecommunication Business Act, which came into smooth distribution of data is being encouraged through this legislation force on 1 April 2021, clarifies that such Act applies to foreign busi- by promoting open data and the construction of a mechanism for indi- ness operators that provide telecommunications services from foreign vidual involvement in data distribution. countries to Japan and obliges such foreign business operators to After that, in 2018, the Unfair Competition Prevention Act was designate their domestic representatives. In the Telecommunication amended to clarify that illegal acquisition, use and disclosure of certain Business Act before such amendment, the regulations of the Act (eg, big data are subject to injunction and compensatory damages. In 2018, secrecy of communications and an incident report obligation regarding the revision of the Copyright Act clarified that certain use of big data communication disturbances) did not apply to foreign business opera- does not infringe copyright under certain circumstances, and the use tors in effective ways, and the recent amendment intends to correct of big data is being promoted. Also, the utilisation of big data is being such situation by enabling the exercise of administrative authority to promoted in various fields, such as promoting the utilisation of big data foreign business operators through their domestic representatives and in the medical field through the Next Generation Medical Infrastructure realising the protection of users in Japan and an equal footing between Act. On the other hand, in 2019, the Japan Fair Trade Commission domestic and overseas business operators. The explanation of the published the Idea of Antitrust Act Regarding Abuse of Dominant amendment written by the MIC is available online. Bargaining Position in Transactions Between Digital Platform Operators Under the Telecommunications Business Act, telecommunications and Consumers who Provide Personal Information, etc. to ensure the business operators are obliged to report to the MIC in the case of a proper use of big data from the perspective of the Antitrust Act. violation of the secrecy of communications or a significant communication disturbance. The MIC is now discussing the future of the reporting Data localisation system considering the current situation in the telecommunications 15 Are there any laws or regulations that require data to be market, including the aggravation of the risks of natural disasters and stored locally in the jurisdiction? cyber-attacks and the diversification of telecommunications services and the provision of telecommunications services by foreign companies. There are no general laws or regulations requiring data to be stored in Japan. Generally speaking, the APPI provides restrictions on the MEDIA cross-border transfer of personal data. Specifically, a business operator that intends to transfer personal data to any third party overseas, is Regulatory and institutional structure required, in principle, to obtain the prior consent of the data subject. As 17 Summarise the regulatory framework for the media sector in an exception, a business operator can transfer personal data to a third your jurisdiction. party outside of Japan without the data subject’s prior consent if either: • a receiving country is recognised by the Personal Information The main laws that regulate the Japanese media industry are the Protection Commission as having a sufficient level of protection Broadcasting Act, the Telecommunications Business Act, the Radio Act (currently, only the EU member states, Iceland, Liechtenstein, and the Wired Telecommunications Act. The regulatory agency for the Norway and the United Kingdom are recognised); or media industry is the Ministry of Internal Affairs and Communications. • the third party who is a recipient of personal data has implemented The Broadcasting Act, which is central to the broadcasting field protective measures at the same level as required by the APPI. regulations, stipulates editing standards for broadcast programmes, the establishment and operation of NHK (Japan’s public broadcaster), The recent amendment to the APPI, which is scheduled to come into certification and registration of broadcasters, and restrictions on effect on 1 April 2022, has enhanced the regulations on the cross-border foreign ownership. In Japan, broadcasting and communication are www.lexology.com/gtdt 79 © Law Business Research 2021 Japan TMI Associates

distinguished and different regulations are applied. Broadcasting in There is no general regulation of cross-ownership between broad- Japan includes terrestrial television broadcasting, satellite television casters and other media outlets such as newspaper publishers, while broadcasting (broadcast satellite and communications satellite), wired it is still prohibited for one group company to own all of the terrestrial television broadcasting, wireless and wired radio broadcasting, and television broadcasting, the radio broadcasting and the newspaper in internet protocol multicast broadcasting, all of which are subject to the the same area if there are no other mass media in such area. Broadcasting Act. However, general internet programme distribution, which is one-to-one on-demand communication, is not subject to the Licensing requirements Broadcasting Act and may be subject to information and communication 19 What are the licensing requirements for broadcasting, regulations such as the Telecommunications Business Act depending including the fees payable and the timescale for the on the circumstances. In the field of communications, the secrecy of necessary authorisations? communications is guaranteed, but in the field of broadcasting, diversity of programmes and political neutrality are required due to their Any person who intends to conduct broadcasting must, in principle, public nature. obtain both the licence of the broadcast station under the Radio Act and the approval under the Broadcasting Act (in the case of a basic broad- Ownership restrictions caster) or registration (in the case of a general broadcaster). 18 Do any foreign ownership restrictions apply to media Under the Radio Act, a person who has submitted an application services? Is the ownership or control of broadcasters stating the necessary matters shall be granted a radio station licence if otherwise restricted? Are there any regulations in relation he or she satisfies certain requirements such as: to the cross-ownership of media companies, including radio, • the application does not violate the foreign ownership restrictions; television and newspapers? • the construction design conforms to the technical standards; • the frequency allocation is possible; and Under the Broadcasting Act, any person intending to conduct basic • the applicant has sufficient financial basis and technical capability broadcasting operations must obtain approval from the Minister of to maintain the service (in the case of a basic broadcaster) Internal Affairs and Communications after proving that it is not: 1 a person who does not have Japanese nationality; Depending on the type of radio station, the size of the basic transmitter, 2 a foreign government or its representative; and the application method, the application fee for the television broad- 3 a foreign corporation or organisation; casting station is ¥8,600 to ¥167,800. A registration and licence tax is 4 corporation or organisation, any specified officer of which is a also imposed separately upon registration and the spectrum use fees person outlined in (1) to (3); or are charged annually. The standard processing period for licences for 5 a corporation or organisation in which 20 per cent or more of its radio stations is not specified and is determined on a case-by-case basis. voting rights are held by a person outlined in (1) to (3), etc, ((4) Approval under the Broadcasting Act is granted to a person who and (5) are collectively referred to as ‘grounds for disqualification’). has submitted an application stating necessary matters after satisfying requirements such as: Additionally, a basic broadcaster is not allowed to permit any person • not violating foreign ownership restrictions or the principle of outlined in (1) to (3) to indirectly hold 20 per cent or more of its voting excluding multiple ownership of the media; rights through a Japanese entity. If the basic broadcaster violates this • having the financial basis and technical capability sufficient to regulation, the Minister shall revoke the approval; provided, however, maintain the service; and that the Minister does not have to revoke the approval during the • having the telecommunications facilities conform to the technical remainder of the valid period of the approval if it is deemed necessary standards. taking the circumstances into account. Further, a basic broadcaster that is a company that has issued On the other hand, registration is granted to a person that submits a listed shares may refuse to list or record the name and address of written application to the Minister of Internal Affairs and Communications, a shareholder in its shareholder registry if the transfer of its shares except where there are grounds for refusal of registration, such as the would result in a violation of the foreign ownership restrictions listed fact that the approval or registration has been revoked or the person above. Moreover, if a basic broadcaster falls under grounds for disquali- has been punished for violation of the Radio Act or the Broadcasting fication due to an increase of indirect control via a Japanese entity by Act in the past. the persons outlined in (1) to (3), such Japanese entity is deemed as not holding voting rights in the basic broadcaster to the extent of exceeding Foreign programmes and local content requirements the limit. 20 Are there any regulations concerning the broadcasting There are similar restrictions under the Radio Act, and a radio of foreign-produced programmes? Do the rules require a station licence will not be granted to any person outlined in (1) to (3) minimum amount of local content? What types of media fall above, or to a corporation or organisation if: outside this regime? • its representative or one-third or more of officers are any person outlined in (1) to (3); or While there are no direct regulations, NHK must contribute to enhancing • one-third of its voting rights are held by any person outlined in international goodwill and developing economic exchange with foreign (1) to (3). countries by promoting accurate information on Japan through introducing the culture, industry and other factors surrounding Japan, etc, in No specific foreign ownership restrictions apply to newspapers, but it the broadcasting or editing of programmes provided to foreign audiences. is restricted in practice because most publishers of daily newspapers Moreover, under the Broadcasting Standards outlined by the have restricted the assignees of their shares through their articles of Broadcasting Ethics & Improvement Organization (BPO), private broad- incorporation under the Act on Restriction on Transfer of Shares in casting companies must consider differences of historical context, Stock Companies whose Business Purpose is the Publication of Daily national situation, tradition and customs, etc, when they refer to foreign Newspapers. programmes or cover foreign situations.

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Advertising Communications regarding strict requirements such as not violating 21 How is broadcast media advertising regulated? Is online foreign ownership restrictions and securing the facilities of basic broad- advertising subject to the same regulation? casting stations, etc. On the other hand, general broadcasting merely requires registration from the Minister. Registration is possible except In general, advertising in Japan is regulated under the Act against for when there have been violations of the Broadcasting Act and regula- Unjustifiable Premiums and Misleading Representations (AUPMR) that tions or technical standards, and the requirements are relatively lenient. restricts any misleading representation (which portrays the relevant good or service as being significantly superior to that of the actual Digital switchover goods or services, or, contrary to the facts, significantly superior to 24 When is the switchover from analogue to digital broadcasting those of other entrepreneurs, etc) being made to general consumers. required or when did it occur? How will radio frequencies Under the Broadcasting Act, a broadcaster must ensure that freed up by the switchover be reallocated? recipients of the broadcasts are able to clearly identify advertising broadcasts as advertisements. Additionally, a basic broadcaster shall The nationwide switchover from terrestrial analogue television to not include advertisements in any educational programs for schools if it terrestrial digital television was completed on 31 March 2012, and the is deemed that they would impede school education. Also, NHK and the switchover from satellite analogue television to satellite digital televi- Open University of Japan (an accredited educational institution utilising sion was completed on 24 July 2011. broadcasting media to provide a wide range of people with learning Part of the VHF bands which had once been allocated to terrestrial opportunities) must not broadcast advertisements for any third party’s analogue television was allocated to the mobile multimedia broad- products and services. casting service upon the switchover to digital television; however, the On top of that, the Broadcasting Standards outlined by the BPO set mobile multimedia broadcasting service is currently out of service. In various voluntary standards such as: the same spectrum band, advanced broadcasting and communication • any representations must be based on facts, and also be clear services are being examined. and plain; Further, part of the UHF bands that had once been allocated to • subliminal methods shall not be used; and terrestrial analogue television is currently allocated to mobile phone • the proportion of advertisements shall be below a certain level. services. Since August 2020, it has been permitted to operate fifth- generation mobile communication systems (5G) in the spectrum bands Online advertising is subject to the regulations under the AUPMR which were initially allocated for fourth-generation mobile communica- and the Act on Specified Commercial Transactions. The Fair-Trade tion systems (4G). Commission has issued a report titled Problems and Points of Concern under the AUPMR Concerning Representations in Business-to- Digital formats Consumer E-Commerce, which summarises the problems specific to 25 Does regulation restrict how broadcasters can use their online advertising. spectrum?

Must-carry obligations The Ministry of Internal Affairs and Communications has established 22 Are there regulations specifying a basic package of technical standards of transmission for various types of broadcasting programmes that must be carried by operators’ broadcasting including digital television which provide certain technical require- distribution networks? Is there a mechanism for financing the ments, such as multiplexing, scrambling and video resolution. costs of such obligations? Media plurality In Japan, subscription rates for cable TV are relatively low and there are 26 Is there any process for assessing or regulating media therefore no general rules like must-carry obligations. As a side note, plurality (or a similar concept) in your jurisdiction? May the in relay broadcasting, for measures against poor reception, the use of authorities require companies to take any steps as a result of gap fillers plays a similar role. Currently, there are many cases where such an assessment? local governments become gap fillers. Fees shall not be charged for the viewing of relay broadcasts for measures against poor reception. The principle of excluding multiple ownership of media is stipulated by Additionally, a basic broadcaster must endeavour to ensure that the the Broadcasting Act; namely: broadcasted programmes are receivable as broadly as possible within • an existing basic broadcaster; the broadcasting area. In the event of a disaster such as a storm, heavy • a person who has control over basic broadcaster; or rain, flood, earthquake or large-scale fire, basic broadcasters shall • a person over whom the above two points have control cannot be broadcast programmes to prevent the occurrence of such disasters or granted authorisation or become another basic broadcaster, in to reduce the damage. principle.

Regulation of new media content In other words, one person cannot conduct multiple basic broadcasting 23 Is new media content and its delivery regulated differently activities. However, this principle has tended to be relaxed, as there from traditional broadcast media? How? are exceptions outlined in the Ministerial Ordinance on Definitions of Specific Officers and Controlling Relationships Related to the Business General one-to-one programme distribution on the internet is excluded of Basic Broadcasting and on Special Provisions of the Standards of from the definition of ‘broadcasting’ under the Broadcasting Act, and the Freedom of Expression, and certified broadcasting holding companies Act does not apply. have also been allowed. Cross-ownership between broadcasters and With the revision of the Broadcasting Act in 2011, broadcasting other media such as newspaper publishers is not regulated, while it by wired and wireless means other than basic broadcasting was is still prohibited for one group company to own all of the terrestrial broadly defined as general broadcasting. Basic broadcasting requires television broadcasting, the radio broadcasting and the newspaper in authorisation to be obtained from the Minister of Internal Affairs and the same area if there are no other mass media in such area. www.lexology.com/gtdt 81 © Law Business Research 2021 Japan TMI Associates

Key trends and expected changes Appeal procedure 27 Provide a summary of key emerging trends and hot topics in 29 How can decisions of the regulators be challenged and on media regulation in your country. what bases?

One broadcaster has reported that its foreign ownership ratio exceeded A person who wants to challenge a disposition by the MIC under the 20 per cent at the time of approval of the satellite broadcasting business. Radio Act or the Broadcasting Act (eg, refusal or revocation of a licence Therefore, such approval is expected to be cancelled as of 1 May 2021. of a radio station or broadcasting services) must first submit a request Moreover, it was also pointed out that one of the largest groups of basic for review to the Minister of Internal Affairs and Communications (the broadcasters in Japan had once violated the foreign ownership restric- Minister). Upon receipt of a request for review, the Minister shall, in tions. However, this was not a violation of the foreign capital regulations principle, refer the case to the Radio Regulatory Commission which at the time of approval, and the approval was not revoked because the shall commence a hearing within thirty days from the date of receipt violation of foreign ownership restrictions has now been resolved. The of the request for review. Not only the petitioner but also approved Ministry of Internal Affairs and Communications has instructed all basic interested parties may attend the hearing. The petitioner and approved broadcasters and their holding companies to report on their compliance interested party are guaranteed the opportunity to appoint an attorney, with the foreign ownership restrictions. to appear at the hearing, to make statements and to submit evidence. In Japan, under the Broadcasting Act, all persons who have The Minister shall decide on the request for review under an opinion of installed receiving equipment that can receive NHK broadcasts are the Radio Regulatory Commission within seven days from the receipt obliged to execute a contract with NHK for receiving such broadcasts. of the opinion. Any person who is dissatisfied with the decision of the In a case between NHK and an individual who had set up a TV that Minister may file an action for revocation of the decision before the could not receive NHK broadcasts, the individual won the case at the Tokyo High Court. In principle, the court shall be bound by the facts first instance in the Tokyo District Court and the court stated that the found by the Radio Regulatory Commission. individual had no obligation to execute a contract, but the Tokyo High Court recognised the individual’s obligation to subscribe, and NHK won Competition law developments the case on appeal. 30 Describe the main competition law trends and key merger The Cabinet had once approved a bill to amend the Broadcasting and antitrust decisions in the communications and media Act, which enables NHK to collect extra fees from households that sectors in your jurisdiction over the past year. do not pay NHK’s receiver’s fee, and requires NHK to use the annual surplus as a source of funds for lowering the general receiver’s fees. Nippon Telegraph and Telephone Public Corporation, which had been a However, the above-mentioned violation of foreign ownership restric- public company monopolising the domestic telecommunications market, tions has affected the bill and it was therefore suspended. It is being was privatised as NTT in 1985. The mobile telecommunications busi- reported that the bill may be re-submitted again during autumn 2021, ness of NTT was separated as NTT DOCOMO based on the governmental including provisions to improve the effectiveness of the foreign owner- policy of 1992, and NTT and NTT DOCOMO then performed their own ship restrictions. businesses as publicly listed companies since such time; however, NTT has now acquired all of the shares in NTT DOCOMO through a take-over REGULATORY AGENCIES AND COMPETITION LAW bid, and NTT DOCOMO has become a wholly owned subsidiary of NTT. Given that telecommunications companies, especially mobile Regulatory agencies phone carriers, expressed concerns related to fair competition issues 28 Which body or bodies regulate the communications and caused by the acquisition, the MIC held review conferences, and indi- media sectors? Is the communications regulator separate cated its policy to designate NTT DOCOMO as a business operator with from the broadcasting or antitrust regulator? Are there specific affiliations of NTT EAST and NTT WEST, and to prohibit NTT mechanisms to avoid conflicting jurisdiction? Is there a from appointing the same person as a director of those companies and specific mechanism to ensure the consistent application of treating other telecommunication business operators in a more disad- competition and sectoral regulation? vantageous manner regarding business related to the connection of networks. The MIC also indicated its policy of continuing to pay close The Ministry of Internal Affairs and Communications (MIC) regulates attention to the possible issues regarding fair competition caused by the communications and media sectors. The MIC also regulates the the acquisition and to review the competition rules appropriately if a broadcasting sectors. The antitrust area is regulated by the Fair Trade problem is recognised. Commission (FTC) under the Act on Prohibition of Private Monopolization and Maintenance of Fair Trade (also known as the Antimonopoly Act). Coronavirus There are no specific mechanisms to avoid conflicting jurisdic- 31 What emergency legislation, relief programmes and other tion; however, to ensure the consistent application of competition and initiatives specific to your practice area has your state sectoral regulation, the MIC and the FTC have jointly published the implemented to address the pandemic? Have any existing Guidelines for Promotion of Competition in the Telecommunications government programmes, laws or regulations been amended Business Field since November 30, 2001. These guidelines have been to address these concerns? What best practices are advisable periodically revised, and the latest version of these guidelines was for clients? issued on 18 December 2020. These guidelines provide for acts that pose a problem under the Antimonopoly Act or the Telecommunications In April 2020, January and April 2021, the government issued a state of Business Act and actions that businesses are encouraged to take from emergency, which required businesses to carry out a certain amount of the perspective of further promoting competition, etc. remote working, and this had a major impact on governmental activities. Although no law has been enacted in the telecommunications and media fields due to the spread of the coronavirus, the Ministry of Internal Affairs and Communications has taken various measures in the telecommunications and media fields, including the following measures:

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• on 19 March 2020, a request was made to telecommunications carriers, cable-TV operators, internet service providers, and other business organisations to take measures such as extending the fee-payment deadline; • a deadline postponement for the radio wave usage-fee payment; • a reduction of NHK (Japan’s public broadcaster) usage fees; • requested platform operators and mobile communication operators to provide the government with big data, etc, that statistically aggregates and analyses user movement and service usage Atsushi Igarashi history, which contributes to the prevention of the spread of the [email protected] coronavirus; • established a consultation desk for slander on social media Takuya Yamago concerning the coronavirus; and [email protected] • promoted remote working, including support for the introduc- Koshi Okabe tion of remote working and issuance of remote-working security [email protected] guidelines Yukito Nagaoka [email protected] While the government requires businesses in the telecom and media fields to postpone the payment of usage fees, opportunities to expand their services are increasing, such as them being asked to provide infor- 23rd Floor, Roppongi Hills Mori Tower, mation that contributes to public covid-19 countermeasures to prevent 6-10-1 Roppongi, Minato-ku the spread of the virus, and the spread of remote working and online Tokyo 106-6123 Japan meetings in businesses across Japan. Tel: +81 3 6438 5511 www.tmi.gr.jp

www.lexology.com/gtdt 83 © Law Business Research 2021 Mexico

Julián Garza and Paulina Bracamontes Nader Hayaux & Goebel

COMMUNICATIONS POLICY USMCA intend to promote the entrance of new operators into the Mexican market for purposes of promoting market competition that will result in Regulatory and institutional structure an improvement in the quality of telecommunication services in Mexico. 1 Summarise the regulatory framework for the communications sector. Do any foreign ownership restrictions apply to Authorisation/licensing regime communications services? 2 Describe the authorisation or licensing regime.

On 14 July 2014, the new Federal Telecommunications and Broadcasting The Federal Telecommunications and Broadcasting Law sets forth Law and the new Law for the Public Broadcasting System of the Mexican the current licensing and authorisation regime, which consists of State were published in the Official Mexican Gazette. sole licence, licence to use, enjoy or exploit frequency bands of the The Federal Telecommunications and Broadcasting Law and the radio spectrum, licence for the occupation and exploitation of orbital Law for the Public Broadcasting System of the Mexican State super- resources, and authorisations. sede the previously enacted Federal Telecommunications Law and A sole licence shall be required to provide all kinds of telecom- the Federal Radio and Television Law. Also, any provisions in the Law munications and broadcasting public services including public Wi-Fi on General Communications that conflict with those in the Federal services. The sole licence may be granted for commercial, public, private Telecommunications and Broadcasting Law will no longer be in effect. or social use, for a term of up to 30 years and may be extended for up The issuance of the new telecommunications and broadcasting to equal terms. Statutorily, the FTI shall analyse and assess the docu- legal framework derives from the constitutional reform published in ments submitted for this application within a term of 60 calendar days, the Official Mexican Gazette on 11 June 2013. This reform created the and the FTI may request additional information when necessary. Once Federal Telecommunications Institute (FTI) as an autonomous public such a term has expired and all requirements have been met, according agency, independent in its decisions and function, with its own legal to the FTI, the sole licence shall be granted. status and resources, to regulate and promote competition and efficient The Federal Telecommunications and Broadcasting Law outlines development of the telecommunications and broadcasting sectors. the current licensing and authorisation regime, which consists of a The FTI is responsible for the regulation, promotion and supervi- sole licence, licence to use, enjoy or exploit frequency bands of the sion of the use, enjoyment and exploitation of the radio spectrum, orbital radio spectrum, licence for the occupation and exploitation of orbital resources, satellite services, public telecommunication networks, and resources, and authorisations. broadcasting and telecommunications services, and has the authority to A sole licence shall be required to provide all kinds of telecom- regulate access to active and passive infrastructure, as well as to other munications and broadcasting public services including public Wi-Fi essential resources related to such industries. services. The sole licence may be granted for commercial, public, private The FTI, which supersedes the previous Federal Telecommunications or social use, for a term of up to 30 years and may be extended for up Commission, is the authority in terms of antitrust matters in broadcasting to equal terms. Statutorily, the FTI shall analyse and assess the docu- and telecommunications sectors, for which it shall exercise the powers, ments submitted for this application within a term of 60 calendar days, outlined in the Mexican Constitution, the Federal Telecommunications and the FTI may request additional information when necessary. Once and Broadcasting Law and the Federal Competition Law. such a term has expired and all requirements have been met, according According to the Federal Telecommunications and Broadcasting to the FTI, the sole licence shall be granted. Law, the FTI may issue, among others, administrative regulations, On 25 November 2013, the Mexican government published an licences and authorisations on telecommunications and broadcasting action plan called Estrategia Digital Nacional to provide public broad- matters and decide on their renewal, modification or revocation, as well band internet access through certain programmes, including the Mexico as authorising assignments or change of control, title-holding or opera- Conectado programme. Generally, the licence to provide such public tion of the business entities related to such licences and authorisations. Wi-Fi services shall be granted through a public bidding process. The Ministry of Communications and Transportation shall issue non- The licence to use, enjoy or exploit frequency bands of the radio binding technical opinions on the above-mentioned matters. spectrum for a determined use and the occupation and exploitation of The Mexican Constitution and the Foreign Investment Law outlined orbital resources, shall be granted for a term of up to 20 years and may that direct foreign investment is allowed up to 100 per cent for telecom- be extended for up to equal terms. When the exploitation of the services munications and satellite services, and up to 49 per cent for broadcasting subject to such licence requires a sole licence, it may be granted in the services, subject to a standard of reciprocity. same administrative act. The United States–Mexico–Canada Agreement (USMCA), which The licence for the use, enjoyment or exploitation of the radio spec- entered into full force and effect on 1 July 2020, and replaced the North trum for commercial, and in some cases, for private use, shall only be American Free Trade Agreement; the new provisions contemplated in the granted through a public auction.

84 Telecoms & Media 2021 © Law Business Research 2021 Nader Hayaux & Goebel Mexico

The radio spectrum licences for public or social use shall be The radio spectrum licences for public or social use shall be granted through direct allocation for a term of up to 15 years and may granted through direct allocation for a term of up to 15 years and may be extended for up to equal terms. This licence shall not be for profit be extended for up to equal terms. This licence shall not be for profit purposes, and licensees shall not share the radio spectrum with third purposes, and licensees shall not share the radio spectrum with third parties. Upon meeting the requirements of this application, the FTI shall parties. Upon meeting the requirements of this application, the Institute resolve accordingly within a term of 120 business days after submitting shall resolve accordingly within a term of 120 business days after the application. submitting the application. Authorisation from the FTI is required to: Authorisation from the Federal Telecommunications Institute is • incorporate and operate or exploit a telecommunications service required to: provider without licensee status; • incorporate and operate or exploit a telecommunications service • install, operate or exploit terrestrial stations to transmit satel- provider without licensee status; lite signals; • install, operate or exploit terrestrial stations to transmit satel- • install telecommunications and broadcasting equipment that lite signals; crosses the national borders; • install telecommunications and broadcasting equipment that • exploit landing rights; and crosses the national borders; • temporarily use spectrum bands for diplomatic visits. • exploit landing rights; and • temporarily use spectrum bands for diplomatic visits. The installa- The installation and operation of transmitting earth stations do not tion and operation of transmitting earth stations do not require any require any type of authorisation. type of authorisation. These authorisations shall be valid for a term of up to 10 years and may be extended for up to equal terms; the process to obtain such These authorisations shall be valid for a term of up to 10 years and may authorisation shall be resolved no later than 30 business days after be extended for up to equal terms; the process to obtain such authorisa- submitting the application. Once this period expires with no resolution tion shall be resolved no later than 30 business days after submitting from the FTI, the authorisation shall be considered as granted. the application. Once this period expires with no resolution from the According to the Federal Telecommunications and Broadcasting Institute, the authorisation shall be considered as granted. Law, current licensees may obtain authorisation from the FTI to provide According to the Federal Telecommunications and Broadcasting additional services to those indicated in the original licence or to migrate Law, current licensees may obtain authorisation from the Institute to to a sole licence. provide additional services to those indicated in the original licence or The applicable payable fees regarding the licensing and authorisa- to migrate to a sole licence. tion regime are the following: The applicable payable fees regarding the licensing and authorisa- • a sole licence to provide all kinds of telecommunications and tion regime are the following: broadcasting public services, 20,752.69 Mexican pesos; for its • sole licence to provide all kinds of telecommunications and renewal, 9,181.56 Mexican pesos; broadcasting public services, 20,752.69 Mexican pesos, and for its • a licence to use, enjoy or exploit the radio spectrum for a deter- renewal, 9,181.56 pesos; mined use or the occupation and exploitation of orbital resources, • licence to use, enjoy or exploit the radio spectrum for a determined 36,302.38 Mexican pesos; for its renewal, 15,365.18 Mexican pesos; use or for the occupation and exploitation of orbital resources, • authorisation to exploit landing rights, 11,137.38 Mexican pesos; for 36,302.38 pesos, and for its renewal, 15,365.18 pesos; its renewal, 6,313.22 Mexican pesos; • authorisation to exploit landing rights, 11,137.38. pesos, and for its • authorisation to incorporate and operate or exploit a telecommuni- renewal, 6,313.22. pesos; cations service provider without licensee status, 7,179.28 Mexican • authorisation to incorporate and operate or exploit a telecommu- pesos; for its renewal, 3,945.74 Mexican pesos; nications service provider without licensee status, 7,179.28 pesos, • authorisation to install, operate or exploit earth stations to transmit and for its renewal, 3,945.74 pesos; satellite signals, 4,289.49 Mexican pesos; for its renewal, 3,287.27 • authorisation to install, operate or exploit earth stations to transmit Mexican pesos; satellite signals, 4,289.49 pesos, and for its renewal, 3,287.27 pesos; • migrating to a sole licence, 13,810.08 Mexican pesos; and • migrating to a sole licence, 13,810.08 pesos; and • authorisation to provide an additional service to those indicated in • authorisation to provide an additional service to those indicated in the original licence that use the radio spectrum, 22,931.29 Mexican the original licence that use the radio spectrum, 22,931.29 pesos, pesos; not using the radio spectrum, 8,384.33 Mexican pesos. and that do not use the radio spectrum, 8,384.33 pesos.

On 25 November 2013, the Mexican government published an action plan Flexibility in spectrum use called Estrategia Digital Nacional with the purpose of providing public 3 Do spectrum licences generally specify the permitted use broadband internet access through certain programmes, including the or is permitted use (fully or partly) unrestricted? Is licensed Mexico Conectado programme. Generally, the licence to provide such spectrum tradable or assignable? public Wi-Fi services shall be granted through a public bidding process. The licence to use, enjoy or exploit frequency bands of the radio Spectrum licences granted for commercial or private use shall contain, spectrum for a determined use and for the occupation and exploita- among other things, the permitted frequency band subject to the licence, tion of orbital resources, shall be granted for a term of up to 20 years usage terms and geographic coverage zone where they shall be used, and may be extended for up to equal terms. When the exploitation of enjoyed or exploited. Only the spectrum licences granted for commer- the services subject to such licence requires a sole licence, it may be cial or, in some cases, private use, may be assigned to third parties granted in the same administrative act. with prior authorisation from the FTI. Licensed spectrum is generally The licence for the use, enjoyment or exploitation of the radio spec- not tradable. trum for commercial, and in some cases, for private use, shall only be granted through a public auction. www.lexology.com/gtdt 85 © Law Business Research 2021 Mexico Nader Hayaux & Goebel

Ex-ante regulatory obligations Structural or functional separation 4 Which communications markets and segments are subject to 5 Is there a legal basis for requiring structural or functional ex-ante regulation? What remedies may be imposed? separation between an operator’s network and service activities? Has structural or functional separation been The public telecommunications network licensees shall, among others: introduced or is it being contemplated? • interconnect, directly or indirectly, their networks at the request of other licensees, and shall refrain from performing acts to delay, Structural and functional separation has been introduced in the Federal obstruct, or cause service inefficiency; Telecommunications and Broadcasting Law, thus the FTI may impose • offer and allow effective number portability; measures to promote competition in such sectors, including asymmetric • refrain from charging long-distance communications to national regulation, such as unbundling of essential resources and functional or destinations; structural separation of preponderant economic agents. • provide non-discriminatory service to the public; and The Law defines ‘unbundling’ as the separation of physical • refrain from establishing contractual or any other type of barriers elements, including fibre optic, technical and logical, functions or to prevent other licensees from installing or accessing telecommu- services of the local networks of the preponderant economic agent in nications infrastructure in shared real estate properties. the telecommunications sector, or the agent with national substantial power in the relevant market of access services to end users. Licensees of public telecommunications networks providing mobile The FTI also has the authority to establish measures and impose services may freely sign agreements regarding visiting user services; specific obligations to allow the effective unbundling of the local the execution of such agreements shall be mandatory to preponderant networks of the preponderant economic agent in the telecommunica- economic agents in the telecommunications sector or agents with tions sector or the agent with national substantial power in the relevant substantial power (as those terms are defined hereinafter). market of access services to end users. Also, the Federal Telecommunications and Broadcasting Law Breaching or violating the FTI’s resolutions regarding local network outlines that public telecommunications network licensees shall adopt a unbundling, divestiture of assets, rights or other necessary resources transparent approach to guarantee interconnection and interoperability or breach of asymmetric regulation, may result in the revocation of the of their networks with other licensees, on a non-discriminatory basis. corresponding licences and authorisations. The FTI is vested with the authority to determine the existence of preponderant economic agents in broadcasting and telecommunica- Universal service obligations and financing tions sectors, and to impose the measures deemed necessary to allow 6 Outline any universal service obligations. How is provision of competition and free-market participation. These measures may include, these services financed? among others, service offer and quality, exclusive agreements, usage limitations on telecommunications terminal equipment, asymmetric The Mexican Constitution and the Federal Telecommunications and regulation on tariffs and network infrastructure, including unbundling Broadcasting Law impose upon the state certain responsibilities of essential resources and accounting, functional or structural separa- regarding public telecommunications services. The state shall guarantee tion of such agents. that telecommunication services, including broadband and internet, are The FTI shall define economic agents who have, directly or provided under conditions of competition, quality, plurality, universal indirectly, national market participation of more than 50 per cent in tele- coverage, interconnection, convergence, continuity and free access. communications and broadcasting services, as preponderant. Market The Mexican Constitution defines ‘universal coverage’ as general participation shall be measured by the number of users, audience, public access to telecommunications services that shall be subject to network traffic or capacity used. availability, affordability and accessibility conditions. Consequently, the Further, the FTI shall declare whether an economic agent Ministry of Communications and Transportation shall prepare annually has substantial power in telecommunications and broadcasting a social coverage programme and a public connectivity programme. The relevant markets, under the procedure established in the Federal purpose of these social programmes is to increase network coverage Competition Law. and penetration of telecommunications services in such priority areas Also, the FTI is empowered to declare, at any time, preponderant as determined by the Ministry. economic agents, as well as economic agents with substantial power The sole licence and spectrum licence for commercial and private in any of the relevant markets of the telecommunications and broad- use shall consider, among others, the programmes and commitments casting sectors. regarding investments, quality, geographic, demographic or social Preponderant economic agents in the telecommunication sector or coverage zones, public connectivity and contribution to universal agents with substantial power shall be subject, among other things, to coverage determined by the FTI in considering the annual programmes the following obligations: prepared by the Ministry. • to register with the FTI a list of unbundled interconnection services; In 2002, under the provisions outlined in the previous Federal • to submit before the FTI at least once a year; Telecommunications Law, a telecommunications social coverage fund • to separate accounting and cost-accounting of interconnection was created to ensure the provision of telecommunications services services; and in Mexican territory and to offer to fund to public telecommunica- • not to carry out practices that prevent or limit the efficient use of tions network licensees aimed at rural communities. To this end, the infrastructure devoted to interconnection. Mexican Congress approved funding for the Telecommunications Social Coverage Fund, which is governed by a technical committee composed To promote competition, the FTI has the authority to impose specific of six federal government representatives. obligations and limitations on agents with substantial power on matters In connection with the foregoing, the productive subsidiary regarding information, quality, rates, commercial offers and billing. (empresa productiva subsidiaria) of the Federal Electricity Commission called CFE Telecommunications and Internet for All was incorporated on 2 August 2018, to provide telecommunications services, on a non-profit basis, to guarantee the right of access to information and communication

86 Telecoms & Media 2021 © Law Business Research 2021 Nader Hayaux & Goebel Mexico technologies, including broadband and internet. The service provided by Net neutrality CFE Telecomunicaciones e Internet para Todos will be non-profit and its 9 Are there limits on an internet service provider’s freedom to objective is to reach remote and marginalised communities. control or prioritise the type or source of data that it delivers? In 2020, to provide high-quality internet access throughout Mexican Are there any other specific regulations or guidelines on net territory, CFE Telecommunications and Internet for All executed an neutrality? agreement with a private entity, so that the latter provides its wholesale services consisting, in principle, in the implementation of telecom- Licensed and authorised internet service providers shall comply with, munications infrastructure. The goal is to make possible one of the among others, the following guidelines regarding network neutrality: largest projects to overcome the digital gap, provide connectivity to • free choice: users may access any content, application or service rural communities in Mexico and reach regions that lack connectivity. offered by the licensee or authorised service provider, within the In its first stage, the project between the companies involves the instal- legal applicable framework, without access being limited, deterio- lation of 2,000 home broadband services at 1,000 priority care areas, rated, restricted or discriminated against; which will allow schools, clinics and integration centres in small rural • non-discrimination: providers shall refrain from obstructing, inter- communities to benefit from the connectivity achieved through such an fering with, inspecting, filtering or discriminating among content, alliance. No additional official information on the progress of this project applications or services; has been disclosed. • privacy: providers shall maintain user privacy and network security; and Number allocation and portability • transparency and information: providers shall publish on their web 7 Describe the number allocation scheme and number page the information regarding the features of the service offered, portability regime in your jurisdiction. including traffic management policies and network administration authorised by the FTI, as well as the speed, quality, nature and The Federal Telecommunications and Broadcasting Law grants the guaranteed service. FTI the authority to create, update and manage the technical plan for number allocation. Such a plan outlines that licensees and authorised Although zero rating of data transmission could affect the guidelines telecommunication service providers shall obtain number allocation by and regulations on net neutrality and provided for in the Federal submitting an application before the FTI. In general, such request shall Telecommunications and Broadcasting Law, leading mobile telephone be submitted at least three or four months (depending on the type of companies in Mexico have expanded their offerings of free navigation number allocation requested) before the date on which such number for social networks, messaging applications and other online services. allocation is intended to be used. The process of obtaining number allo- The foregoing derives from the fact that the FTI has not determined cation shall be resolved no later than 60 business days after submitting whether these offers affect or contravene the provision of the law. the application. To determine whether the requested number allocation Bandwidth throttling is not permitted. On 28 June 2018, the Advisory proceeds, the FTI shall take into account the following: use given to Council of the FTI issued a non-binding recommendation through which, previous number allocations, and number availability. it urged all participants in the telecommunications sector to avoid The Federal Telecommunications and Broadcasting Law outlines practices such as zero rating and bandwidth throttling. The project of that users have the right to keep the same telephone number when the Guidelines for Networks Operations concerning the neutrality prin- changing service provider. Effective portability shall be completed ciples provided under article 145 of the Federal Telecommunications within a period not exceeding 24 hours upon submitting the corre- and Broadcasting Law, includes provisions in connection with the zero- sponding application to the service provider. This provision entered into rating practice. These guidelines were submitted to public consultation force on 10 February 2015. from 18 December 2019 to 13 April 2020. On 18 February 2021, a federal Mexican court issued a resolu- Customer terms and conditions tion in connection with an amparo proceeding filed by Red en Defensa 8 Are customer terms and conditions in the communications de los Derechos Digitales and Observacom, under which it ordered sector subject to specific rules? the FTI to issue the Guidelines for Network Operations concerning the neutrality principles, as provided under article 145 of the Federal Customers are entitled to the rights provided for in the Federal Telecommunications and Broadcasting Law by 30 June 2021 at the latest. Telecommunications and Broadcasting Law, the Federal Consumer The FTI shall issue such guidelines to protect net neutrality, in light Protection Law and the Data Protection Law. of certain principles such as free choice, non-discrimination, privacy, In general, customers have the right, among others, to execute and transparency and minimum quality requirements in connection with have knowledge of the commercial conditions outlined in the standard internet access provided by concessionaires and authorised entities. form contract registered before the Consumer Protection Agency. Such standard form contract shall be registered with the agency and shall Platform regulation comply with the provisions of the Federal Telecommunications and 10 Is there specific legislation or regulation in place, and have Broadcasting Law, the Federal Consumer Protection Law and other there been any enforcement initiatives relating to digital applicable provisions. Also, under the Data Protection Law, agreements platforms? shall comply with provisions thereof and customers shall be afforded the rights thereunder. In Mexico, there are no laws or regulations that currently regulate digital platforms specifically. The Mexican FinTech Law was published in the Official Mexican Gazette on 9 March 2018 (effective 10 March 2018), to regulate financial services provided by financial technology companies or institutions, their organisation and operation. In connection with the Mexican labour legislation, in May 2021, a bill was filed with the Mexican Congress to provide minimum labour rights in favour of the employees of transportation platforms, and in www.lexology.com/gtdt 87 © Law Business Research 2021 Mexico Nader Hayaux & Goebel

general to improve their working conditions. If approved, the bill will Cybersecurity amend several provisions of the Mexican Federal Labour Law. 13 Is there specific legislation or regulation in place concerning Further, there is a bill currently in discussion in the Mexican cybersecurity or network security in your jurisdiction? Congress to amend several provisions of the Federal Telecommunications and Broadcasting Law, so that over-the-top (OTT) platforms (ie, those In Mexico, there are no laws or regulations that currently regulate cyber- platforms that provide video and streaming services to end users) security specifically. On 13 November 2017, the Mexican government are obliged to include Mexican content in at least 30 per cent of their published the Cybersecurity National Strategy. This strategy defines catalogues. Also, the imposition of a 7 per cent tax on foreign OTT plat- objectives and cross-cutting themes and reflects the guiding principles forms has been proposed to the Mexican Congress. This would imply an regarding the articulation of efforts from individuals, civil society, and amendment to Mexican tax laws. private and public organisations in the field of cybersecurity. The Cybersecurity National Strategy defines cybersecurity as Next-Generation-Access (NGA) networks a set of policies, controls, procedures, risk-management methods 11 Are there specific regulatory obligations applicable to and standards associated with the protection of society, government, NGA networks? Is there a government financial scheme to economics and national security in cyberspace and public telecommu- promote basic broadband or NGA broadband penetration? nication networks. In October 2017, the Mexican government created the Cybersecurity There is no specific regulation regarding NGA networks nor are there Sub-Commission, chaired by the Ministry of the Interior. government financial schemes to promote broadband penetration in Further, the USMCA provides a chapter on digital commerce. Among Mexican territory; however, the Mexican Constitution and the Federal others, the implementation of such provisions seeks to strengthen the Telecommunications and Broadcasting Law outlined that the executive collaboration measures between the parties thereto to mitigate risks branch shall publish the broadcasting and telecommunications policies and incidents related to cybersecurity. and perform actions to ensure broadband internet access in buildings and facilities of the federal government. Each state shall do the same in Big data their own jurisdiction. 14 Is there specific legislation or regulation in place, and have there been any enforcement initiatives in your jurisdiction, Data protection addressing the legal challenges raised by big data? 12 Is there a specific data protection regime applicable to the communications sector? In Mexico, there are no laws or regulations that currently regulate big data specifically; also, there have been no relevant initiatives on this Public telecommunications network licensees and authorised entities matter. Companies seeking to participate in big data operations shall shall keep a record and control of all communications made, in any ensure that their proposed activities comply with the Data Protection form, to identify accurately the following information: Law that applies to the data involved in their operations. • name and address of the user; • type of communication (voice, voicemail, conference and data), Data localisation additional services and messaging or multimedia services used; 15 Are there any laws or regulations that require data to be • necessary information to trace and identify the origin and destina- stored locally in the jurisdiction? tion of mobile communications; • necessary information to determine the date, time and duration of In Mexico, there are no laws or regulations that currently regulate data the communication, as well as messaging or multimedia services; localisation specifically. The Data Protection Law allows cross-border • record of date and time of the first activation of the service and transfers of personal information, provided that the data subject gives location tag from the activation of the service; and informed prior consent. • digital location of the geographic positioning of the corresponding telephone lines. Key trends and expected changes 16 Summarise the key emerging trends and hot topics in For these purposes, the licensee shall keep the above information communications regulation in your jurisdiction. during the first 12 months in systems that allow real-time analysis and delivery to competent authorities through electronic media. Upon In Mexico, communications and media sectors fall under the same legal completion of said period, the licensee shall keep the information for framework; therefore, issues regarding emerging trends and hot topics an additional 12 months in electronic storage systems; in which case, will be addressed in question 27. delivery of such information to the competent authorities shall take place within 48 hours upon request notification. MEDIA In general, the protection, processing and control of personal data are governed by the Data Protection Law, which outlines that the Regulatory and institutional structure processing of personal information is subject to the consent of the 17 Summarise the regulatory framework for the media sector in owner. Such consent may be implied, which is sufficient to process your jurisdiction. general personal data, whereas express consent is required to process financial information, and written consent is required to process sensi- The key regulatory framework for the media sector in Mexico is tive information. comprised of the following statutes, the Federal Telecommunications and Broadcasting Law, the Law for the Public Broadcasting System of the Mexican State and the Law on General Communications. According to the said regulatory framework, the Federal Telecommunications Institute (FTI) is vested with the authority to regulate, promote and oversee the use, enjoyment and exploitation of the

88 Telecoms & Media 2021 © Law Business Research 2021 Nader Hayaux & Goebel Mexico radio spectrum, orbital resources, satellite services, public telecom- gender, age, disability, social background, health condition, religion, munications networks, and broadcasting and telecommunications sexual orientation, marital status or anything else that undermines provisions. human dignity or to nullify or impair the rights and freedoms of indi- The FTI is empowered to grant, revoke, renew or modify licences viduals shall be prohibited. and authorisations on broadcasting and telecommunications sectors, The spectrum licence for broadcasting purposes shall be granted as well as to authorise assignments or changes of control of licensed for a term of up to 20 years and may be extended for up to equal terms. and authorised individuals or business entities. The FTI also has the This licence for commercial and, in some cases, for private use, shall be authority to regulate matters related to antitrust and fair trading in granted only through public auctions with prior payment of the corre- such sectors. sponding fee. When requesting a spectrum licence to provide broadcasting Ownership restrictions services that involve the participation of foreign investment, a prior 18 Do any foreign ownership restrictions apply to media and favourable opinion shall be required from the Foreign Investment services? Is the ownership or control of broadcasters Commission, and this agency shall verify the limits of the foreign otherwise restricted? Are there any regulations in relation investment outlined in the Mexican Constitution and the Foreign to the cross-ownership of media companies, including radio, Investment Law. television and newspapers? When granting a broadcasting licence, the FTI may consider the following factors, among others: According to the Foreign Investment Law, direct foreign investment is • economic proposal; allowed up to 49 per cent for both broadcasting services, subject to a • coverage, quality and innovation; standard of reciprocity, and printing and publishing newspapers for • prevention of market concentration that conflicts with the distribution in Mexican territory. public interest; There is no specific regulation regarding cross-ownership of news- • possible entry of new competition into the market; and paper companies and telecommunications and broadcasting companies. • consistency with the licence programme. However, the Federal Telecommunications and Broadcasting Law sets limits regarding broadcasting and telecommunications licensees that Foreign programmes and local content requirements prevent or restrict access to plural information in the same market or 20 Are there any regulations concerning the broadcasting the same geographic coverage zone. of foreign-produced programmes? Do the rules require a For that purpose, the FTI shall order pay TV licensees to include in minimum amount of local content? What types of media fall their service those channels that carry news or information programmes outside this regime? of public interest, to guarantee access to plural information promptly. Also, pay TV licensees shall include at least three channels, in which the There is no specific regulation that restricts or limits the amount of local or content is predominantly produced by national independent program- foreign content broadcasted. However, the Federal Telecommunications mers, whose funding is mostly Mexican in origin. and Broadcasting Law outlines certain rules and incentives regarding content requirements that shall be followed by licensees. Licensing requirements Broadcasted programming shall promote, among other things: 19 What are the licensing requirements for broadcasting, • family integration; including the fees payable and the timescale for the • sound child development; necessary authorisations? • artistic, historical and cultural principles; and • equality between men and women. Under the Federal Telecommunications and Broadcasting Law, the FTI is empowered to grant the sole licence. The sole licence grants the right To promote free and harmonious child and adolescent development, to provide, in a convergent manner, all kinds of public telecommuni- broadcasting aimed at this sector shall, among other criteria: cations and broadcasting services. The licensee requiring the use of • broadcast programmes and information to support cultural, ethical frequency bands of the radio spectrum for broadcasting purposes shall and social principles; obtain the appropriate licence separately. • avoid content that stimulates or justifies violence; and The sole licence shall be granted for commercial, public, private • foster interest in knowledge, particularly concerning scientific, or social use for a term of up to 30 years and may be extended for up artistic and social matters. to equal terms. The interested party in obtaining a sole licence shall submit a request containing, at least, the following information: Broadcasting licensees shall use the Spanish language in their trans- • name and address of the applicant; missions. If transmissions are in a foreign language, subtitles or • general characteristics of the project; and translation into Spanish shall be used. The use of foreign languages • documents and information attesting to their technical, legal and without subtitles and translation into Spanish may be authorised by the administrative conditions. Ministry of Interior. Pay TV and audio licensees shall retransmit broadcasting signals To obtain the sole licence from the FTI shall take a minimum of 60 of federal institutions free of charge, and shall reserve channels for the calendar days upon submitting the application; however, the FTI may transmission of television signals from federal institutions, as indicated request additional information where necessary. Once the agency has by the executive branch, under the following: concluded the analysis and assessment of the documents submitted for • one channel, when the service contains between 31 and 37 channels; this application within such period, and all requirements have been met, • two channels, when the service contains between 38 and 45 the sole licence shall be granted. channels; and The services provided by the licensees shall not grant the privi- • three channels, when the service contains between 46 and lege or distinction to create any kind of discrimination, and in the case 64 channels. of individuals, all discrimination motivated by ethnic or national origin, www.lexology.com/gtdt 89 © Law Business Research 2021 Mexico Nader Hayaux & Goebel

If there are more than 64 channels, the reserve shall increase by one Regulation of new media content channel for every 32 channels. 23 Is new media content and its delivery regulated differently When the service contains up to 30 channels, the Ministry of from traditional broadcast media? How? Communications and Transportation may require that a specific channel devote up to six hours daily to transmit programming indicated by the There is no specific regulation regarding new media content; however, Ministry of the Interior. the right to information, expression and to receive content through The incentives for licensees regarding local content programming public broadcasting services and pay TV services is free, and shall not are that those covering at least 20 per cent of their programming with be subject to any judicial or administrative prosecution or investigation, national production may increase advertising time up to two percentage nor any limitation or prior censorship, and shall be exercised under the points, and those covering at least 20 per cent of their programming provisions of the Mexican Constitution, international treaties and appli- with national independent production may increase advertising time up cable laws. to five percentage points. Digital switchover Advertising 24 When is the switchover from analogue to digital broadcasting 21 How is broadcast media advertising regulated? Is online required or when did it occur? How will radio frequencies advertising subject to the same regulation? freed up by the switchover be reallocated?

The Federal Telecommunications and Broadcasting Law outlines that The transition to digital broadcasting went into effect on 31 December broadcasting, pay TV, programmers and signal operator licensees shall 2015. Original licensees using the 700MHz frequency band freed up by maintain a prudent balance between advertising and programming the switchover shall return them to the Mexican government. transmitted daily. At least 90MHz of spectrum freed up by the digital switchover shall Broadcasting licensees shall apply, among others, the be reallocated to Red Compartida, the shared public telecommunica- following rules: tions network. • that in television stations, commercial advertising time shall not exceed 18 per cent of the total transmission time per channel; and Digital formats • in radio stations, commercial advertising time shall not exceed 40 25 Does regulation restrict how broadcasters can use their per cent of the total transmission time per channel. spectrum?

Pay TV licensees shall transmit, daily and per channel, up to six minutes The policy for the transition to Digital Terrestrial Television (DTT) of publicity in every hour of transmission. For this purpose, publicity outlines the following rules, among others, regarding digital formats: contained in retransmitted broadcast signals and own channel adver- • A/53 ATSC is the transmission standard that shall be used by tele- tising shall not be deemed as publicity. vision licensees; • television licensees transmitting DTT shall transmit at least one Must-carry obligations channel with A/53 ATSC; and 22 Are there regulations specifying a basic package of • fixed DTT services shall be transmitted in standard definition quality. programmes that must be carried by operators’ broadcasting distribution networks? Is there a mechanism for financing the On 17 February 2015, the General Guidelines for Multi-Channelling costs of such obligations? Access were published in the Official Mexican Gazette to regulate the authorisation and operate conditions for multi-channelling access. Such Broadcast television service licensees shall enable pay TV service licen- authorisation shall be granted by the FTI. sees to retransmit their signal, free of charge and in a non-discriminatory Broadcasting licensees with access to television multi-channelling manner, within the same geographic coverage zone, in full, simultane- shall transmit at least one channel in high-definition quality, under the ously and without any changes, including advertising, and with the same terms provided for in the policy for the transition to DTT. quality of the broadcast signal. Pay TV service licensees shall also retransmit the broadcast televi- Media plurality sion signal, free of charge and in a non-discriminatory manner, within 26 Is there any process for assessing or regulating media the same geographic coverage zone, in full, simultaneously and without plurality (or a similar concept) in your jurisdiction? May the changes, including advertising and with the same quality of the broad- authorities require companies to take any steps as a result of casted signal, and shall include such retransmission in their services, such an assessment? with no additional cost. Satellite pay TV service licensees shall only retransmit broadcast No specific media plurality rules are in place. The Mexican Constitution signals with coverage of 50 per cent or more of the Mexican territory. outlines that the state shall guarantee that telecommunications and All pay TV licensees shall retransmit broadcast signals by federal broadcasting services are provided, subject to, among other conditions, institutions. competition, quality and plurality. Public telecommunications networks or broadcasting televi- Also, the Federal Telecommunications and Broadcasting Law sion licensees, declared by the FTI as agents with substantial power outlines provisions regarding cross-ownership and rights of the audi- in either market or as a preponderant economic agent, shall not be ence, in which plurality is contemplated. Such rights include providing entitled to the gratuitous rule of retransmitting signals and under no the users with the benefits of culture, plurality and authenticity of the circumstance shall this be reflected as an additional cost of the services information. provided to users. On 6 May 2019, the FTI initiated an investigation on Telmex, for incurring relative antitrust practices in the telecommunications sector. This law requires certain conduct from licensees regarding cross- ownership, which shall not refrain or limit access to plural information.

90 Telecoms & Media 2021 © Law Business Research 2021 Nader Hayaux & Goebel Mexico

Key trends and expected changes through control of such data and information. Nevertheless, this amend- 27 Provide a summary of key emerging trends and hot topics in ment has been severely criticised because it violates the privacy rights media regulation in your country. of residents in Mexico. Legal entities and individuals shall be entitled to promote juicios de amparo to limit the applicability of this amendment. On 21 March 2018, the Red Compartida network started operations with more than 30 per cent coverage in the country. Red Compartida REGULATORY AGENCIES AND COMPETITION LAW offers coverage in 48 different commercial zones and 76 towns, the ‘magic villages’, covering about 62 per cent of the population, and with Regulatory agencies an expected coverage of 70 per cent by the end of 2021 and 92 per 28 Which body or bodies regulate the communications and cent by 2024. media sectors? Is the communications regulator separate Also, in June 2018, the guidelines of the public bidding for the expan- from the broadcasting or antitrust regulator? Are there sion and modernisation of the public network known as Red Troncal mechanisms to avoid conflicting jurisdiction? Is there a were issued; but on 15 August 2019, President Obrador cancelled the specific mechanism to ensure the consistent application of public bidding on the basis that it had to be modified to guarantee the competition and sectoral regulation? constitutional right of access and use of information and knowledge technologies to the entire population, and specifically to those in poor The Federal Telecommunications Institute (FTI) is vested with the and marginalised communities. Instead of the public bidding for Red authority, as an autonomous body, independent in its decisions and Troncal, the federal government promoted public bidding for the imple- functions, to regulate the communications and media sectors in Mexico. mentation of 50,000 kilometres of fibre-optic cable. The FTI also has the authority in antitrust matters related to telecommu- To provide the services that should have been provided by nications and broadcasting sectors, under the Federal Competition Law. the Red Troncal network, the federal government created the CFE Telecomunicaciones e Internet para Todos productive subsidiary Appeal procedure corporation that is in charge of providing a non-profit internet service 29 How can decisions of the regulators be challenged and on to approximately 40 million people who currently have no broad- what bases? band access. On 30 November 2018, former US President Trump, Canadian General rules and actions from the FTI may be challenged as a matter Prime Minister Trudeau and former Mexican President Nieto signed the of law or procedure only through an indirect amparo trial and shall not United States–Mexico–Canada Agreement (USMCA), which was rati- be subject to injunction. This trial shall be heard by specialised judges fied by the Mexican Congress on 19 June 2019, and became effective and courts in matters regarding antitrust, telecommunications and on 1 July 2020. Chapter 18 of the USMCA includes several provisions broadcasting. for purposes of promoting the offer of telecommunications services in the American, Mexican and Canadian markets, by accomplishing better Competition law developments conditions through enhanced and effective competition. For instance, 30 Describe the main competition law trends and key merger article 18.4 of the USMCA specifies that each of the parties shall ensure and antitrust decisions in the communications and media that a supplier of public telecommunications services in its territory sectors in your jurisdiction over the past year. provides, directly or indirectly within its territory, interconnection with a supplier of public telecommunications services of another party, under In August 2017, the Supreme Court ruled that the FTI is the sole regu- no discriminatory terms, conditions and rates. Further, the USMCA also lator in matters of telecoms and media. Such ruling resulted in the provides that the telecommunications regulatory body of each of the elimination of the zero interconnection rate exclusively for the benefit parties (in the case of Mexico, the FTI) shall be vested with the authority of one of the players in the industry, which was an asymmetric reso- to require interconnection at reasonable rates. lution imposed by Congress (not by the FTI) on the preponderant On 17 April 2019, the FTI issued public bidding for the conces- economic agent in the telecommunications industry. Subsequently, the sion of the use, deployment and commercial exploitation of 40MHz of FTI imposed a new interconnection rate for the benefit of such a player radioelectric spectrum available in the frequency band 2000-2020/2180- as a preponderant economic agent in the telecommunications industry. 2200MHz or the provision of the Complementary Land Service of the Such interconnection rate was applicable during 2018 and resulted in Mobile Satellite Service. more than a 50 per cent decrease of the asymmetric regulation previ- Mexico is preparing to deploy 5G, this spectrum will give us greater ously imposed on such preponderant economic agent. Competitors of capacity, massive connectivity and ultra-high reliability. This will allow the telecommunications preponderant economic agent have expressed for autonomous driving vehicles, smart cities, real-time industrial appli- their disappointment and dissatisfaction with such a new interconnec- cations and massive connectivity. Also, they will be safer networks, tion rate. Additionally, in April 2018, the Supreme Court issued a second consume less energy and will facilitate financial technology. The 5G ruling which also resulted in the elimination of the zero interconnection internet network will launch in Mexico in about four years’ time, but rate, but this time also for the benefit of other entities. work is already underway to achieve this. Mexico is expected to reach Also, several telecommunications network operators complained 50 per cent coverage of 5G by 2025, which would make Mexico the first to the FTI about various defaults of the obligations imposed on the Latin American country to implement this technology. telecommunication’s preponderant economic agent, with no sanc- In April 2021, an amendment to the Federal Telecommunications tions. On 27 February 2018, the FTI approved the unbundling plan for and Broadcasting Law ordering the creation of a registry that shall the preponderant economic agent in the telecommunications industry, record the biometric data of mobile services’ users, entered into full known as the Functional Unbundling Plan. According to this plan, the force and effect and managed by the FTI. Under these amendments, new company shall exclusively provide wholesale services. telecommunications carriers such as America Movil, AT&T and others will be obliged to collect customers’ data and make the corresponding filings with the FTI. The parliamentary party that promoted this bill argued that it seeks to prevent kidnapping and telephone extortion www.lexology.com/gtdt 91 © Law Business Research 2021 Mexico Nader Hayaux & Goebel

On 26 March 2020, the FTI issued temporary measures under which, in Julián J Garza [email protected] some cases, terms in connection with proceedings managed by such authority were suspended due to health and sanatory measures. Other Paulina Bracamontes Mexican authorities, such as the financial authorities, issued similar [email protected] provisional measures. On 3 July 2020, in support of the covid-19 health emergency, the Torre Arcos, Paseo de los Tamarindos 400-B FTI transferred 207 million Mexican pesos to the Federal government to 7th Floor focus on defined actions to combat the health emergency. The Institute Bosques de las Lomas and Ministry of Finance and Public Credit entered into a collaborative 05120 Mexico City agreement to contribute such resources. Mexico Mexican mobile virtual operators that utilise Red Compartida, by Tel: +52 55 4170 3000 order of the FTI, have launched the Stay-at-Home plan, to ensure that Fax: +52 55 2167 3099 no one remains disconnected due to the pandemic. This plan includes www.nhg.com.mx unlimited calls, short message servicing and 10GB for internet browsing at 100 Mexican pesos per month, including free calls to the emergency services to the number assigned to the Health Contingency, as well as free browsing on the official government portal on the coronavirus. Finally, concessionaires of the Mexican Independent Telecommunications Association will provide support through the emergency plan Life Line. Therefore, users who are unable to pay for internet connection will continue to receive fixed internet with a speed of 2Mbps, access to national channels, educational, news and cultural bar of the public broadcasting system.

92 Telecoms & Media 2021 © Law Business Research 2021 Nigeria

Chukwuyere E Izuogu, Otome Okolo and Tamuno Atekebo Streamsowers & Köhn

COMMUNICATIONS POLICY directory services, internet exchange, international gateway, international cable infrastructure, landing station services, collocation Regulatory and institutional structure services and commercial basic radio communications network 1 Summarise the regulatory framework for the communications services; and sector. Do any foreign ownership restrictions apply to • a class licence, which is a type of general authorisation in which communications services? the terms and conditions or obligations are common to all license holders. It requires only registration with the NCC for applicants Nigeria’s communications sector is primarily regulated by the Nigerian to commence operation. Some of the services subject to a class Communications Act (NCA) and the Wireless Telegraphy Act (WTA). licence include sales and the installation of terminal equipment The NCA established the Nigerian Communications Commission (NCC), (including mobile phones and HF, VHF or UHF radio, etc), repairs which is charged with the responsibility of regulating the communi- and maintenance of telecoms facilities, cabling services, telecen- cations sector. The Minister of Communications and Digital Economy tres, cybercafes and the operation of public payphones. (the Minister) under the NCA is vested with the responsibilities of the formulation, determination and monitoring of the general policy for the In terms of issuing a licence by an administrative procedure, an entity communications sector in Nigeria to ensure, among other things: intending to carry out a service subject to an individual licence shall • the utilisation of the sector as a platform for the economic and apply to the NCC in the prescribed form upon the payment of the social development of Nigeria; processing or administrative fee (usually 5 per cent of the licence fee) • the negotiation and execution of international communications and the licence fee, while a person intending to operate under a class treaties and agreements, on behalf of Nigeria, between sovereign licence is to submit a registration notice in the prescribed form and a countries and international organisations and bodies; and registration fee of 10,000 naira to the NCC. Under the NCA, a licence • the representation of Nigeria, in conjunction with the NCC, at applicant must receive a response to the application within 90 days of proceedings of international organisations and on matters relating submitting it. However, an offer letter is normally issued to applicants to communications. for a class licence if the application is complete. For individual licences, depending on the service and completeness of the required informa- Under the NCA, the NCC is authorised to make and publish regulations tion, the conclusion of the process can take between four to 12 weeks. and guidelines insofar as it is necessary to give effect to the full provi- The duration of a licence depends on the type of service authorised or sions of the NCA, among other reasons. The WTA sets out the framework spectrum licensed. for regulating the use of wireless telegraphy in Nigeria. Foreign owner- The national carrier licence and international gateway licence are ship restriction does not apply to the provision of communications valid for 20 years. The unified access service licence is valid for a term services in Nigeria as a company with foreign ownership, as long as of 15 years, while a digital mobile licence (DML) authorising the use it is incorporated in Nigeria, is eligible to apply for a licence to provide of a specified mobile spectrum is valid for a term of 15 years. On the communications services. Under the Nigerian Investment Promotion other hand, an internet service, paging, prepaid calling card and special Commission Act, a foreign national can own up to 100 per cent of a numbering services licence are all valid for a term of five years. The business or can invest in any business except those on the negative licence fees payable depends on the type of service. Fees payable are list. None of the communications service authorised in Nigeria is on the fixed by the NCC and published on its website. In addition to licence negative list. fees, a prospective licensee is required to pay an administrative charge and, upon grant of the licence, a licensee shall pay an annual operating Authorisation/licensing regime levy calculated based on net revenue for network operators and gross 2 Describe the authorisation or licensing regime. revenue for non-network operators. Fixed, mobile and satellite services are regulated and licensed Under the NCA, there are two broad licensing frameworks: under the NCA and to operate any of these services a licence must be • an individual licence, which is a type of authorisation in which obtained from the NCC. As these services are operator-specific, they the terms, conditions and obligations, scope and limitations are fall under the individual licence category. In Nigeria, mobile telecom- specific to the service being provided. The NCC may issue an indi- munications services are differentiated based on whether the operator vidual licence by auction, first-come, first-served, beauty contest is authorised by a DML, fixed wireless access licence (FWAL) or unified or through a standard administrative procedure. Presently, there access service licence. A DML authorises an operator to use appropriate are 26 licence types in the individual licence category. Some of equipment in a designated part of the electromagnetic spectrum and the activities authorised by an individual licence include internet permits it to operate a network for the provision of public telecommu- services, fixed wireless access, unified access services, electronic nications services. In 2001, the NCC licensed four spectrum packages www.lexology.com/gtdt 93 © Law Business Research 2021 Nigeria Streamsowers & Köhn

in the 900MHz and 1,800MHz bands to Mobile Telecommunications VSAT services, whether one-way or two-way, point to point or Limited (now ntel), Econet Wireless Nigeria Limited (now Airtel) and point to multipoint, including voice, data, vision or any other kind MTN Nigeria Communications Limited for use in the provision of digital of message for reception within Nigeria or any overseas country; mobile services. These were later joined by Etisalat and Globacom. A • operate VSAT services using space segment provided by any satel- FWAL authorises an operator to use appropriate equipment in a desig- lite organisation approved by NCC; and nated part of the electromagnetic spectrum for a term of five years (with • provide a hub or gateway within Nigeria and shall provide hub renewal for a further five years) and permits it to operate a network for satellite service to other licensed VSAT operators. the provision of public telecommunications service. FWALs are granted on a regional basis to reflect the 36 Nigerian states and the federal Public Wi-Fi services are authorised under the Regulatory Guidelines capital territory, with operators wishing to achieve national coverage for the Use of 2.GHz ISM Band for Commercial Telecoms Services. required to obtain licences in each of the licensing regions. In 2002, the Under these Guidelines, Wi-Fi hotspots shall, inter alia, be deployed in NCC in authorising FWAL services also offered 42MHz paired in the the 2GHz ISM band and must be registered and authorised by the NCC. 3.5GHz band, and a total of 28MHz paired in the 3.5GHz band across the Also, commercial Wi-Fi hotspot operators must hold a licence for the 37 licensing regions of Nigeria to 22 new licensees. provision of internet services. In 2007, the NCC introduced the unified access service licence (UASL) scheme and allocated 40MHz of paired spectrum in the 2GHz Flexibility in spectrum use band in four equal blocks of 10MHz paired spectrum. On successful 3 Do spectrum licences generally specify the permitted use allocation of the spectrum, the allottees were issued with a spectrum or is permitted use (fully or partly) unrestricted? Is licensed licence and where necessary, a UASL. The UASL authorises the holder spectrum tradable or assignable? to provide both fixed and mobile services including voice and data, and imposes special conditions requiring its holders to build and operate a Yes, in line with the Frequency Management Policy, an applicant for a telecommunications network to provide voice telephony, video services, commercial frequency licence from the NCC must also hold a commer- multimedia services, web browsing, real-time video streaming, video cial operating licence from the NCC (or must have submitted an surveillance, network gaming, email, SMS, file transfer, broadband data application for an operating licence to the NCC). The commercial oper- and location-based services, and other services that may be author- ating licence authorises the provision of a specific service for which the ised, and that the 3G network be built and operated according to certain spectrum is intended to be used. An applicant for a frequency licence defined technical standards. may also be given a frequency reservation pending the outcome of For broadband internet services, a wholesale wireless access the processing of his or her commercial operating licence. However, service licence (WWASL) authorises the holder to construct, main- the frequency licence will be subject to the successful approval of the tain, operate and use a network consisting of a mobile communication commercial licence. system, a fixed wireless access telecommunications system, or a Under the provision of Spectrum Trading Guidelines issued by the combination of any of these systems comprising radio or satellite or NCC, radio frequency spectrum is tradable, provided such transactions their combination, within Nigeria, deployed for providing point-to-point comply with the eligibility criteria set out in the Guidelines or switched or unswitched point-to-multipoint communications for the conveyance of voice, data, video or any kind of message. The WWASL Ex-ante regulatory obligations also authorises the holder to construct, own, operate and maintain an 4 Which communications markets and segments are subject to international gateway, while an infrastructure company licence author- ex-ante regulation? What remedies may be imposed? ises the holder to provide and operate on a wholesale basis an open access metropolitan fibre network within a designated geographical Historically, NCC has subjected several communications market to area in Nigeria in particular, among other things, to construct, maintain ex-ante regulation. For instance, in 2013, the NCC undertook a detailed and operate fibre optic network facilities. study of the level of competition in the Nigerian communications market Commercial satellite services including the operation of space and identified the following communications for ex-ante regulation. segments and earth stations, satellite gateway services, the sales and installation of satellite terminal equipment and the operation of Market segment Sub-segment Voice private network links employing satellite (VSAT) in Nigeria are normally • Mobile telephony (including messaging); and authorised by either global mobile personal communication by satel- • fixed-line telephony. lite (GMPCS) licence or a domestic VSAT network licence. In addition to the general conditions applicable to fixed, mobile and satellite services, Data a GMPCS licence imposes special conditions requiring the holder to, • Fixed data, retail data transmission services and leased lines; and among other things: • mobile data (eg, dongles, data cards, tablets, internet through • construct, operate, implement and maintain a GMPCS land earth mobile phone connections, eg, 3G, GPRS and Edge). station for the purposes of establishing, maintaining, validating and controlling command functions and communication with the space Upstream segments segment of a GMPCS system; • Spectrum; • deploy a GMPCS network for the purpose of providing one-way or • tower sites; two point-to-point or point-to-multipoint communications for the • network equipment; conveyance of voice data or video; • wholesale broadband or internet access; and • sell telecommunications components and accessories used or • wholesale leased lines and transmission capacity. intended for use in the installation of GMPCS terminals; • install GMPCS terminals; Downstream segments • provide activation, billing, maintenance and related management • Handsets or devices (includes the device operating system); and services for subscribers to GMPCS services, while a domestic • applications/content (includes m-commerce). VSAT network licence authorises the holder to provide and operate

94 Telecoms & Media 2021 © Law Business Research 2021 Streamsowers & Köhn Nigeria

The identified markets were further divided into wholesale and retail the same interconnection facilities and information to other opera- sub-segment as follows: tors under the same conditions and quality as it provides for itself • upstream segment; and affiliates and partners; • voice segment; • make available on request to other licensed telecommunication oper- • data segment; ators considering interconnection with its network, information and • downstream segment; specifications necessary to facilitate the conclusion of an agreement • services provided as wholesale by an operator to other operators; for interconnection including changes planned for implementation • wholesale broadband access; within the next six months, unless agreed otherwise by the NCC; • wholesale voice termination on voice network; • submit to the NCC for approval and publish a reference intercon- • services provided as wholesale by an operator to other operators; nection offer, describing interconnection offerings, broken down • wholesale leased lines and transmission capacity; according to market need and associated terms and conditions • wholesale voice termination on fixed network; including tariffs; and • service provided as retail by each individual operator to its • provide access to the technical standards and specifications of its consumers; telecommunications network with which another operator shall be • retail voice access on mobile networks; interconnected. • retail broadband or internet access on mobile devices; • supply of applications, content and devices; Also, the dominant licensee shall, except where the NCC has determined • service provided as retail by each individual operator to its interconnection rates, set charges for interconnection on objective consumers; criteria and observe the principles of transparency and cost orientation. • retail access on fixed networks; The burden of proof that charges are derived from actual costs lies with • retail broadband or internet access on mobile devices at a the licensed telecommunications operator providing the interconnection fixed location; service to its facilities. The dominant licensee may set different tariffs, • service provided as retail by each individual operator to its terms and conditions for interconnection of different categories of tele- consumers; and communications services where such differences can be objectively • retail leased lines. justified based on the type of interconnection provided. A dominant licensee shall also: In this study, the NCC determined that MTN, along with Globacom, • give written notice of any proposal to change any charges for inter- collectively held significant market power for the mobile voice and connection services under the procedure set out in the guidelines upstream segment respectively. As a result, the NCC (in exercising its on interconnection adopted by the NCC and the provisions of the power to remedy market failure or prevent anticompetitive practices operating licence; under the Competition Practice Regulations) imposed on MTN as the • offer sufficiently unbundled interconnection charges, so that the operator with significant market power in the mobile voice market, the licensed telecommunications operator requesting the interconnec- following obligations: tion is not required to pay for any item not strictly related to the • accounting separation; service requested; • the collapse of on-net and off-net retail tariff; • maintain a cost accounting system which, in the opinion of the NCC, • submission of required details to the NCC; and is suitable to demonstrate that its interconnection charges have • a determination of the pricing principle to address the rates been fairly and properly calculated, and provides any information charged for on-net and off-net calls for all operators in the mobile requested by the NCC; and voice market. • make available to any person with a legitimate interest on request, a description of its cost accounting system showing the main In respect of the joint dominance collectively held by Globacom and categories under which costs are grouped and the rules for the MTN in the market for the upstream segment, the NCC imposed the allocation of interconnection costs. following obligations on both operators: • a price cap for wholesale services and a price floor for retail The NCC, or any other competent body independent of the dominant services as to be determined by the NCC periodically; telecommunications operator and approved by the NCC, shall verify • accounting separation; and compliance of the dominant telecommunications operator with the cost • submission of required details to the NCC. accounting system and the statement concerning compliance shall be published by the NCC annually. Last, if interconnection services are not In October 2014, the NCC reviewed its direction requiring MTN to collapse provided through a structurally separated subsidiary, the dominant its on-net and off-net retail tariff, by approving a stipulated differential licensee shall: for MTN’s on-net and off-net call charges. Also, under Regulations 10 • keep separate accounts as if the telecommunications activities in to 12 of the Telecommunications Networks Interconnection Regulations question were carried out by legally independent companies; 2007 (the Interconnection Regulations) issued by the NCC, one or more • to identify all elements of cost and revenue with the basis of their communications market relating to interconnection in which a licensee calculation and the detailed attribution methods used; has been declared dominant by the NCC would trigger the application • maintain separate accounts in respect of interconnection services of ex-ante regulatory obligations. In this regard, the dominant licensee and its core telecommunications services and the accounts shall would be obligated to: be submitted for independent audit and thereafter published; and • meet all reasonable requests for access to its telecommunications • supply financial information to the NCC promptly on request and to network, in particular, access at any technically feasible points; the level of detail required by the NCC. • adhere to the principle of non-discrimination concerning interconnection offered to other licensed telecommunications operators, It is also pertinent to note that in 2020, the NCC decided to impose manda- applying similar conditions in similar circumstances to all intercon- tory accounting separation obligation on Airtel, EMTS, Globalcom, MTN, nected licensed operators providing similar services and providing Mainone Cable and IHS (four mobile network operators, a submarine www.lexology.com/gtdt 95 © Law Business Research 2021 Nigeria Streamsowers & Köhn

cable operator and a collocation and infrastructure sharing provider the NCA. Under the Numbering Regulations, the holder of a communica- respectively). Although this determination did not identify (or define) tions licence may apply in the prescribed form to the NCC to be assigned any particular communications market, however, one of the key objec- numbers (in a set of blocks) by stating: tives of the NCC in imposing the accounting separation is to identify and • the name and contact details of the applicant; prevent any undue discrimination or practices that substantially lessens • the licence under which the application is made; competition such as cross-subsidisation and margin squeezes, etc. This • the services intended to use the assignment; determination took effect from 15 July 2020 and the licensees subject • the geographic areas for completing calls or transmitting messages to the determination were to commence the full rollout of accounting to the numbers to be included in the assignment; separation by 1 January 2021. Also, licensees with an annual turnover • the amount of numbers requested for inclusion in the assignment; in excess of 5 billion naira are subject to an accounting separation obli- • any particular blocks requested for inclusion in the assignment; gation under the Guidelines on the Implementation of an Accounting • the utilisation of the assignment predicted for 12 months after the Separation Framework issued by the NCC. grant of the assignment; • the current utilisations of existing assignments to the applicant for Structural or functional separation the intended services; 5 Is there a legal basis for requiring structural or functional • an indication of which, if any, portions of the application are confi- separation between an operator’s network and service dential to the NCC; activities? Has structural or functional separation been • any other information that the applicant considers necessary or introduced or is it being contemplated? appropriate to justify the application; and • any other information that the NCC may, from time to time, require Under the Federal Competition and Consumer Protection Act 2018 (the to assess the application. Competition Act), the Competition Tribunal is empowered upon receipt of a monopoly report from the Competition Commission to order the In deciding on an application for an assignment, the NCC shall take into division of any undertaking by the sale of any part of its shares, assets account factors including but not limited to: or otherwise, if the monopoly cannot be adequately remedied under • any earlier decisions about assignments to the applicant or other any other provision of the Competition Act or is substantially a repeat licensees for service similar to the intended services; by that undertaking of conduct previously found by the Competition • any statements in the licence of the applicant about eligibility for Tribunal to be a prohibited practice. Also, under the provisions of the providing services or being assigned numbers; Competition Practice Regulations, the NCC, in issuing a direction to • the usage conditions; remedy an abuse of a dominant position or an anticompetitive practice, • the digit analysis capabilities of communications networks that are may direct a licensee to make changes in actions or activities including operated in Nigeria; structural separation of services or businesses, as a means of elimi- • the utilisation of the assignment predicted for 12 months after the nating or reducing the abusive or anticompetitive practice. grant of the assignment over the next three years; • the current utilisations of existing assignments to the applicant for Universal service obligations and financing the intended services; and 6 Outline any universal service obligations. How is provision of • the quantity and fragmentation of blocks that have not been these services financed? assigned; and whether or not the licensee has failed to fulfil an obligation in the Numbering Regulations or the National Numbering The Universal Service Provision (USP) Fund established by the NCA Plan, or any other numbering related obligation under the Act, has is geared towards promoting the widespread availability of network committed a contravention of its regulatory obligation. services and applications services by encouraging the installation of network facilities and the provision of network services, application The Nigerian Mobile Number Portability Business Rules and Port Order services and broadband penetration in unserved, underserved areas or Processes (the MNP Business Rules) sets out the regulatory, legal and for underserved groups within the community. technical framework for implementing MNP in Nigeria. The NCC has The USP Fund is financed from: also issued the Mobile Number Portability Regulations 2014 to provide • monies appropriated to the USP Fund by the National Assembly; a regulatory framework for the operation of MNP in Nigeria. Under • contributions from the NCC based on a portion of the annual levies the terms of the MNP Business Rules, MNP is obligatory for all mobile paid by licensees; and network operators (MNOs) and is currently available across only Global • gifts, loans, aids and such other assets that may from time to time Systems for Mobile (GSM) networks (although number portability is specifically accrue to the USP Fund. intended to be implemented in phases that will cover Code Division Multiple Access (CDMA), fixed networks and location). In practice, the USP secretariat created by the NCC is responsible for Under the MNP Business Rules, the MNP is recipient led. To implementing and executing USP programmes and USP projects. The initiate a porting request, the recipient operator would receive a porting USP board supervises and provides broad policy directions for the request from a subscriber to port their number. The recipient operator, management of the USP Fund. number portability clearinghouse and donor operator then exchange messages to validate the porting request. Porting is free and is normally Number allocation and portability completed within 48 hours. 7 Describe the number allocation scheme and number A port request, however, can be rejected for several reasons portability regime in your jurisdiction. including where the number is not included in the Nigerian numbering plan, where the number was ported within the last 90 days, where the The Numbering Regulations 2008 (the Numbering Regulations) regulate number is not registered in the subscriber information database and the allocation (or assignment) of numbers. The Numbering Regulations where the number is already subject to a pending port request. provide a regulatory framework for the control, planning, administration, management and assignment of numbers, under section 128(1) of

96 Telecoms & Media 2021 © Law Business Research 2021 Streamsowers & Köhn Nigeria

Customer terms and conditions Also, the Guidelines for the provision of internet service, the licence for 8 Are customer terms and conditions in the communications the provision of internet service, the UASL and the WWASL do, however, sector subject to specific rules? impose some non-discriminatory obligations on an IASP and holders of these licences. In this regard, an IASP and the respective licensees Yes, the NCA requires each licensee to prepare a consumer code for are required not to show (whether in respect of charges or other terms their respective customers and such consumer code shall be subject or conditions applied or otherwise) undue preference to or to exercise to prior approval and ratification by the NCC. The individual consumer undue discrimination against any particular person in respect of the code governs the provision of services and related consumer practices provision of a service or the connection of any equipment approved applicable to the licensee. Where the NCC designates an industry body by the NCC. to be a consumer forum, any consumer code prepared by such industry body shall be subject to prior approval and ratification by the NCC. A Platform regulation consumer code prepared by a consumer forum, the NCC or licensees 10 Is there specific legislation or regulation in place, and have shall as a minimum contain model procedures for: there been any enforcement initiatives relating to digital • reasonably meeting consumer requirements; platforms? • the handling of customer complaints and disputes including an inexpensive arbitration process other than a court; Except for the Framework and Guidelines for the Use of Social Media • procedures for the compensation of customers in case of a breach Platforms in Public Institutions, which guides the use of social media of a consumer code; and within a public institution’s communications’ environment issued by • the protection of consumer information. the National Information Technology Development Agency (NITDA) in January 2019, there is no specific legislation or regulation in respect of The Consumer Code of Practice Regulation (the Consumer Code digital platforms. However, the NCC, in its Strategic Management Plan Regulations) also requires that the individual consumer code after its for 2020 – 2024 (SMP 2020 – 2024), has indicated an intention to develop approval by the NCC be published in at least two national newspapers a framework for regulating over-the-top (OTT) services and platforms. (or as the NCC may direct), and the approved individual consumer code shall become applicable from the date of its publication. Next-Generation-Access (NGA) networks The provisions of the Competition Act, the NCA and the Competition 11 Are there specific regulatory obligations applicable to Practice Regulations may limit the application of certain customer NGA networks? Is there a government financial scheme to terms and conditions deemed to be undermining of consumer rights or promote basic broadband or NGA broadband penetration? anticompetitive in the communications sector. Also, the Regulations on Enforcement Processes require every licensee to submit the contents Yes, in addition to the application of regulatory obligations ordinarily and representations contained in any promotions of products or services applicable to other categories of communications licensees, the holder to the NCC for its prior approval. Failure to obtain the required approval of the WWASL will be required by the licence to, among other obliga- shall constitute a contravention under these Regulations. tions, roll out services at least as follows: • three state capitals in year one; Net neutrality • four additional state capitals in year two; 9 Are there limits on an internet service provider’s freedom to • six additional state capitals in year three; control or prioritise the type or source of data that it delivers? • 12 additional state capitals in year four; Are there any other specific regulations or guidelines on net • 12 additional state capitals in year five; and neutrality? • two-thirds of all local government headquarters in the remaining licence period. The Internet Industry Code of Practice (the Internet Code) issued by the NCC on 26 November 2019 sets out the obligation of an internet access Also, a WWASL requires the holder to supply customer premises equip- service provider (IASP) regarding the control or prioritisation of the data ment adapted in such a way as to reasonably accommodate the needs that it delivers and other obligations regarding net neutrality. In this of hearing-impaired individuals. regard, the Internet Code inter alia: Notwithstanding the application of the USP fund for the facilita- prescribes measures that seek to guarantee the rights of internet tion of broadband penetration in Nigeria, there are other NCC-initiated users to an open internet; projects such as the Wire Nigeria project aimed at facilitating the rollout imposes specific transparency obligation on IASPs with respect of fibre optic cable infrastructure in which subsidies are based on per to performance, technical and commercial terms of its internet access kilometre of fibre and incentives to encourage the rapid deployment of service in a manner that is sufficient for consumers and third parties to non-commercially viable routes are provided. The State Accelerated make informed choices regarding their uses of such services; Broadband Initiative is aimed at stimulating the demand for internet • imposes a positive obligation on IASPs when providing internet services and driving affordable home broadband prices where subsidies access service, to treat all traffic equally, without discrimination, on terminal equipment based on broadband infrastructure deployed in restriction or interference, independently of its sender or receiver, state capitals and urban and semi-urban centres are provided to opera- content, application or service, or terminal equipment;; tors. Also, under the ongoing Open Access Model for Next Generation • bars IASPs from blocking lawful content on the internet, unless Fibre Optic Broadband Network (Open Access Model), there shall be under condition of reasonable network management; a one-off government financial support to facilitate the rollout of the • bars IASPs from degrading or impairing lawful internet traffic infrastructure companies. This 65 billion naira financial support will be unless under condition of reasonable network management; based on meeting pre-identified targets at certain points in time during • bars IASPs from engaging in paid-prioritisation; the rollout of the broadband infrastructure phase. • prescribes the circumstance in which zero-rating is permissible; and • sets out circumstances that warrant the use of reasonable network management practices. www.lexology.com/gtdt 97 © Law Business Research 2021 Nigeria Streamsowers & Köhn

Data protection • intrusion detection and protection; 12 Is there a specific data protection regime applicable to the • protection of object identifiable information; communications sector? • securing public web servers; • system firewalls; and Part VI of the General Code (in appendix I of the Consumer Code • cyber forensic, and further recommended best practice guidance Regulations) sets out the responsibilities of a licensee in the protection for public and private sector organisations for instituting measures of individual consumer information. These responsibilities stipulate that for enshrining cybersecurity culture and enthronement of cyber- a licensee may collect and maintain information on individual consumers resiliency in Nigeria. reasonably required for its business purposes and that the collection and maintenance of such information on individual consumers shall be: Big data • fairly and lawfully collected and processed; 14 Is there specific legislation or regulation in place, and have • processed for limited and identified purposes; there been any enforcement initiatives in your jurisdiction, • relevant and not excessive; addressing the legal challenges raised by big data? • accurate; • not kept longer than necessary; There is no specific legislation on big data. However, the Cybercrime • processed under the consumer’s other rights; Act has as one of its objectives the promotion of cybersecurity and the • protected against improper or accidental disclosure; and protection of computer systems and networks, electronic communica- • not transferred to any party except as permitted by any terms and tions, data and computer programs, intellectual property and privacy conditions agreed with the consumer, as permitted by any permis- rights. The Cybercrime Act uses the term ‘data’, which it defines as sion or approval of the NCC, or as otherwise permitted or required ‘representations of information or of concepts that are being prepared by other applicable laws or regulations. or have been prepared in a form suitable for use in a computer’. The Cybercrime Act imposes several obligations relating to the retention Licensees are required by the Consumer Code Regulations to adopt and confidentiality of data on any public or private entity that provides similar provisions guaranteeing the same level of protection (or higher) to users of its services the ability to communicate through a computer in the production of their own individual consumer codes. system, electronic communication devices, mobile networks and entities Also, licensees are required by these responsibilities to meet that process or store computer data on behalf of such communication generally accepted fair information principles including: service or users of such service. We are unaware of any enforcement • providing notice as to what individual consumer information they initiatives in this regard, that have occurred since the enactment of the collect, and its use or disclosure; Cybercrime Act. • the choices consumers have concerning the collection, use and disclosure of that information; Data localisation • the access consumers have to that information, including to ensure 15 Are there any laws or regulations that require data to be its accuracy; stored locally in the jurisdiction? • the security measures taken to protect the information; and • the enforcement and redress mechanisms that are in place to Yes. The Guidelines on Nigerian Content in information and communi- remedy any failure to observe these measures. cations technology (ICT) issued by the NITDA require ICT companies and data and information management firms in Nigeria to host, respec- Also, the NITDA Data Protection Regulations 2019, enacted by the tively, all subscriber and consumer data and government data locally NITDA, specify the conditions in which personal data may be processed. within the country and further provides that they shall not, for any The NITDA Data Protection Regulations set out the lawful basis for reason, host any government data outside the country without express processing personal data, the rights of the data subject, obligations of approval from NITDA and the Secretary to the government of the data controllers and conditions under which the cross-border transfer Federation. of personal data is permissible. NITDA Data Protection Regulations apply to all sectors of Nigeria’s economy, including the communica- Key trends and expected changes tions sector. 16 Summarise the key emerging trends and hot topics in communications regulation in your jurisdiction. Cybersecurity 13 Is there specific legislation or regulation in place concerning Some of the ongoing issues and key changes that have occurred in the cybersecurity or network security in your jurisdiction? past year include: • The Federal Government of Nigeria and the World Bank have Yes. The Cybercrime Act 2015 (the Cybercrime Act) provides a unified entered into an agreement in which the World Bank will extend and comprehensive legal framework for the prohibition, prevention, some credit facilities to Nigeria to support the Nigeria Digital detection, prosecution and punishment of cybercrimes in Nigeria. The Identification for Development Project. This project seeks to reform Cybercrime Act also ensures the protection of critical national infor- the identity ecosystem in Nigeria by among other things increasing mation infrastructure and promotes cybersecurity and the protection the number of persons with a national identification (ID) number, of computer systems and networks, electronic communications, data issued by a robust and inclusive foundational ID system, that and computer programs, intellectual property and privacy rights. Also, facilitates their access to services. One of the safeguards for the the National Information Systems and Network Security Standards and successful implementation of this project is for Nigeria to enact Guidelines 2013 and the Nigerian Cybersecurity Framework 2019 issued comprehensive data protection legislation. To this end, a draft of by NITDA prescribe mandatory minimum standards on seven primary the Data Protection Bill sponsored by the Minister has been put areas of network security and cyber forensic, namely: out for public consultation, after which a final version of the draft • categorisation of information; is to be formally presented as an executive Bill, to the National • minimum security requirements; Assembly for their consideration.

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• In the last quarter of 2020, the NCC constituted a committee to • review the Spectrum Trading Guidelines; review the framework for the licensing of Infrastructure Companies • review and roll out minimum financial health requirements for (InfraCo) and to recommend sustainable funding options for the licensed operators; effective implementation of the proposed national fibre project. • facilitate the passage of critical national infrastructure bill; The constitution of the committee is under the requirements of the • expedite the rollout of infrastructure companies; and National Broadband Plan issued in the first quarter of 2020, and • the revision and expansion of licensing category. reports of relevant committees set up by the Federal Executive Council (FEC), which includes the Inter-Ministerial Review MEDIA Committee on Multiple Taxation on Telecommunications Operators over Right-of-Way (RoW) and the Technical Sub-Committee on Regulatory and institutional structure Right-of-Way for Deepening Broadband Penetration in Nigeria. To 17 Summarise the regulatory framework for the media sector in date, the committee has met with all the six licensed InfraCos in your jurisdiction. Nigeria and is considering the challenges facing the InfraCo project, the need for accelerated deployment of fibre infrastructure, means The National Broadcasting Commission Act (the NBC Act) regulates the of mitigating the exorbitant RoW charges, among others. broadcasting sector in Nigeria. The NBC Act also established the NBC, • The Minister, under the requirement of the National Broadband which is responsible for regulating the broadcasting industry. There is Plan, has constituted the Broadband Implementation Steering also the Broadcasting Code (BC), which was made by the NBC under the Committee. The Broadband Implementation Steering Committee is NBC Act. The BC represents the minimum standard for broadcasting charged with the overall responsibility for ensuring the implemen- in Nigeria. tation of the National Broadband Plan. • Recognising the benefits of 5G in Nigeria, the NCC issued a consul- Ownership restrictions tation document on the deployment of 5G technology in Nigeria. 18 Do any foreign ownership restrictions apply to media Accordingly, the document outlines the strategy that will enable services? Is the ownership or control of broadcasters the deployment of 5G Technology in such a manner that will be otherwise restricted? Are there any regulations in relation most beneficial to Nigeria and end users. to the cross-ownership of media companies, including radio, • The NCC decided to impose accounting separation on four MNOs, television and newspapers? a submarine cable operator and a collocation and infrastructure sharing provider, and thereafter determined that licensees with Yes, the ownership of broadcasting networks is restricted. The NBC Act an annual turnover in excess of 5 Billion naira are also subject to requires the NBC to satisfy itself when granting a broadcasting licence an accounting separation obligation under the Guidelines on the that the applicant can demonstrate to the satisfaction of the NBC that Implementation of an Accounting Separation Framework issued he or she is not applying on behalf of any foreign interest. The NBC is by the NCC. also prohibited from granting a licence to either a religious organisation • The NCC is considering the implementation of full national roaming or a political party. Foreign investors can therefore participate in broad- in Nigeria and has issued the following draft regulatory guidelines casting activities, provided that the majority of shares in a broadcasting for public consultation: company are held by Nigerians. • the Guidelines on National Roaming; In terms of cross-ownership in the broadcasting industry, the NBC • the Amended Guidelines on Collocation and Infrastructure Act provides that a person is prohibited from having ‘controlling shares Sharing and AIS Business Rules; and in more than two of each of the broadcast sectors of transmission’. Apart • the Mobile Virtual Network Operator (MVNO) Licence from the provisions in the NBC Act, there are no regulations regarding Framework. As at the time of this writing, this process is yet cross-ownership of media companies. to be concluded. • The NCC has released its SMP 2020 – 2024, which comprises Licensing requirements five pillars: 19 What are the licensing requirements for broadcasting, • Regulatory Excellence, in which the NCC aims to develop including the fees payable and the timescale for the adaptive and sustainable regulation to ensure efficient regu- necessary authorisations? latory service to all stakeholders; • Universal Broadband Access, in which NCC aims to achieve To operate a radio, sound, television, cable or satellite station in Nigeria, pervasive and inclusive broadband access by providing incen- an application in the prescribed form is addressed to the Director- tives for broadband deployment in Nigeria; General (DG) of the NBC requesting approval to purchase a set of • Promote Development of Digital Economy, in which NCC application forms indicating the licence category and proposed location. will provide the necessary regulations and initiatives for If granted, the applicant must purchase the application form (50,000 the achievement of the Digital Economy policy thrust of the nairas), complete and submit it to the DG. The form is accompanied by Government; a certificate of incorporation, a certified copy of the company’s memo- • Market Development, in which the NCC, through its policies randum and articles of association, an engineering design of systems and directions, will ensure a dynamic market that drives inno- including feasibility study, a letter of undertaking to abide by the terms vation necessary for economic growth; and of the licence and a letter of reference from the company’s bankers. • Strategic Partnering, in which the NCC aims at mutually Section 9(1) of the NBC Act sets out the criteria used by the NBC in the sustainable collaboration with relevant stakeholders. grant of a broadcast licence and these require the applicant to be a corporate body registered in Nigeria or a broadcasting station owned, Among the initiatives sought to be undertaken by the NCC under the established or operated by the federal, state or local government. The SMP 2020 – 2024 are to: NBC is also required to satisfy itself that the applicant is not applying on • develop a framework for regulating OTT services; behalf of any foreign interest. If the NBC is satisfied with the application, • determine the rollout incentives for broadband infrastructure; it will make a recommendation through the Minister of Information to www.lexology.com/gtdt 99 © Law Business Research 2021 Nigeria Streamsowers & Köhn

the President for the grant of a licence. The licence fee for an initial term categories of programming including but not limited to fiction, series, of five years is as follows: serials, films, documentaries, arts and educational programmes, news, • Type Fee, Category A (Any location in the Federal Capital Territory, sports events, games, advertising, teleshopping or teletext services. Last, Lagos and Rivers States): a broadcaster is required by the local content rules in the Addendum to • Radio, 20 million nairas; source its local content from independent producers where it is not a • Open TV, 15 million nairas; or direct production of the broadcaster. Failure to comply with the local • Cable TV 10 million nairas; and content rules is a Class B breach under the BC and will attract sanctions. • Type Fee, Category B (Any location in all other states): • Radio, 15 million nairas; Advertising • Open TV, 11.25 million nairas; 21 How is broadcast media advertising regulated? Is online • Cable TV, 7.5 million nairas; advertising subject to the same regulation? • Public Stations, 5 million nairas for 5 years or 1 million nairas per television or radio channel per annum for 5 years Broadcast media advertising is regulated by the NBC Act, the BC, the • Direct broadcast satellite (single channel), 10 million nairas; Advertising Practitioners Council of Nigeria Act (the APCON Act), the • Direct-to-home (multi-channel), 25 million nairas; Nigerian Code of Advertising Practice and Sales Promotion and the • Dealer (wholesale), 120 million nairas per annum; APCON Vetting Guidelines (the Vetting Guidelines). Under the Vetting • Importer (wholesaler), 120 million nairas per annum; and Guidelines, any broadcast media advertising material must be submitted • Retailer, 30 million nairas per annum. for approval by the Advertising Standards Panel before it is aired. Online broadcasting is subject to the BC to the extent that it is transmitted by an There is no specific timescale for the grant of a licence. online or web broadcaster operating in Nigeria, and it shall additionally conform to the provisions of the BC on programming standards. Foreign programmes and local content requirements 20 Are there any regulations concerning the broadcasting Must-carry obligations of foreign-produced programmes? Do the rules require a 22 Are there regulations specifying a basic package of minimum amount of local content? What types of media fall programmes that must be carried by operators’ broadcasting outside this regime? distribution networks? Is there a mechanism for financing the costs of such obligations? The NBC Act and the BC regulate the broadcasting of programmes and the minimum local and foreign programme content. Under the BC, Beyond the local content obligations mandated by the BC, there are no foreign content is permissible provided it conveys intrinsic relevance to other obligations that specify the basic package of programmes, and/or the education, information and entertainment of the Nigerian citizenry. concerning must-carry. At present. there is no mechanism for financing The BC stipulates that a broadcaster shall ensure that the selection of local content obligations in Nigeria. However, there is a local content foreign programmes reflects the development needs of the Nigerian development fund into which a subscription broadcaster shall make a nation and ensure respect for Nigerian cultural sensibilities. Also, except mandatory payment, where it fails to comply with its local content obli- for special religious and sports programmes or events of national impor- gations regarding its subscription service. tance, Nigerian broadcasters shall not relay foreign broadcasts live on terrestrial platforms. In terms of characterising how a broadcasting Regulation of new media content programme may qualify as local content, the Addendum to the 6th Edition 23 Is new media content and its delivery regulated differently of the BC (the Addendum) issued by the NBC in 2020 provides that: from traditional broadcast media? How? • the producer of the programme must be Nigerian, residing in Nigeria; Internet radio and broadcasting streaming signals from and into Nigeria • the directors of the programme are Nigerian; or requires a licence from the NBC. In practice, most of the internet radio • the authors of the programme are Nigerian. stations operating in Nigeria already have a radio (or another broadcast) licence issued by the NBC. The BC also requires the local content for Also: this category of licence to be 60 per cent. The regulations and conditions • 75 per cent of the leading authors and major supporting cast, governing news, programmes, advertising and sponsorship concerning including voice actors or on-screen presenters appearing in the other forms of broadcasting or broadcast licence are also applicable to programme, must be Nigerian; internet broadcasting. • a minimum of 75 per cent of programme expenses and 75 per cent of post-production expenses are paid-for-services provided Digital switchover by Nigerians or Nigerian companies, which may be obtained from 24 When is the switchover from analogue to digital broadcasting programme commission, licensing, advertising-funded program- required or when did it occur? How will radio frequencies ming grants, co-funding arrangements, commercial sponsorship freed up by the switchover be reallocated? and financing initiatives, all of which must not be subject to ‘foreign ownership or arbitrary interference’; and The first phase of the Digital Switch Over (DSO) was successfully launched • where the production is a collaboration with a foreign entity, the in five states and the Federal Capital Territory in Nigeria between April producer shall ensure that Nigeria production locations, talents, 2016 and February 2018. According to the timeline released by the NBC skills, sets, etc, constitute at least 75 per cent of the entire in March 2021, the second phase of the DSO will commence in Lagos production. State on 29 April 2021 and be extended to four other states by 12 August 2021. The third and final phase of the DSO will commence in December The Broadcaster is required by the BC to ensure that all productions 2021 and is expected to be concluded by 8 December 2022. targeted at the Nigerian market must meet a minimum of 60 per cent The NCC is proposing that the radio frequencies freed up should be local content requirement. The local content requirement applies to all reallocated to mobile broadband.

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Digital formats and is a separate institution from the NCC and NBC. The Competition 25 Does regulation restrict how broadcasters can use their Commission is charged with the administration and enforcement of the spectrum? provisions of the Competition Act including the approval of mergers and the protection and promotion of consumer interests. Yes. Broadcasters are required to use the spectrum assigned to However, although the Competition Act establishes a concurrent them under the technical specifications and conditions specified in jurisdiction between the Competition Commission and both the NCC their licence. and the NBC in matters of competition enforcement, the Competition Commission has precedence over both the NCC and the NBC and, Media plurality according to the provision of the Competition Act, all appeals or 26 Is there any process for assessing or regulating media request for review of the exercise of the competition power of the NCC plurality (or a similar concept) in your jurisdiction? May the and the NBC shall in the first instance be heard and determined by authorities require companies to take any steps as a result of the Competition Commission before such appeals can proceed to the such an assessment? Competition Tribunal established under the Competition Act.

The BC incorporate some provisions that are consistent with media Appeal procedure pluralism. Some of these provisions include that the BC requires 29 How can decisions of the regulators be challenged and on broadcasters to ensure that all sides to any issue of public interest are what bases? equitably presented for fairness and balance and be above inherent biases, prejudices and subjective mindsets. Also, the BC provides that Decisions of federal regulatory and administrative bodies such as the panellists in discussion programmes are expected to reflect various NCC and the NBC are subject to judicial review by the Federal High viewpoints, and for political broadcasts, broadcasters are to accord Court (FHC) and can be litigated up to the Supreme Court. Decisions can equal airtime to all political parties or views, with particular regard to be challenged on the grounds of lack of authority, breach of the rules the duration and the particular time within which such programmes can of natural justice, error of law on the face of the record and that the be broadcasted during political campaign periods. decision has been obtained by fraud. Under the NCA, a person dissatisfied or whose interest is adversely affected by any decision of the NCC Key trends and expected changes must comply with a two-stage process within the stipulated time frame, 27 Provide a summary of key emerging trends and hot topics in before proceeding to the FHC for a review of the decision of the NCC. A media regulation in your country. person who is dissatisfied with the decision of the NCC will request that the NCC provide a statement giving the reason for the decision. Upon Beyond the ongoing DSO in Nigeria, the other significant develop- receipt of the NCC statement of reasons, the person may ask the NCC ment that happened in the media broadcasting sector in 2020 is the in writing for a review of its decision specifying the reason and basis introduction of the Addendum by the NBC. The Addendum introduced for its request. The NCC, upon receipt of the written submission, shall new provisions, repealed or renumbered certain provisions of the BC. meet to review its decision, taking into consideration the submission of Stations within the meaning of the NBC Act are statutorily obligated to the dissatisfied person. It is only after the person has exhausted this comply with the provisions of the BC and by extension the Addendum. two-stage process that he or she can proceed to court for a review of Some of the new changes brought by the Addendum include: the NCC’s decision. • the requirement of web or online broadcasters to register Concerning the Competition Commission, the Competition Act with the NBC; provides that an appeal against the decision of the Commission shall lie • the characterisation of local content in broadcasting; to the Competition Tribunal. • prescribing standards for unconventional reportage and user- generated content and how certain types of sports rights may Competition law developments be acquired; 30 Describe the main competition law trends and key merger • the production of advertising for local goods and services; and antitrust decisions in the communications and media • the prohibition of anti-competitive practices; and sectors in your jurisdiction over the past year. • rules governing wholesale offers. In the communications sector, the NCC decided to impose mandatory Failure to comply with these provisions would be deemed as a breach of accounting separation obligation on four mobile network operators the BC and will attract sanctions from the NBC. (MNOs), a submarine cable operator and a collocation and infrastructure sharing provider respectively to, among other things, identify and REGULATORY AGENCIES AND COMPETITION LAW prevent any undue discrimination or practices that substantially lessens competition such as cross-subsidisation, margin squeezes, etc. This Regulatory agencies determination took effect from 15 July 2020 and the licensees subject to 28 Which body or bodies regulate the communications and the determination are to commence the full rollout of accounting sepa- media sectors? Is the communications regulator separate ration by 1 January 2021. from the broadcasting or antitrust regulator? Are there In the broadcast media sector, the Competition Commission on mechanisms to avoid conflicting jurisdiction? Is there a 1 September 2020 commenced an inquiry into the activities of pay-TV specific mechanism to ensure the consistent application of providers to determine if there is any violation of the Competition competition and sectoral regulation? Act. The scope of this inquiry includes whether any particular pay-TV provider has entered into any form of restrictive agreement and/or The Nigerian Communications Commission (NCC) and the Nigerian has abused (or is abusing) its dominant position in the TV broadcasting Broadcasting Commission (NBC) respectively regulate the commu- industry, conducts which are both anti-competitive and prohibited under nications and broadcast sectors, while the Competition Commission the Competition Act. To date, this inquiry remains ongoing. created by the Competition Act is the lead antitrust regulator in Nigeria www.lexology.com/gtdt 101 © Law Business Research 2021 Nigeria Streamsowers & Köhn

Several regulatory and policy measures were taken in the telecoms and Chukwuyere E Izuogu [email protected] media sectors in response to the covid-19 pandemic, namely: • Designation of communications and broadcasting services: Under Otome Okolo the COVID-19 Regulations issued by the President, communica- [email protected] tions and broadcasting services were designated as essential Tamuno Atekebo services. This meant that individuals working in the communica- [email protected] tions and broadcasting sector could continue to work and travel for work during the period when the lockdown was in force. 16D Akin Olugbade Street, off Adeola Odeku Street • Infrastructure sharing and colocation: the NCC approved the Victoria Island sharing of resources by operators throughout the initial period of Lagos the covid-19 outbreak and subsequent lockdown. These included Nigeria fibre-optic cables and other resources in the event of cable cuts Tel: +234 1 271 2276 / 3846 and other unforeseen developments during the initial period of the Fax: +234 1 271 2277 coronavirus outbreak. www.sskohn.com • Thee NCC has temporarily relaxed the do-not-disturb directive that prohibited the sending of unsolicited communications to subscribers who have opted out of such communications, to allow MNOs to disseminate public health information concerning the covid-19 pandemic originating from the National Centre for Disease Control (NCDC). • Through the efforts of the NCC, the NCDC and the Federal Ministry of Health (FMH) partnered with several MNOs to zero rate access to the official website of NCDC and FMH for subscribers on their network. • In line with social distancing protocols, the relevant departments within the NCC developed e-platforms where all licensing requests, consumer complaints and base transceiver station investigation requests could be channelled and also provided designated email addresses to be used for such requests throughout the pandemic period.

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Rose Marie M King-Dominguez, Miguel Franco T Dimayacyac and Leo Francis F Abot SyCip Salazar Hernandez & Gatmaitan

COMMUNICATIONS POLICY offering the contemplated service. The particular parameters and specific requirements utilised by the NTC to assess an application Regulatory and institutional structure will depend on the service being proposed. Parties, such as entities 1 Summarise the regulatory framework for the communications engaged in the same service, may participate in the proceeding to sector. Do any foreign ownership restrictions apply to oppose the application. Typically, it takes up to 10 years for the NTC communications services? to act on the petition. CPCNs usually have a term of 10 years and are renewable upon application. They are non-exclusive and may Communications services enterprises are generally viewed as public be amended. A nationwide application for a CPCN has a filing fee utilities subject principally to provisions of the Philippine Constitution, of 330,981 pesos. the Public Service Act (Commonwealth Act No. 146, as amended) and • Provisional Authority (PA). The PA is an authority to operate issued the Public Telecommunications Policy Act (Republic Act No. 7925). The to a CPCN applicant once it successfully proves that it has the Philippines has other statutes and regulations that specifically apply to financial and technical capacity to deliver its services to the public. the communications sector, such as the Radio Control Act (Act No. 3846, The PA is issued pending the full assessment of the application for, as amended) and the issuances of the National Telecommunications and issuance of, the CPCN. The holder of a PA can already operate Commission (NTC). the service even if the CPCN petition is still pending. A PA’s term is The NTC has supervision and control over telecommunications and 18 months and is renewable upon application. broadcasting entities and generally has the mandate to administer and • Frequency allocation. This is typically applied for and allocated implement laws on the licensing and operations of the covered enti- after the issuance of the PA or CPCN. An application is made using ties. The NTC is an attached agency of the Department of Information the NTC-prescribed form, supported by technical specifications of and Communications Technology (DICT). The DICT is mandated to be the the network and of the equipment to be used. The frequencies shall primary policy, planning, coordinating, implementing and administra- then be allocated upon verification that they are available or are tive entity of the Executive Branch that will plan, develop and promote properly allocated within the National RF Allocation Table and that the national Information and Communication Technology develop- the applicant can properly utilise them. Frequency bands assigned ment agenda. are subject to an annual spectrum user fee, depending on the Public telecommunications entities (PTEs) must be at least 60 per frequency band, channel and coverage applied for. cent Filipino owned, and generally would have to obtain a legislative franchise from the Philippine Congress, as well as certain operating On satellite services, and in general, enfranchised and certificated licences. Broadcasting entities, on the other hand, are considered mass- PTEs, as well as value-added service (VAS) providers and internet media enterprises and under the Philippine Constitution must be wholly service providers (ISPs) duly registered with the NTC are allowed direct owned by Filipinos. access to all satellite systems, whether fixed or mobile, international or domestic. Access is subject to the satellite operator’s commercial pres- Authorisation/licensing regime ence in the Philippines, and the jurisdiction where the operator has been 2 Describe the authorisation or licensing regime. established having reciprocal terms with the Philippines. If the PTE is a VAS provider, the entity need not obtain a The provision of all types of public telecommunications services, Congressional franchise but must obtain a certificate of registration including fixed, mobile and satellite services, is subject to franchise and (CoR) from the NTC, provided it does not set up its own network. Like licensing requirements. other PTEs, it must be at least 60 per cent Filipino-owned. VAS are A PTE would need to be a corporation established in the Philippines services that improve upon the quality and functionality of services with a franchise granted by the Philippine Congress (unless the PTE is ordinarily offered by PTEs, such as audio conferencing and videocon- a value-added service provider). This franchise is in the form of a law, ferencing. The CoR, which specifies the VAS that will be rendered, is and therefore its grant goes through the same process as other types of valid for five years and may be renewed upon application. An application statutes. The typical term of a Congressional franchise is 25 years and for a VAS CoR has a filing fee of 300 pesos. Further, there is an annual is renewable upon application. registration fee of 6,000 pesos for the first five services registered and An enfranchised PTE would also have to obtain certain principal an additional 1,000 pesos for each additional service. licences from the NTC. These are: • the Certificate of Public Convenience and Necessity (CPCN). The application process is of a quasi-judicial nature, where an applicant files a petition for the CPCN issuance, and must prove its legal, technical and financial capability, as well as the feasibility of www.lexology.com/gtdt 103 © Law Business Research 2021 Philippines SyCip Salazar Hernandez & Gatmaitan

Flexibility in spectrum use Universal service obligations and financing 3 Do spectrum licences generally specify the permitted use 6 Outline any universal service obligations. How is provision of or is permitted use (fully or partly) unrestricted? Is licensed these services financed? spectrum tradable or assignable? Universal service obligations (USOs) became a statutory obligation Use of spectrum allocated by the NTC can only be under services allowed in the early 1990s for international gateway facility (IGF) and cellular in the PA or CPCN that are granted to the PTE. In this regard, the Public mobile telephone system (CMTS) operators in the form of mandatory Telecommunications Policy Act and NTC regulations require periodic deployment of a required number of local exchange lines or public review of radio frequency spectrum allocation and assignment. To opti- calling offices. These operators were expected to subsidise the costs of mise the use of the radio spectrum, regulations require radio frequency providing local exchange services from revenues generated from their (RF) to be assigned to those who will use it efficiently and effectively IGF and CMTS operations. But the implementation of USOs through the to meet public demand for telecommunications services. Regulations NTC’s Service Area Scheme has generally become viewed as unsus- provide for the recall of RF unused for at least one year from the date tainable owing to falling revenue from international services, the weak of issuance of the licence. RF licences are granted according to use demand for local exchange carriers in rural areas and the growth of permitted by the National RF Allocation Table, the service licensed to mobile telephony. The NTC has since generally eased the USO’s enforce- the grantee and the radio equipment to be used. ment but has extended the USO to 3G licensees. The NTC now allows An RF spectrum is not tradable or assignable. The NTC has exclu- USO compliance through an equivalent number of telecentres (ie, facili- sive authority to allocate an RF spectrum to specific services and assign ties providing voice, internet or any telecommunications service) in lieu them to qualified entities. Unless the NTC permits otherwise, an RF of local exchange lines or public calling offices. Moreover, there is a spectrum may only be used for services indicated in the National RF Free Internet Access in Public Places Act (Republic Act No. 10929) that Allocation Table and may not be transferred to another entity. However, requires that no fees be collected from users to connect to the public in exceptional instances, the NTC may allow co-use of an RF spectrum. internet access points in public places such as government offices, public educational institutions, public hospitals, public airports and seaports, Ex-ante regulatory obligations and public transport terminals. Recently, the DICT has adopted rules 4 Which communications markets and segments are subject to regarding common towers to improve telecommunications services ex-ante regulation? What remedies may be imposed? throughout the country. Moreover, the Philippine President has recently signed an executive order liberalising access to satellite services for Billing and rate-fixing are subject to ex-ante regulation. The NTC is enfranchised PTEs, VAS providers and ISPs. empowered to regulate and fix rates of telecommunications entities upon due notice and hearing. Further, the NTC regulates the manner Number allocation and portability and procedure of billing subscribers of telecommunication providers. 7 Describe the number allocation scheme and number However, rates for VAS are deregulated. portability regime in your jurisdiction. Concerning accounting separation, the Public Telecommunications Policy Act provides that where a single entity spans more than one cate- Number allocation in the Philippines is administered by the NTC and gory of telecommunications service, a separate book of accounts must follows an open telephone numbering plan and open dial plan. On the be maintained for each category or specialised classification. Separate other hand, the Mobile Number Portability Act (Republic Act No. 11202) books of accounts must also be maintained for VAS. There is also an was signed into law on 8 February 2019, requiring a licensed telecom- Internet Consumer Protection and Net Neutrality bill currently pending munications provider to allow mobile number portability to all qualified in Congress that would require separate books of accounts between subscribers free of charge. A qualified subscriber must be the assignee different data transmission segments, a violation of which would give of the mobile number used in a device that is not locked to a particular rise to a presumption of anti-competitive cross-subsidisation. telecommunications provider and must not have any outstanding finan- The Public Telecommunications Policy Act also provides that cial obligation with the donor provider. The subscriber must also not be where PTEs provide VAS, other VAS providers must not be discrimi- blacklisted owing to previous fraudulent activities. nated against in rates nor denied equitable access to their facilities. One of the leading mobile network operators is already implementing number porting within its own network. The NTC has also Structural or functional separation announced that the commercial rollout for the Mobile Number 5 Is there a legal basis for requiring structural or functional Portability Act will start by 30 September 2021, during which qualified separation between an operator’s network and service subscribers will be able to switch networks for free while retaining their activities? Has structural or functional separation been mobile numbers by submitting a porting application. In this regard, the introduced or is it being contemplated? country’s three major mobile phone network providers have formed a consortium to implement the law and have appointed Syniverse, a There is no existing or proposed law or regulation to effect structural US-based company, as their mobile number portability service provider. separation in the industry. Provided that activities are covered by a PTE’s franchise and operating licences, it may pursue those activities. Customer terms and conditions The Public Telecommunications Policy Act prohibits a single fran- 8 Are customer terms and conditions in the communications chise authorising an entity to engage in both telecommunications and sector subject to specific rules? broadcasting. This was seen as a move to prevent entities from monopolising available resources, such as available frequencies. The NTC regulations state that a clear and unambiguous statement of the terms and conditions on which telecommunications service will be offered, including any discounts or special conditions that will be offered, must be contained in the tariff structure submitted to the NTC for approval. Terms pertaining to the rates, conditions of access and manner of opting in or out must be fully disclosed to subscribers.

104 Telecoms & Media 2021 © Law Business Research 2021 SyCip Salazar Hernandez & Gatmaitan Philippines

Net neutrality Cybersecurity 9 Are there limits on an internet service provider’s freedom to 13 Is there specific legislation or regulation in place concerning control or prioritise the type or source of data that it delivers? cybersecurity or network security in your jurisdiction? Are there any other specific regulations or guidelines on net neutrality? The Cybercrime Prevention Act of 2012 (CPA) (Republic Act No. 10175) protects the confidentiality and integrity of computer data and systems There is currently no law, rule or regulation on net neutrality or zero- by declaring the following as cybercrimes: rating of data transmission in the Philippines. However, the Internet • offences against the confidentiality, integrity and availability of Consumer Protection and Net Neutrality bill currently pending in computer data and systems (illegal access, illegal interception, Congress would generally prohibit, among others, paid prioritisation data interference, system interference, misuse of devices and (including data transmission zero-rating) and bandwidth throttling. cybersquatting); While there is no specific law or rule prohibiting bandwidth throt- • computer-related offences (computer-related forgery, computer- tling, the Department of Justice has issued an advisory warning ISPs related fraud and computer-related identity theft); and against using false, deceptive and misleading advertisements when • content-related offences (cybersex, child pornography and marketing the maximum internet speed in the internet packages that cyber libel). they offer. They must also fully disclose their respective fair use policies and terms of use to give the end users equal opportunities to access The CPA appointed the National Bureau of Investigation and Philippine their services. Failure to comply with these directives are seen as viola- National Police (PNP) as enforcement authorities, and regulates their tions of the Consumer Act (Republic Act No. 7394) and will lead to the access to computer data, creating the Cybercrime Investigation and imposition of the appropriate penalties. Coordinating Centre as an inter-agency body for policy coordination It is possible that bandwidth throttling may be considered as a and enforcement of the national cybersecurity plan, and an Office of form of abuse of dominant position under the Philippine Competition Act Cybercrime within the Department of Justice for international mutual (Republic Act No. 10667). This assumes that the entity engaged in it can assistance and extradition. be shown as having a dominant position in the relevant market. We are The Electronic Commerce Act of 2000 (ECA) (Republic Act No. 8792) not aware of any ruling made by the Philippine Competition Commission penalises: (PCC) on the matter. • hacking and piracy of protected material, electronic signature or copyrighted works; Platform regulation • limits the liability of service providers that merely provide access; and 10 Is there specific legislation or regulation in place, and have • prohibits persons who obtain access to any electronic key, document there been any enforcement initiatives relating to digital or information from sharing them. platforms? The ECA also expressly allows parties to choose their type of level of At present, there is no law dealing specifically with digital platforms. electronic data security and suitable technological methods, subject to However, the Internet Transactions bill currently pending in Congress guidelines issued by the Department of Trade and Industry. aims to regulate online transactions and to establish a regulator dedi- The Access Devices Regulation Act of 1998, as amended, penalises cated to digital platforms. various acts of access device fraud such as using counterfeit access devices. An access device is: Next-Generation-Access (NGA) networks • any card, plate, code, account number, electronic serial number, 11 Are there specific regulatory obligations applicable to personal identification number; NGA networks? Is there a government financial scheme to • other telecommunications service, equipment or instrumental promote basic broadband or NGA broadband penetration? identifier; • other means of account access that can be used to obtain money, Philippine regulators have only recently regulated broadband services goods, services or any other thing of value; or by imposing duties to disclose their service reliability to consumers and • to initiate a transfer of funds (other than a transfer originated solely to observe the minimum service reliability standard of 80 per cent. They by paper instrument). have not yet come up with circulars on standardisation and transition to next-generation access networks such as 5G. Banks, financing companies and other financial institutions issuing access devices must submit annual reports of access device frauds to the National Data protection Bureau of Investigation and the Anti-Cybercrime Group of the PNP. 12 Is there a specific data protection regime applicable to the communications sector? Big data 14 Is there specific legislation or regulation in place, and have The Philippines does not have a data protection regime that specifi- there been any enforcement initiatives in your jurisdiction, cally applies only to the communications sector, although the NTC has addressing the legal challenges raised by big data? issued regulations on retention periods on traffic data for voice and non- voice communications. The general law on privacy of personal data, the The Philippines currently has no specific legislation regarding big data. Data Privacy Act (Republic Act No. 10173), applies to the communica- However, funds were appropriated under the Bayanihan to Recover as tions sector. One Act (Republic Act No. 11494) for the establishment of a computa- tional research laboratory in the University of the Philippines-Diliman Institute of Mathematics to process big data analysis for covid-19 and other pandemic research. Moreover, there is a proposal in Congress to establish a big data centre for research purposes. www.lexology.com/gtdt 105 © Law Business Research 2021 Philippines SyCip Salazar Hernandez & Gatmaitan

Data localisation An enfranchised broadcasting company would have to also obtain 15 Are there any laws or regulations that require data to be certain principal licences from the National Telecommunications stored locally in the jurisdiction? Commission (NTC). These are: • the Certificate of Public Convenience and Necessity (CPCN). The There are no laws generally requiring data to be stored locally. application process is of a quasi-judicial nature, where an applicant files a petition for the CPCN issuance, and must prove its Key trends and expected changes legal, technical and financial capability, as well as the feasibility of 16 Summarise the key emerging trends and hot topics in offering the contemplated service. The particular parameters and communications regulation in your jurisdiction. specific requirements utilised by the NTC to assess an application will depend on the service being proposed. Parties, such as entities There is a proposal in Congress that removes nationality restrictions engaged in the same service, may participate in the proceeding to in telecommunications and media; in effect, liberalising the industries. oppose the application. Typically, it takes up to 10 years for the NTC However, some have expressed the view that the proposal is against the to act on the petition. CPCNs usually have a term of 10 years and Philippine Constitution. are renewable upon application. They are non-exclusive and may In addition, there is pending legislation in Congress that seeks to be amended. A nationwide application for a CPCN has a filing fee regulate internet transactions. Generally, this proposal aims to impose of 330,981 pesos. registration requirements on online merchants, as well as to adopt a • Provisional Authority (PA). The PA is an authority to operate issued code of conduct applicable for all online merchants. This proposal also to a CPCN applicant once it successfully proves that it has the outlines their obligations and corresponding liabilities. financial and technical capacity to deliver its services to the public. There is also a pending Internet Consumer Protection and Net The PA is issued pending the full assessment of the application for, Neutrality bill in Congress that would generally prohibit paid prioritisa- and issuance of, the CPCN. The holder of a PA can already operate tion (including data transmission zero-rating) and bandwidth throttling. the service even if the CPCN petition is still pending. A PA’s term is 18 months and is renewable upon application. MEDIA • Frequency allocation. This is typically applied for and allocated after the issuance of the PA or CPCN. An application is made using Regulatory and institutional structure the NTC-prescribed form, supported by technical specifications 17 Summarise the regulatory framework for the media sector in of the broadcast network and of the equipment to be used. The your jurisdiction. frequencies shall then be allocated upon verification that they are available or are properly allocated within the National Radio There is no general law that applies to the media sector as a whole. Frequency Allocation Table and that the applicant can properly Nevertheless, the laws and regulations in place typically focus on utilise them. Frequency bands assigned are subject to an annual regulating access to content, such as age-gating concerning movies, spectrum user fee, depending on the frequency band, channel and age advisories for television shows, and ownership restrictions and coverage applied for. consumer protection. In addition, the media sector is affected by legislation on press freedom, intellectual property, privacy, criminal law and Foreign programmes and local content requirements the general civil law. 20 Are there any regulations concerning the broadcasting Various government agencies handle content regulation, such as of foreign-produced programmes? Do the rules require a the Movie and Television Review and Classification Board, the Optical minimum amount of local content? What types of media fall Media Board and the National Council for Children’s Television. outside this regime?

Ownership restrictions There are no rules requiring television broadcasters to include a 18 Do any foreign ownership restrictions apply to media minimum amount of local content in their programming. However, the services? Is the ownership or control of broadcasters Broadcast Code of the Philippines (which was formulated by the local otherwise restricted? Are there any regulations in relation organisation of broadcasters and adopted by the NTC) provides that the to the cross-ownership of media companies, including radio, airing of programmes in a foreign language other than English must television and newspapers? take into account the broader interests of the public in the scheduling and presentation of the programmes. Also, stations broadcasting such Only Philippine nationals or corporations, partnerships or associations programmes are mandated to keep a record of the broadcasts for not wholly owned by Philippine nationals may engage in broadcasting. less than six months. In respect of radio programming, the NTC requires There are no regulations concerning the cross-ownership of media. all radio stations to broadcast a minimum of four original Philippine However, an entity cannot engage in both telecommunications and musical compositions every hour. Moreover, rules issued by the Film broadcasting under a single franchise. Development Council of the Philippines prohibit restrictions on the maximum number of Filipino films exhibited to screen in cinemas at any Licensing requirements given week. They also require that an equitable ratio between Filipino 19 What are the licensing requirements for broadcasting, films and foreign films be observed in applicable scenarios every play- including the fees payable and the timescale for the date except in cases where a National Film Festival is held in support necessary authorisations? of the local film industry. There are no similar regulations for online or other media. A broadcasting company would need to be a corporation established in the Philippines with a franchise granted by the Philippine Congress. This franchise is in the form of a law and therefore its grant goes through the same process as other types of statutes. The typical term of a Congressional franchise is 25 years and is renewable upon application.

106 Telecoms & Media 2021 © Law Business Research 2021 SyCip Salazar Hernandez & Gatmaitan Philippines

Advertising Digital switchover 21 How is broadcast media advertising regulated? Is online 24 When is the switchover from analogue to digital broadcasting advertising subject to the same regulation? required or when did it occur? How will radio frequencies freed up by the switchover be reallocated? Only Philippine nationals or corporations, where at least 70 per cent of the capital stock is owned by Philippine nationals, may engage in adver- The NTC was initially set to switch from analogue to digital TV by tising, including online advertising, directed at the Philippine market or 11:59pm on 31 December 2015 and chose the integrated services digital using Philippine mass media. Advertising companies need not obtain a broadcast-terrestrial standard as the sole standard in the delivery of special licence or register with any regulatory body specifically super- digital terrestrial television services in the country. However, this did vising the advertising industry, and there is no such governmental not occur, and the Department of Information and Communications body. Instead, local companies and other participants in the industry Technology has mentioned that the switchover is now scheduled for 31 have formed an organisation called the Ad Standards Council (ASC). It is December 2023. essentially a self-regulating body. Advertising content is principally regulated by the provisions of Digital formats the Broadcast Code of the Philippines and the Consumer Act, as well 25 Does regulation restrict how broadcasters can use their as various special laws and regulations, such as regulations issued on spectrum? tobacco advertisements and those issued by the Philippine Food and Drug Administration. The ASC has also issued a Code of Ethics and No. Regulations allow multiplexing and broadcast of high-definition is guided by its Manual of Procedures. These seek to regulate both feeds. However, an early warning broadcast system is a required feature advertising content and the behaviour of participants in the adver- in the Philippine digital terrestrial television system. In general, broad- tising industry. casters would need to use the spectrum only for the services covered by its franchise and licences. Must-carry obligations 22 Are there regulations specifying a basic package of Media plurality programmes that must be carried by operators’ broadcasting 26 Is there any process for assessing or regulating media distribution networks? Is there a mechanism for financing the plurality (or a similar concept) in your jurisdiction? May the costs of such obligations? authorities require companies to take any steps as a result of such an assessment? Local rules require a cable TV system operating in a community that is within particular field intensity contours of an authorised TV broadcast Media plurality per se has not been the subject matter of regulatory station or stations to carry the TV signals of these stations. A cable tele- efforts in the country. Concepts such as diversity and representa- vision system operating in a community may carry or, upon request by a tion are only beginning to enter the mainstream of public discussion. relevant station licensee or permittee, shall carry the television broad- However, owing to the proliferation of fake news and its consequences cast signals from certain broadcast stations such as non-commercial in Philippine electoral politics, there have been attempts to pass bills educational TV stations. The cable company’s retransmission of broad- regulating social media and penalising fake news. cast signals without charge does not infringe the intellectual property rights of the broadcasting station. In addition to the signals that such Key trends and expected changes cable TV system is required to carry, an access channel should be 27 Provide a summary of key emerging trends and hot topics in provided for the use of certain entities (eg, the national government media regulation in your country. and socio-civic organisations) for free, as a public service feature of the television cable system. There is a proposal in Congress that removes nationality restrictions in telecommunications and media; in effect, liberalising the industries. Regulation of new media content However, some have expressed the view that the proposal is against the 23 Is new media content and its delivery regulated differently Philippine Constitution. from traditional broadcast media? How? On 10 February 2020, the Philippine government filed an action before the Supreme Court seeking the revocation of the legislative Except for special laws against content-related offences online under franchise of ABS-CBN Corporation (ABS-CBN), a leading broadcast the Cybercrime Prevention Act and the Anti-Child Pornography Act company, alleging various violations of the terms of its legislative (Republic Act No. 9775), there are no general regulations expressly franchise. Among others, the government alleged that ABS-CBN had governing new media content, so that to the extent that the new media foreign ownership, which is prohibited by the Philippine Constitution. operator is based in the Philippines and providing a service here, local In a hearing before the Senate, a Philippine Competition Commission authorities will likely try to apply media laws in general. commissioner voiced concerns about the degree of competition within There are existing regulations on the aspect of the transmission the broadcast industry in the Philippines should the legislative franchise of new media. Generally, entities engaged in the delivery of content, be revoked, since a major player will be forced to shut down. However, information, applications, programmes and e-mails online may be on 23 June 2020, the Supreme Court dismissed the case for being moot considered value-added services (VAS) providers. VAS providers need and academic as ABS-CBN’s franchise had already expired on 4 May to be Philippine nationals or corporations the foreign ownership of 2020. On 5 May 2020, the NTC issued a cease and desist order against which does not exceed 40 per cent of the corporation’s capital stock. ABS-CBN directing it to stop its television and radio broadcasting opera- VAS providers do not need to obtain a congressional franchise or a tions. On 10 July 2020, a committee of the House of Representatives CPCN but must register with the NTC. denied ABS-CBN’s bid for a new 25-year franchise due to, among others, alleged violations of foreign ownership restrictions under the Philippine Constitution. To date, ABS-CBN has not been granted a new legislative franchise. www.lexology.com/gtdt 107 © Law Business Research 2021 Philippines SyCip Salazar Hernandez & Gatmaitan

REGULATORY AGENCIES AND COMPETITION LAW

Regulatory agencies 28 Which body or bodies regulate the communications and media sectors? Is the communications regulator separate from the broadcasting or antitrust regulator? Are there mechanisms to avoid conflicting jurisdiction? Is there a specific mechanism to ensure the consistent application of competition and sectoral regulation? Rose Marie M King-Dominguez [email protected] The National Telecommunications Commission (NTC) is the government body that principally regulates the telecommunications and broad- Miguel Franco T Dimayacyac casting industries. The Department of Information and Communications [email protected] Technology, Department of Trade and Industry, and the National Privacy Leo Francis F Abot Commission are mandated to issue relevant regulations to communica- [email protected] tions services providers. Content provision, however, is mainly regulated by the Movie and SyCipLaw Center Television Review and Classification Board and the Optical Media Board. 105 Paseo de Roxas The National Council for Children’s Television issues special regula- Makati City tions. Local broadcasters have formed a self-regulatory body called 1226 the Association of Philippine Broadcasters, which has issued certain Philippines programme standards for television and radio. Tel: +632 8982 3500 The Philippine Competition Commission (PCC) is the main antitrust +632 8982 3600 regulator tasked with curbing anti-competitive agreements, abuse of +632 8982 3700 dominant position, and anti-competitive mergers. However, the NTC www.syciplaw.com has the power to exempt any specific telecommunications service from its rate or tariff regulations if the service has sufficient competition to ensure fair and reasonable rates or tariffs. The NTC nevertheless retains its residual powers to regulate rates or tariffs when ruinous competition Coronavirus results, or when a monopoly or a cartel or combination in restraint of 31 What emergency legislation, relief programmes and other free competition exists. initiatives specific to your practice area has your state implemented to address the pandemic? Have any existing Appeal procedure government programmes, laws or regulations been amended 29 How can decisions of the regulators be challenged and on to address these concerns? What best practices are advisable what bases? for clients?

Decisions of the NTC issued in the exercise of its quasi-judicial powers The Bayanihan to Recover as One Act, which took effect on 15 September may be brought to the Court of Appeals for review either through a 2020, directed the Department of Information and Communications petition for review or a petition for certiorari. The former may be taken Technology (DICT) to temporarily suspend requirements to secure based on questions of law, facts or mixed questions of law and facts, permits and clearances for the construction of telecommunications and while the latter may be taken based on a claim of grave abuse of discre- internet infrastructure. Under the said measure, no national or local tion on the part of the regulator whose decision is being challenged. permit or clearance, except for the building permit, will be required Both are taken by filing verified petitions, with proof of service of a copy in the construction, installation, repair, operation and maintenance of on the adverse party and on the regulator whose decision is challenged, telecommunications and internet infrastructure by independent tower and payment of docket and other fees. companies registered with the DICT, or holders of Certificates of Public Convenience and Necessity or Provisional Authorities granted by the Competition law developments NTC to public telecommunications entities, for three years from the 30 Describe the main competition law trends and key merger law’s effectivity date. Moreover, all regulatory processes and procedures and antitrust decisions in the communications and media for the development and improvement of digital, internet and satellite sectors in your jurisdiction over the past year. technology infrastructure have been streamlined, such that all pending and new applications for the construction of telecommunications and On 29 December 2020, the Philippine Competition Commission (PCC) internet infrastructure must be approved or disapproved within a non- charged a condominium developer with abuse of dominance for extendible period of seven working days. In this regard, no court, except requiring its residents to use its in-house exclusive ISP. It was alleged the Supreme Court, may issue any injunctive relief against the construc- that the developer and its fixed-line internet provider abused their domi- tion of telecommunications infrastructure, including cell sites and cell nance by preventing the entry of competitor ISPs. towers. Telecommunications companies were also required to implement a minimum 30-day grace period for the payment of utilities falling due within the period of Enhanced Community Quarantine or Modified Enhanced Community Quarantine. Concerning amendments to competition laws, the Bayanihan to Recover as One Act also increased the thresholds for compulsory notification to the PCC to 50 billion pesos for a period of two years from the law’s effectivity date.

108 Telecoms & Media 2021 © Law Business Research 2021 Portugal

Nuno Peres Alves and Mara Rupia Lopes Morais Leitão, Galvão Teles, Soares da Silva & Associados

COMMUNICATIONS POLICY • Law No. 99/2009 of 4 November, as amended by Law No. 46/2011 of 24 April, determines the legal framework applicable to admin- Regulatory and institutional structure istrative offences committed within the communications sector, 1 Summarise the regulatory framework for the communications including infringement of legal and regulatory provisions. sector. Do any foreign ownership restrictions apply to communications services? The Electronic Communications Law further assigned the National Communications Authority (ANACOM) as the national regulatory authority. The fundamental law for the electronic communications sector is the Nowadays, there are no restrictions on foreign ownership or invest- Electronic Communications Law, approved by Law No. 5/2004 of 10 ment in the electronic communications sector in Portugal, except for the February, as amended. This law transposes into national legislation limits to cross-ownership (which are not exclusive to foreign investors) Directives 2002/19/EC, 2002/20/EC, 2002/21/EC and 2002/22/EC, all that apply to television and radio activities. of the European Parliament and of the Council of 7 March, and Directive 2002/77/EC of the Council of 16 September. Authorisation/licensing regime The most relevant amendment was approved, with the republica- 2 Describe the authorisation or licensing regime. tion of the entire body of the law, by Law No. 51/2011 of 13 September, to transpose the 2009 EU Regulatory Framework for Electronic The provision of electronic communications networks and services, Communications (the 2009 EU Regulatory Framework). The current whether publicly available or not, is only subject to a general author- version of Law No. 5/2004, as republished by Law No. 51/2011, results isation. This regime determines that the execution of activities in the from the following amendments: Law No. 10/2013 of 28 January; Law electronic communications sector does not depend on any prior deci- No. 42/2013 of 3 July; Decree-Law No. 35/2014 of 7 March; Law No. sion or authorisation by ANACOM but is subject to a mere declaration 82-B/2014 of 31 December; Law No. 127/2015 of 3 September; Law No. of commencement of activity signed by the provider, after which the 15/2016 of 17 June; Decree-Law No. 92/2017 of 31 July, which imple- network or service provider may commence its activities. mented Directive 2014/61/EU of the European Parliament and of the Nevertheless, the use of spectrum frequencies and number alloca- Council of 15 May 2014 on measures to reduce the cost of deploying tion depends on the award of individual rights of use, which shall be high-speed electronic communications networks; and Decree-Law No. conducted by ANACOM. 49/2020 of 4 August, which establishes the sanctioning regime appli- The award of spectrum frequencies depends on the type of cable to the violation of rules on open Internet access and regulated frequency and can be performed through procedures of direct acqui- intra-European calls following Regulation (EU) No. 2015/2120 of the sition, public tender and auction. All frequencies and their respective European Parliament and of the Council of 25 November 2015. types are listed in the National Frequency Allocation Board (QNAF). However, the Electronic Communications Law is not the only key The right to use the frequency is granted for a 15-year period, law in this sector. Several aspects are regulated in separate legal renewable for an equal period. The rights of use of frequencies should instruments: be awarded within 30 days or, when a competitive or comparative • Decree-Law No. 123/2009 of 21 May, as amended by Decree-Law procedure is required (tender or auction), within the deadline set for No. 258/2009 of 25 September; Law No. 47/2013 of 10 July; Law that procedure, not exceeding eight months. The payable fees depend No. 82-B/2014 of 31 December; Decree-Law No. 92/2017 of 31 July on the form of the award. and Decree-Law No. 95/2019 of 18 July, governs the construction Regarding mobile networks, 2G (GSM) and 3G (UMTS) were of infrastructure suitable for the accommodation of electronic granted through a tender offer and 4G (LTE) was granted by auction in communications networks, the deployment of electronic commu- 2011. Currently, the public auction for the attribution of 5G type licences nications networks and the construction of infrastructure for is undergoing. telecommunications in housing developments, urban settlements Under the QNAF, public Wi-Fi services are exempt from licensing. and concentrations of buildings; The individual right of use of numbers is granted on a direct basis • the regime applicable to radio communications networks and and shall be awarded within 15 days. The payable fees are determined stations is established in Decree-Law No. 151-A/2000 of 20 July, by ANACOM. The allocation to operators is executed upon request or as amended; public tender or auction (applicable only if the relevant number is of • the regime for essential public services and the means of user exceptional economic value) and shall take up to 30 days. protection is regulated under Law No. 23/96 of 26 July, as amended; Regarding the applicable fees for the authorisation and licensing • the regimes governing the placing on the market, setting into process, Administrative Rule No. 1473-B/2008 of 17 December, as service and use of radio equipment were approved by Decree-Law amended, approves the value of each payable fee. Fees are due in No. 57/2017 of 9 June; and respect of: www.lexology.com/gtdt 109 © Law Business Research 2021 Portugal Morais Leitão, Galvão Teles, Soares da Silva & Associados

• the issuance by ANACOM of statements supporting rights (issued Structural or functional separation after the receipt of the declaration of commencement of activity); 5 Is there a legal basis for requiring structural or functional • the exercise of the activity by a supplier of electronic communica- separation between an operator’s network and service tions networks and services (the regulatory fee); activities? Has structural or functional separation been • the allocation of rights of use of frequencies and numbers; and introduced or is it being contemplated? • the use of frequencies and numbers. Yes. Under the 2009 EU Regulatory Framework, the Electronic Flexibility in spectrum use Communications Law foresees functional separation as an exceptional 3 Do spectrum licences generally specify the permitted use remedy, if the imposition of all general ex-ante obligations has proven to or is permitted use (fully or partly) unrestricted? Is licensed be insufficient to ensure effective competition. ANACOM shall notify the spectrum tradable or assignable? European Commission, with proper justification, to impose an obligation on vertically integrated undertakings to place activities related to the Over the past 10 years, ANACOM has adopted a more flexible approach wholesale provision of relevant access products in an independently regarding the spectrum use, under the technological neutrality principle operating business entity. On the other hand, the same undertakings underlined in the 2009 EU Regulatory Framework, without neglecting may decide voluntarily to promote functional separation: the split of the acquired rights. wholesale unit shall be subject to prior notification to ANACOM so it can The spectrum licences generally specify the permitted use. All three assess the effect of the intended transaction on existing regulatory obli- licence types already granted – 2G, 3G and 4G – specify the permitted gations, through a coordinated analysis of the different markets related use along with the allocated frequencies. Currently, the public auction to the access network. for the attribution of 5G type licences is undergoing. The Electronic Communications Law also determines, under the The licensed spectrum is both tradable and assignable. It is, EU Regulatory Framework of 2002 and Directive No. 1999/64/EC of therefore, possible to trade or assign a licensed spectrum between the Commission of 23 June 1999, that undertakings providing public companies, according to the rights granted in the licence, as long as electronic communications networks shall operate their cable television ANACOM has not prohibited such transfer in respect of specific rights. network through legally independent bodies if: In the case of transfer, the holders of rights of use shall give • they are controlled by an EU member state or enjoy special rights; ANACOM prior notification of their intention to transfer such rights, as • they have a dominant position in a substantial part of the market well as the conditions under which they intend to conduct the relevant in respect of the provision of public electronic communications transfer. ANACOM is, within 45 working days, entitled to prohibit the networks and publicly available telephone services; or transfer or assignment if the following conditions are not met: • they operate a cable television network created through the enjoy- • the transfer or lease does not distort competition, namely owing to ment of special or exclusive rights in the same geographic area. the accumulation of rights of use; • frequencies are efficiently and effectively used; Universal service obligations and financing • the intended frequency use complies with what has been harmo- 6 Outline any universal service obligations. How is provision of nised through the application of Decision No. 676/2002/EC of the these services financed? European Parliament and of the Council of 7 March (the Radio Spectrum Decision) or other EU measures; or The universal service obligations in Portugal include the following services: • the restrictions outlined in the law in respect of radio and television • connection at a fixed location to the public telephone network and broadcasting are safeguarded. access to publicly available telephone services at a fixed location (including dial-up access to the internet); Ex-ante regulatory obligations • provision of a comprehensive directory and telephone directory 4 Which communications markets and segments are subject to enquiry service; and ex-ante regulation? What remedies may be imposed? • adequate provision of public pay telephones.

The communications markets subject to ex-ante regulation are those In April 2019, ANACOM approved a Recommendation to the Portuguese mentioned in the European Commission Recommendation 2007/879/ Government regarding the designation process for new universal EC of 17 December 2007 on relevant product and service markets, and service providers, considering the expiry of the previous contracts also in the European Commission Recommendation 2014/710/EU of 9 (which occurred on 1 June 2019, in what concerns the connection at October 2014 (replacing the 2007 Recommendation). a fixed location to the public telephone network and access to publicly The remedies ANACOM may impose are the following: available telephone services at a fixed location) and its proposal for • transparency concerning the publication of information; a legislative amendment to the rules on universal service provision. • non-discrimination concerning the provision of access and inter- According to ANACOM’s Recommendation, universal service providers connection and the respective provision of information; are to be designated on a national basis (covering all Portuguese • accounting separation in respect of specific activities related to territory) for each of the services comprised in the universal service access and interconnection; obligations, but these should cease to include provision of a comprehen- • price control; and sive directory and telephone directory enquiry services. Also, ANACOM • cost accounting. has recommended that the following round of contracts should have a limited duration of one year, with a possible extension for one additional ANACOM shall impose the appropriate and justified obligations year, and that the reference amounts for the price of each of the specific according to the nature of the identified problem. services should be significantly reduced. The table opposite lists the applicable ex-ante regulatory obliga- Related to the connection service, there is an additional obligation tions for each of the currently regulated markets. (References to the to provide a special price package for pensioners and retired users. PT Group refer to the Portuguese historical operator, Portugal Telecom, There are no universal service obligations associated with the currently named MEO.) provision of broadband.

110 Telecoms & Media 2021 © Law Business Research 2021 Morais Leitão, Galvão Teles, Soares da Silva & Associados Portugal

Markets Operators concerned Key remedies To meet reasonable requests for access; to enable network access in fair and reasonable conditions; 10 days to justify the denial of access; (applies to MEO only) present a proposal for IP interconnection architecture; non-discriminate in quality of service, delivery time and tariff; Wholesale call termination on MEO and all operators transparency in the publication of information, including reference proposals; publish individual public telephone networks providing call termination on information about network configuration, interconnection points and prices; six months’ provided at a fixed location (Market 1 individual public telephone pre-warning regarding interconnection changes; two months’ pre-warning regarding under the 2014 Recommendation) networks at a fixed location other changes with impact to operators; (applies to MEO only) publish an interconnection reference offer; (applies to MEO only) publish prices, terms and conditions, technical information and information on quality of service; and price control obligation; to set cost-oriented prices; set the same maximum termination price at local and single transit interconnection. To meet reasonable requests for access; Wholesale for voice call termination MEO non-discrimination in the access and interconnection offer and in the respective on individual mobile networks Vodafone information provision; (Market 2 under the 2014 NOS transparency in the publication of information; and Recommendation) price control. To meet reasonable requests for access to network and use of specific network resources; non-discrimination; Wholesale local access provided at transparency; a fixed location (Market 3a under the MEO accounting separation; 2014 Recommendation) price control; and availability of accounting records. Applicable only to non-competitive areas: to meet reasonable requests for access to network and use of specific network resources; Wholesale central access provided non-discrimination; at a fixed location for mass-market MEO transparency; products (Market 3b under the 2014 accounting separation; Recommendation) price control; and availability of accounting records. To meet reasonable requests for access; (applies to MEO only) must include in the new reference offer any viable proposal from the operators; ensure capacity expansion in CAM (Mainland, Azores and Madeira) and inter-island circuits, including capacity up to 10Gbps; to negotiate in good faith with undertakings requesting access and not to withdraw access to facilities already granted; provide for the possibility of co-installation in MEO’s sites; ensure the interconnection between co-installed operators in the MEO sites; provide alternative operators with the information, resources and services on time, on a basis and with a quality not inferior to that offered to MEO’s retail and corporate departments; practice at wholesale level deadlines for delivery and repair of contractual damages shorter than equivalent deadlines in retail markets; not to make fidelity, quantity or capacity discounts without grounds; ensure specific quality of service objectives for Wholesale high-quality access CAM and inter-islands circuits; not to convey to the retail department or to the Group’s provided at a fixed location MEO own companies information about the leased lines service to other operators; and publish (Market 4 under the 2014 performance levels as set in the determination of 11 March 2009; Recommendation) publish and maintain on the website the (new) Ethernet and digital leased lines reference offer; clearly identify the changes made to the offer at each change; 30-day pre-warning regarding changes to the offer; 60-day pre-warning regarding structural changes in the support network or relevant technologies or services in the offer; change the offer within 90 calendar days after notification of the final decision on this market analysis; costing system and accounting separation; to set prices on the basis of cost orientation; reduce by at least 66 per cent the price of traditional CAM circuits up to 2Mbps; provide annual data on the total costs and capacity contracted by operators and that used and reserved by MEO itself; and availability of accounting records (Customs Accounting System), including data regarding revenue from third parties. To meet reasonable requests for access; non-discrimination in the offer of access and interconnection and respective provision of Wholesale for call origination on the information; public telephone network provided at Companies of the PT Group transparency in the publication of information, including reference proposals; a fixed location (Market 2 under the that operate in this market price control obligation and cost accounting; and 2007 Recommendation) accounting separation and cost accounting system regarding specific activities related to access or interconnection (applies to PT Group only).

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The Electronic Communications Law determines that if ANACOM March, and, more recently, by Regulation No. 257/2018 of 8 May, and by verifies that the universal service has net costs and finds such costs to Regulation No. 85/2019 of 21 January. be an excessive burden, it is incumbent upon the government, following the request of the respective provider, to arrange for appropriate Customer terms and conditions compensation taken either from public funds or by sharing the net cost 8 Are customer terms and conditions in the communications with other undertakings providing publicly available electronic commu- sector subject to specific rules? nications networks and services on national territory. Law No. 35/2012 of 23 August (amended and republished by Yes. The Electronic Communications Law establishes several manda- Law No. 149/2015 of 10 September) establishes that the net costs of tory rules applicable to the contracts concluded with consumers and universal service are financed by the Fund for the Universal Service, end users. and determines that the financing of the universal service’s net costs The contract must specify, among other conditions, the following: shall be based on its sharing among undertakings providing public • services provided; communications networks or publicly available electronic communica- • the minimum service quality levels offered; tions services on national territory that, in the calendar year to which • information as to whether or not access to emergency services the net costs relate, registered an eligible turnover in the electronic is provided; communications sector, which gives them a weight equal to or higher • details of prices; than 1 per cent of the sector’s overall eligible turnover. The Fund shall • payment methods offered and any charges or penalties due be deemed to constitute autonomous property, without legal person- because of the choice of each payment method; ality, and is managed and legally represented by ANACOM. • the duration of the contract and the conditions whereby the contract or services may be renewed, suspended or terminated; Number allocation and portability • explicit indication of the subscriber’s willingness in respect of the 7 Describe the number allocation scheme and number inclusion or not of their respective personal information in a public portability regime in your jurisdiction. directory; and • the type of action that might be taken by the provider in reaction to The Electronic Communications Law states that the rights to use network security or integrity incidents. numbers are awarded to companies that offer or use electronic telecommunication networks or services. Those rights are allocated by open, Regarding contract duration, the Electronic Communications Law, as objective, transparent, non-discriminatory and proportionate proce- amended, determines that companies that provide electronic commu- dures. As a rule, the rights to use numbers are awarded by ANACOM nication services must offer contracts without a binding period, as well within 15 days after the submission of the request by the operators. In as contracts with six- and 12-month binding periods. The binding period the case of rights of use for numbers of exceptional economic value, in contracts for the provision of electronic communications services ANACOM can grant them through competitive or comparative selection concluded with consumers may not exceed 24 months, unless in specific procedures, including by tender or auction. cases such as customer consent and equipment upgrade. Since November 2019, ANACOM defines the conditions that enable In parallel with the telecom regulation, customer terms and condi- electronic communications service providers, with a small number of tions are also subject to the regime on standard contractual clauses, customers or those that operate on a relatively small national scale, to approved by Decree-Law No. 446/85 of 25 October, and general use, by agreement, the numbers allocated to other providers in the offer consumer protection regulations. of the same service. This measure will boost competition in the offer of Providers are obliged to communicate their standard contracts to electronic communications services, eliminating barriers to the entry of ANACOM, which is entitled to determine that operators cease or adapt companies in the market, while also optimising the use of numbering immediately to the use of standard contracts where it verifies the failure resources and increasing consumer freedom of choice. to comply with legal rules. All providers of publicly available telephony services (ie, both fixed and mobile) must offer number portability and are obliged to cooperate Net neutrality to enable such portability and ensure minimum quality standards. 9 Are there limits on an internet service provider’s freedom to With the new rules implemented by the revised 2009 EU Regulatory control or prioritise the type or source of data that it delivers? Framework, the right to portability was reinforced by reducing the Are there any other specific regulations or guidelines on net porting deadline to one working day. neutrality? Number portability is managed by an independent entity (the Reference Entity). Regulation (EU) No. 2015/2120 of the European Parliament and of the The Electronic Communications Law determines that number port- Council of 25 November 2015, as amended, establishes common rules ability must be required by the subscriber of the new service provider, to safeguard equal and non-discriminatory treatment of traffic in the accompanied by the note of termination of the former subscription provision of internet access services and related end users’ rights. agreement. The new service provider engages the former provider by This regulation imposes the obligation on internet services providers electronic request, indicating three portability windows in which the port- to treat all traffic equally, without discrimination, restriction or interfer- ability can be executed. The former provider can deny portability only in ence, and irrespective of the sender and receiver, the content accessed very restricted cases, acceptance of the request being the general rule. or distributed, the applications or services used or provided, or the There is a special concern in the regime in preventing any terminal equipment used. Afterwards, the Body of European Regulators unwanted portability, which is why both service providers involved for Electronic Communications sought to clarify the rules of Regulation have a particular responsibility to ensure that the person requesting (EU) No. 2015/2120, by publishing in August 2016 some guidelines portability is the legal subscriber of the contract associated with the on the implementation by national regulators, including ANACOM, of relevant number. European Net Neutrality Rules. Portability is also governed by ANACOM Regulation No. 58/2005 of Under this regulation and guidelines, zero-rating is not prohibited. 18 August, amended and republished by Regulation No. 114/2012 of 13 However, a zero-rating offer where all applications are blocked once the

112 Telecoms & Media 2021 © Law Business Research 2021 Morais Leitão, Galvão Teles, Soares da Silva & Associados Portugal data cap is reached except for zero-rated applications would infringe the Law No. 41/2004 determines that undertakings providing regulation. Also, bandwidth throttling is permitted only as an extraor- electronic communications networks or services shall ensure the dinary measure imposed by law, by a court decision or by a public inviolability of communications and the related traffic data through authority. It is also permitted in other cases, such as, to preserve the a public communications network and publicly available electronic integrity and security of the network and to prevent impending network communications services. Listening, tapping, storage or other kinds of congestion. interception or surveillance of communications and the related traffic data by anyone other than users is prohibited without the prior and Platform regulation explicit consent of the users concerned, except for cases provided 10 Is there specific legislation or regulation in place, and have in the law. there been any enforcement initiatives relating to digital To this effect, providers of publicly available electronic commu- platforms? nications services shall take appropriate technical and organisational measures to ensure the security of their services, in cooperation with There is no specific Portuguese legislation or regulation relating to the the provider of the public communications network. generality of digital platforms, besides the law applicable to informa- There is an obligation of the providers of publicly available election society services and e-commerce – Decree-Law No. 7/2004 of 7 tronic communications services to notify the National Data Protection January, as amended. Notwithstanding, digital platforms relating to Commission (CNPD) of any personal data breach. Where the personal gambling and crowdfunding are regulated by the legislation applicable data breach is likely to adversely affect the personal data of the to the activities provided through these platforms. subscriber or user, providers of publicly available electronic communi- Digital platforms used for transportation activities are regulated by cations services shall also notify the latter of the breach. Law No. 45/2018 of 10 August. In the scope of this law, the CNPD and ANACOM are entitled to: • draw up regulations on practices to be adopted to comply Next-Generation-Access (NGA) networks with this law; 11 Are there specific regulatory obligations applicable to • give orders and make recommendations; NGA networks? Is there a government financial scheme to • publish on the respective websites any codes of conduct they are promote basic broadband or NGA broadband penetration? aware of; and • publish on the respective websites any other information deemed There are no specific regulatory obligations. to be relevant. However, in the context of the deployment of NGA networks, the regime governing the construction of infrastructure suitable for Cybersecurity the accommodation of electronic communications networks and the 13 Is there specific legislation or regulation in place concerning access to such infrastructure by telecommunications operators has cybersecurity or network security in your jurisdiction? been approved by Decree-Law No. 123/2009 of 21 May, as amended by Decree-Law No. 258/2009 of 25 September, Law No. 47/2013 of 10 July, Article 54-A to 54-G of the Electronic Communications Law enshrines Law No. 82-B/2014 of 31 December, Decree-Law No. 92/2017 of 31 July obligations applicable to operators providing public communications and Decree-Law No. 95/2019 of 18 July. networks or publicly available electronic communications services, There is no government financial scheme to promote basic broad- including taking appropriate technical and organisational measures band. However, in 2008, following a public tender, four contracts were to appropriately prevent, manage and reduce the risks posed to the executed between the Portuguese state and two private companies, security of networks and services, aiming, in particular, to prevent or regarding NGA broadband penetration in rural areas. In all cases, the minimise the impact of security incidents on interconnected networks, public investment is less than 50 per cent of the total amount necessary, at the national and international level, and users, and to notify ANACOM and such public investment was funded with EU funds. The contracts of a breach of security or loss of integrity with a significant impact on were executed after the corresponding European Commission decision the operation of networks or services. ANACOM is entitled to approve regarding state-aid rules. and impose technical implementing measures on operators that provide public communications networks or publicly available electronic Data protection communications services. 12 Is there a specific data protection regime applicable to the It is incumbent on ANACOM to: communications sector? • inform the national regulatory authorities of other member states and the European Network and Information Security Agency Yes. In the electronic communications sector, the processing of personal (ENISA) where this is deemed to be justified on account of the scale data is regulated by Law No. 41/2004 of 18 August (which trans- or seriousness of the breach of security or loss of integrity notified poses into national legislation Directive 2002/58/EC of the European by the operators; Parliament and of the Council of 12 July, concerning the processing of • inform the public, by the most appropriate means, of any breach personal data and the protection of privacy in the electronic communi- of security or loss of integrity or to require operators to do so, cations sector). This law was amended by Law No. 46/2012 of 29 August where it determines that disclosure of the breach is in the public (which transposes the part of Directive 2009/136/EC amending Directive interest; and 2002/58/EC of the European Parliament and of the Council of 12 July). • submit an annual summary report to the European Commission This regime aimed to specify and complement the provisions of Law No. and ENISA on the notifications received on breach of security or 67/98 of 26 October, which has now been revoked by Law No. 58/2019 loss of integrity, by the operators, and the action taken thereon. of 8 August, which transposed the Regulation (EU) No. 2016/679 of the European Parliament and of the Council of 27 April 2016 on the protec- In March 2019, ANACOM enacted a specific regulation governing in tion of natural persons concerning the processing of personal data and greater detail technical and implementation aspects of the above legal the free movement of such data, and repealing Directive No. 95/46/EC provisions regarding the security and integrity of electronic communi- (General Data Protection Regulation), into the Portuguese legislation. cations networks and services. www.lexology.com/gtdt 113 © Law Business Research 2021 Portugal Morais Leitão, Galvão Teles, Soares da Silva & Associados

Additionally, Law No. 109/2009 of 15 September (which transposes widespread use, to promote inclusion and digital literacy in the most into national legislation the Framework Decision No. 2005/222/JHA of disadvantaged sections of the population, according to the resolution of the Council of the European Union of 24 February 2005), establishes the Council of Ministers 30/2020, which approved the Digital Transition substantive and procedural criminal provisions, as well as provisions Action Plan. on international cooperation in criminal matters related to the field of The government and ANACOM are preparing the draft of a new cybercrime. Finally, Law No. 46/2018 of 13 August, which establishes electronic communications law, to transpose into national legisla- the legal framework for security in cyberspace and transposes Directive tion Directive (EU) 2018/1972 of the European Parliament and of the (EU) 2016/1148 of the European Parliament and of the Council of 6 Council of 11 December 2018 establishing the European Electronic July 2016, concerning measures for a high common level of security Communications Code. Under the Directive, the new law should be in of network and information systems across the European Union (NIS force by 21 December 2020. Directive), is also applicable. MEDIA Big data 14 Is there specific legislation or regulation in place, and have Regulatory and institutional structure there been any enforcement initiatives in your jurisdiction, 17 Summarise the regulatory framework for the media sector in addressing the legal challenges raised by big data? your jurisdiction.

There is no specific legislation or regulation relating to or addressing The media sector in Portugal is regulated by the Regulatory Authority for the issues arising from big data. Media (ERC), a public entity created by Law No. 53/2005 of 8 November. There are three key legal frameworks, one for each of the Data localisation different areas: 15 Are there any laws or regulations that require data to be • Television Law No. 27/2007 of 30 July, as amended by Law No. stored locally in the jurisdiction? 8/2011 of 11 April; Law No. 40/2014 of 9 July Law No. 78/2015 of 29 July; Law No. 7/2020 of 10 April; and Law No. 74/2020 of There are no laws or regulations that require data to be stored locally. 19 November; • Radio Law No. 54/2010 of 24 December, as amended by Law No. Key trends and expected changes 38/2014 of 9 July and Law No. 78/2015 of 29 July; and 16 Summarise the key emerging trends and hot topics in • Press Law No. 2/99 of 13 January, as amended by Law No. 18/2003 communications regulation in your jurisdiction. of 3 February; Law No. 19/2012 of 8 May; and Law No. 78/2015 of 29 July. In the context of the emergency responses pursuant to the covid-19 pandemic, the Portuguese government approved specific legislation On the subject of changes, Law No. 78/2015 of 29 July introduced several (Decree-Law No. 10-D/2020 of 9 April) that allowed electronic commu- amendments regarding the promotion of transparency in the owner- nications operators to adopt exceptional traffic management measures ship, management and financial resources of undertakings pursuing to prevent or mitigate congestion in their networks and imposed some social communication activities, addressing the concerns of information obligations related to the provision of basic services and critical clients and conflict of interests in these areas and amending the Press Law, the (health system and security forces, etc). This exceptional framework Television Law and the Radio Law. was repealed in August 2020. However, due to the second lockdown Law No. 33/2016 of 24 August supports the expansion of the provi- in Portugal, some of its obligations were reinstated in January 2021 sion of digital terrestrial television programme services, ensuring by Decree-Law No 14-A/2021 of 12 January, with obligations such as proper technical conditions and price control. identifying critical electronic communications services and defining categories of priority customers. Other exceptional and temporary Ownership restrictions measures were adopted in response to the coronavirus, namely those 18 Do any foreign ownership restrictions apply to media provided for in Law No. 7/2020 of 10 April, which approved a set of rules services? Is the ownership or control of broadcasters aimed at prohibiting the suspension and supply of electronic communi- otherwise restricted? Are there any regulations in relation cation services during the initial state of emergency and the following to the cross-ownership of media companies, including radio, month in cases where consumers were in financial difficulty due to television and newspapers? the pandemic. This prohibition is still in force, at least during the first part of 2021. Regarding television and radio, although no foreign ownership restric- Meanwhile, the Body of European Regulators for Electronic tions apply, there are some restrictions on investment. Communications (BEREC) approved the ‘Joint Statement from the In television, no company can directly or indirectly own more than Commission and the Body of European Regulators for Electronic 50 per cent of the licences issued for free-to-air television. Political Communications (BEREC) on coping with the increased demand for parties or associations, local authorities or their associations, trade network connectivity due to the Covid-19 pandemic’, which discussed unions, or employers or professional associations are not allowed to the imminent need to adopt exceptional traffic management measures perform or finance, either directly or indirectly, television activity. in the light of the rules on Open Internet Access. In radio broadcasting, ownership is restricted to 10 per cent of The public auction to award the spectrum for the deployment of 5G the local radio licences issued in Portuguese territory, or several radio is already being carried out by the government and ANACOM is expected licences equal to 50 per cent or more of the radio stations with the same to be completed within the first quarter of 2021. territorial coverage and using the same frequency band. Therefore, More recently, within the scope of new a digital legislative package, companies cannot directly or indirectly hold more than the above- the government is working with operators and regulators to create mentioned percentages. a social tariff for internet services. The objective is to create a social The Press Law does not specifically regulate ownership or control, tariff for access to broadband internet services that allows its most so general competition law rules apply.

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The ownership or control of media companies, including radio, Advertising television and newspapers, can also be restricted within the context of 21 How is broadcast media advertising regulated? Is online concentrations between undertakings: general rules of competition law advertising subject to the same regulation? apply, and the decision of the Competition Authority is subject to a prior opinion of the ERC, which shall be mandatory if the ERC considers that Broadcast media advertising is regulated by the Advertising Code the concentration harms media plurality. (approved by Decree-Law No. 333/90 of 23 October, as amended), more specifically, by the Television and Radio Law, regarding advertising in Licensing requirements television and radio, respectively. 19 What are the licensing requirements for broadcasting, The Advertising Code regulates sensitive areas such as adver- including the fees payable and the timescale for the tising of alcoholic beverages and tobacco, and false advertising. The necessary authorisations? Code states that advertising must respect human dignity and must not promote discrimination or any harmful behaviour. Under both the Television and Radio Law, television and radio broad- Concerning television, the amount of spot advertisement and tele- casting shall only be performed by companies that pursue such shopping in every two-hour period shall not exceed 10 per cent or 20 per activities as their main corporate object. cent of the airtime, depending on the type of programme service: pay The right to broadcast television and radio is subject to the award TV services or free-to-air television programme services, unrestricted of a licence by the ERC through a public tender launched by a deci- or subject to a subscription. This limit excludes announcements made sion of the government. It is incumbent upon the ERC to grant, renew, by television operators in connection with their own programmes and alter or repeal licences or authorisations to pursue media broadcasting ancillary products directly linked to those programmes, and also public activity. The fees and timescale associated with such activity depend on service or public interest announcements and humanitarian appeals the terms provided in the public tender. broadcast free of charge, as well as the identification of sponsorships. The spectrum allocation for the performance of television and Windows devoted to teleshopping shall be of a minimum uninterrupted radio broadcasting is one of the National Communications Authority’s duration of 15 minutes. Currently, a proposal exists for a Directive (ANACOM) statutory goals, which ANACOM must execute having (amending Directive No. 2010/13/EU of 10 March), which stipulates that considered the ERC’s opinion. The use of the spectrum intended for the daily proportion of television advertising spots and teleshopping broadcasting unrestricted free-to-air television programme services spots within the period between 7am and 11pm shall not exceed 20 per and radio is made under the National Frequency Allocation Board. cent. Advertising is also prohibited for foodstuffs and drinks with a high The conditioned access television programme services that require energy value, salt content, sugar, saturated fatty acids and processed a subscription (pay TV) do not use a spectrum and therefore such broad- fatty acids in television programme services and audiovisual commu- casting is only subject to obtaining a licence granted by the ERC. nication services on request and on the radio in the 30 minutes before Concessions for public media broadcasting services, both radio and and after children’s programmes, and television programmes that have television, shall be granted for a 15-year period, subsequently renew- a minimum of 25 per cent audience below 16 years old, as well as the able for equal periods, under the terms of the concession contract to be insertion of advertising in the respective interruptions. executed between the state and the concessionaire. The Radio Law also predicts similar restrictions. The inclusion of In general, fees payable to the ERC in respect of the exercise advertising in the broadcast programmes must not affect the integrity of of the media activity were approved by Decree-Law No. 103/2006 the programmes and shall take into account programmes’ breaks, their of 7 June, amended by Decree-Law No. 70/2009 of 31 March, recti- duration and nature. The broadcasting of advertising material shall not fied by the Statement of Rectification No. 36/2009 of 28 May and exceed 20 per cent of the total licensed programme services airtime and amended by Decree-Law No. 33/2018 of 15 May. The amounts of the sponsored programme slots must make explicit reference to the spon- fees due concerning the issuance of a licence by the ERC are defined sorship at the beginning of the programme. in Administrative Rule No. 136/2007 of 29 January, as amended by The Press Law does not specifically regulate advertising in the Decree-Law No. 70/2009 of 31 March and Administrative Rule No. sector, so general rules apply. 785/2009 of 27 July. Must-carry obligations Foreign programmes and local content requirements 22 Are there regulations specifying a basic package of 20 Are there any regulations concerning the broadcasting programmes that must be carried by operators’ broadcasting of foreign-produced programmes? Do the rules require a distribution networks? Is there a mechanism for financing the minimum amount of local content? What types of media fall costs of such obligations? outside this regime? ANACOM shall impose must-carry obligations upon undertakings The Television Law mandates that operators who provide television providing electronic communications networks used for the distribution programme services with national coverage shall reserve a majority of radio or television broadcasts where such networks are used by a proportion of their transmission time for European works, excluding significant number of end users as the principal means of receiving radio the time appointed to news services, sports events, games, advertising, and television broadcasts. Those obligations shall be to transmit radio teleshopping and teletext services. and television broadcast channels and services as specified by ANACOM, Concerning local requirements, the Radio Law also determines under the law. Must-carry obligations shall be imposed only where that the music programming of radio programme services must include they are necessary to meet clearly set purposes of general interest and Portuguese music with a minimum quota ranging from 25 to 40 per shall be reasonable, proportionate, transparent and subject to period- cent. Aside from these specific obligations, there is also a general rule ical review. for the media sector to extend television programming to regional or Under the Television Law, the provider of the digital terrestrial local contents, broadcast information with a specific interest for the broadcasting network is obliged to reserve transmission capacity for audience’s geographic scope and promote typical values of regional or television programme services broadcast by terrestrial means in the local cultures. analogue mode provided by operators holding licences or concessions www.lexology.com/gtdt 115 © Law Business Research 2021 Portugal Morais Leitão, Galvão Teles, Soares da Silva & Associados

in force at the date of entry into force of said law (which are the three information that observes pluralism, accurateness and independence, free-to-air Portuguese TV operators with national coverage). Under Law and to ensure diverse and plural programming, including during peak No. 33/2016 of 24 August, the same provider is also obliged to reserve viewing periods. These powers are used within the supervision of the capacity for two thematic programme services produced by the public sector, including in the scope of administrative infringements and the service provider. licensing administrative procedures.

Regulation of new media content Key trends and expected changes 23 Is new media content and its delivery regulated differently 27 Provide a summary of key emerging trends and hot topics in from traditional broadcast media? How? media regulation in your country.

In general, new media content and its delivery are not regulated differ- Following Decision (EU) No. 2017/899 of the European Parliament and ently from traditional broadcast media, with few exceptions. of the Council on the use of the 470-790MHz frequency band in the The Television Law excludes from its subject the concept of televi- European Union, on 27 June 2018, ANACOM approved the ’National sion communication services operating individual demand. roadmap for the 700 MHz band’, containing the harmonised technical Content provided through non-linear broadcasting services (eg, conditions and a common deadline for effective use of the 700MHz band video-on-demand from the linear broadcasting service) would normally and long-term use of the sub-700MHz frequency band for audio-visual be regulated in the same manner as other broadcasting services, but is, distribution pursuant to the development of the fifth mobile genera- in fact, subject to a lighter regulatory regime. This regime includes basic tion. The roadmap was approved by the government, through an order rules on the protection of minors, the prevention of racial hatred and the issued by the Secretary of State for Infrastructure and should be imple- prohibition of certain types of publicity. mented soon. On 9 September 2020, the ERC approved a regulation, Regulation Digital switchover No. 835/2020 of 9 of September on the transparency of the financial 24 When is the switchover from analogue to digital broadcasting resources of media operators. required or when did it occur? How will radio frequencies freed up by the switchover be reallocated? REGULATORY AGENCIES AND COMPETITION LAW

The provision of the digital broadcasting service was awarded to MEO Regulatory agencies by tender offer in 2008. The switchover from analogue to digital was 28 Which body or bodies regulate the communications and media concluded in 2012, as scheduled, with all remaining transmitters and sectors? Is the communications regulator separate from the relays still broadcasting analogue signals being switched off on 26 April broadcasting or antitrust regulator? Are there mechanisms to that year. As of 12.30pm on that day, all digital television signals being avoid conflicting jurisdiction? Is there a specific mechanism to broadcast in Portugal became digital. ensure the consistent application of competition and sectoral The radio frequencies freed up by the switchover were primarily regulation? allocated to the 4G (LTE) mobile network. The National Communications Authority (ANACOM) is the regulator in Digital formats the electronic communications and postal sector and the media sector 25 Does regulation restrict how broadcasters can use their is regulated by the Regulatory Authority for Media (ERC). The antitrust spectrum? regulator is a different body, the Portuguese Competition Authority (ADC), responsible for the implementation of the general framework for ANACOM and the ERC are in charge of the regulation of the spectrum competition’s protection. used in media services and they authorise the use of the frequencies and The general framework for the protection of competition, approved supervise broadcasters’ fulfilment of their obligations. These obligations by Law No. 19/2012 of 8 May, determines that when a market subject to can include almost every aspect of the spectrum use, from technical sectoral regulation is concerned, the ADC shall request the prior opinion requirements to general obligations related to the broadcasting activities. of the respective regulatory authority before applying any measure. The ANACOM also has powers to modify, revise and even impose new sectoral regulator shall then have a maximum period of five working conditions grounded on public interest reasons. Currently, there are no days to issue its opinion. specific regulations restricting spectrum use concerning multi-chan- In general, the relevant legislation for each sector defines mech- nelling, high-definition and data services, other than the restrictions anisms to avoid conflicting jurisdiction. Both ANACOM and the ERC established in the licences or arising from legal must-carry obligations. organic statutes determine that ANACOM and the ERC shall cooperate and collaborate with the ADC while respecting the corresponding assign- Media plurality ments in matters relating to the implementation of the legal framework 26 Is there any process for assessing or regulating media for competition in the communications and media sectors. plurality (or a similar concept) in your jurisdiction? May the For cooperation between sectoral regulators and the ADC in the authorities require companies to take any steps as a result of application of competition law, the relevant entities have entered into such an assessment? bilateral cooperation agreements, such as the Protocol for Cooperation executed on 26 of September 2003 between ANACOM and the ADC and the There is no specific process for ex-ante assessment or regulation Protocol signed on the 27 of June 2007 between ANACOM and the ERC. regarding media plurality, besides the intervention of the ERC in the To ensure the consistent enforcement of competition and sectoral context of concentrations between undertakings. regulation, the applicable legislation sets out that the violation of Both ANACOM and the ERC may contribute, within the scope of their sectoral regulation as an administrative offence is subject to the appli- remit, to ensure the implementation of policies aimed at the promotion of cation of fines, which can be up to €5 million under the Electronic cultural and linguistic diversity, as well as pluralism. Specifically, in the Communications Law, €375,000 under the Television Law and €100,000 television, radio and press sectors, the ERC is incumbent to guarantee under the Radio Law.

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Also, ANACOM and the ERC can suspend and even revoke licences in case of severe offences. The administrative offences in the media sector are also weighted by the ERC in the process of licence renewal, which can cause an adverse effect resulting in the denial of the request for renewal.

Appeal procedure 29 How can decisions of the regulators be challenged and on what bases? Nuno Peres Alves [email protected]

The application of fines as a result of an administrative offence can be Mara Rupia Lopes contested at the Court of Competition, Regulation and Supervision. [email protected] The other decisions issued by the regulators shall be contested before administrative courts. In the appeal proceedings, only grounds Rua Castilho 165 related to law and procedure may be used. The merits of the adminis- 1070-050 Lisbon trative decisions regarding the use of discretionary powers cannot be Portugal discussed before the courts, unless based on an infringement of general Tel: +351 213 817 400 principles of law, such as equality, proportionality and impartiality, or an Fax: +351 213 817 499 ostensive error of judgement. www.mlgts.pt

Competition law developments 30 Describe the main competition law trends and key merger and antitrust decisions in the communications and media • certain quality of service parameters; sectors in your jurisdiction over the past year. • the standard deadlines for responding to consumer complaints; • defined periods within which to ensure specific mobile broadband The past few years have witnessed some interesting merger and anti- coverage obligations; and trust decisions in the communications and media sectors in Portugal. • an extension of remote portability request implementation dead- In 2019, the Portuguese Competition Authority also decided to close lines to five business days. several ongoing investigations into the acquisition of sports broadcasting rights and a rights-sharing agreement between electronic communica- This exceptional set of rules was repealed in August 2020. However, tions (pay TV) operators given the lack of evidence that the practices due to the second lockdown in Portugal, some of its obligations were in question might result in any restrictive effects on competition in the reinstated in January 2021 by Decree-Law No. 14-A/2021 of 12 January, affected markets. Closure of these investigations follows a trying two-year which included identifying critical electronic communications services period during which the operators in question were routinely required and defining categories of priority customers. to provide very extensive information and documentation in response to Other exceptional and temporary measures were adopted in several requests for information put forward by the competition authority. response to the coronavirus such as those provided for in Law No. A new and innovation-friendly regulatory paradigm seems to 7/2020 of 10 April, which approved a set of rules aimed at prohibiting be emerging, having, for example, a recent Issues Paper from the the suspension of supply of electronic communication services during Portuguese Competition Authority on Technological Innovation and the initial state of emergency, and in the following month, in cases Competition in the Financial Sector, which proposed the creation of where consumers were in financial difficulty due to the pandemic. To regulatory sandboxes to encourage the development of fintech start- date, this prohibition is still in force. ups and new business models for the financial sector.

In the context of the covid-19 pandemic, the Portuguese government has enacted specific legislation enabling electronic communications operators to adopt exceptional traffic-management measures to prevent or mitigate network congestion during lockdown periods such as Decree-Law No. 10-D/2020 of 23 March, which aimed at responding to the sizeable increase in traffic volumes on fixed and mobile networks by adopting exceptional and temporary measures for the electronic communications sector, such as identifying critical electronic communications services and defining categories of priority customers. Decree-Law No. 10-D/2020 also temporarily exempted electronic communications network and service providers from complying with several obligations, such as: www.lexology.com/gtdt 117 © Law Business Research 2021 Russia

Anastasia Dergacheva, Ksenia Andreeva, Anastasia Kiseleva, Kamil Sitdikov and Alena Neskoromyuk Morgan, Lewis & Bockius LLP

COMMUNICATIONS POLICY communications services and determines plans and programmes for the allocation of radio-frequency bands. In certain cases, it can also Regulatory and institutional structure suspend or terminate frequency allocation. 1 Summarise the regulatory framework for the communications The Federal Antimonopoly Service (FAS) is a federal executive sector. Do any foreign ownership restrictions apply to body in the field of competition, state procurement and advertising in communications services? all industry sectors, including telecommunications. It also regulates prices for communications services offered by the natural monopolies Regulatory framework (eg, Russian Post) and ‘significant operators’, and participates in price- The key statute for the communications sector is Federal Law No. related disputes. It is entitled to adopt regulations, enforce laws and 126-FZ On Communications of 7 July 2003 (the Communications Law). It impose fines and other sanctions in areas of concern. provides a regulatory framework for communications services in Russia, outlines communications operators’ and users’ rights and obligations, Foreign ownership restrictions the powers of regulators and other matters. A significant amount of Russian law has no general rule restricting foreign ownership in regulation is implemented through subordinate legislation adopted by the communications sector. However, as a matter of practice, only the Russian government and other authorities. The key licensing and Russian-registered entities can apply for and obtain licences to provide communication services rules include: communications services. These entities may have foreign ownership • Russian Government Decree No. 2385 on Licensing of the Activities or other control. At the same time, certain restrictions apply in related in the Field of Communication Services and on Invalidation of areas such as the mass-media sector. Certain Acts of the Russian Federation Government of 30 December Further, certain Russian companies carrying out communications 2020 (Decree No. 2385); activities may be deemed as ‘having strategic importance for ensuring • Russian Government Decree No. 575 on Approval of Rules the country’s defence and state security’ (strategic companies) and are on Providing Telematics Communications Services of 10 subject to Federal Law No. 57-FZ on the Procedure for Making Foreign September 2007; and Investments in Business Companies Having Strategic Importance to • Russian Government Decree No. 785 on Approval of Rules on the National Defence and State Security of 29 April 2008 (the Foreign Providing Communications Services for Television and (or) Radio Strategic Investments Law). These include companies acting as commu- Broadcasting of 22 December 2006. nications operators and having a dominant market position (generally, more than a 35 per cent share) concerning the national communications Regulatory bodies market, fixed telephone services to no fewer than five Russian regions, The Russian government is the main Russian executive body and issues fixed telephone services in Moscow, St Petersburg or Sevastopol or in key regulations in the communications sector and supervises the activi- certain Russian ports. ties of subordinate bodies. To acquire direct or indirect control of such entities (or to acquire The Ministry of Digital Development, Communications and Mass fixed assets of such companies exceeding 25 per cent of the aggregate Media (Minkomsvyaz) is the principal regulatory body for the commu- book value), foreign investors may need to obtain the consent of the nications sector. It develops and implements state policy in the government’s foreign investment control commission (the government telecommunications sector, including with the use of the radio-frequency commission) headed by the Russian Prime Minister, subject to certain spectrum, and adopts various regulations within these spheres. thresholds, exemptions, specific regimes for state-owned and offshore The Federal Service for Supervision of Communications, foreign investments and other requirements provided in the law. Also, Information Technology and Mass Media (Roskomnadzor) is respon- under Federal Law No. 160-FZ on Foreign Investments in the Russian sible for state control and supervision in the sphere of communications. Federation of 9 July 1999 and the Foreign Strategic Investments Law, Among other things, it issues communications licences and holds the head of the government commission has the authority and discre- tenders for granting such licences (where required), registers radio- tion to order that any foreign investment concerning any Russian electronic and high-frequency devices, participates in the import control company (ie, not necessarily a strategic company) should be cleared by of such devices, issues permits for the use of communications networks the government commission. and telecom-designated constructions and maintains relevant state registers. It is authorised to conduct inspections and to impose sanctions (eg, fines and the suspension of licences) for discovered violations. The State Commission on Radio Frequencies regulates the radio-frequency spectrum. The commission decides which part of the radio-frequency spectrum would be available for the provision of which

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Authorisation/licensing regime Flexibility in spectrum use 2 Describe the authorisation or licensing regime. 3 Do spectrum licences generally specify the permitted use or is permitted use (fully or partly) unrestricted? Is licensed Communications licences spectrum tradable or assignable? Government Decree No. 2385 contains an exhaustive list of communications services requiring a communications licence. It includes, among Spectrum permits in Russia specify permitted use by reference to the others, communications services for cable, terrestrial broadcasting, type of radio-electronic device that the spectrum permit holder can use telematics and data communications services. Licences are granted by in the permitted range of frequencies. Spectrum permits also specify Roskomnadzor. Roskomnadzor maintains a publicly available register of territory, purposes and other conditions of the spectrum use. Changes licences. The licensing process includes the submission of the applica- to the permitted parameters of use require re-issuance of the spec- tion with attachments, which will vary depending on the type of services trum permit. applied for. On average, it takes about 75 days to obtain a communica- In certain cases, it is possible to use the spectrum based on a non- tions licence. The duration of a licence can be up to 25 years. personalised general licence that applies to all radio electronic devices For certain telecommunications services, such as TV or radio of a particular type (eg, to certain short-range devices). broadcasting, a communication licence is not sufficient, and a sepa- Spectrum permits are issued by Roskomnadzor based on the rate broadcasting licence is required. Broadcasting licences are issued decisions of the State Commission on Radio Frequencies. The spec- by Roskomnadzor under separate regulations but also based on trum permit is not tradable or assignable but can be transferred to applications. another user based on the decision of the State Commission on Radio In certain cases, the communications licence may be granted Frequencies. only via a public tender, for instance, if it involves the use of the radio frequencies spectrum. Ex-ante regulatory obligations 4 Which communications markets and segments are subject to Radio frequencies ex-ante regulation? What remedies may be imposed? The Radio Frequencies (RF) Commission allocates RFs among relevant radio services (for civil use, military use and other purposes) based on Russian telecommunication laws impose certain restrictions and obli- the Table of Distribution of RFs approved by the Russian government gations on telecommunication operators that alone, or together with from time to time (generally, once every four years). their affiliates, control at least 25 per cent of the installed capacity or Further, Roskomnadzor allocates particular RFs and RF channels. have the ability to put through at least 25 per cent of traffic in a certain The allocation procedure varies depending on the type of communica- geographical (numbering) zone or Russia generally (significant operations services involving RFs. But, in general, to obtain an RF permit, the tors). Roskomnadzor maintains the register of significant operators. applicant must undergo a series of expert reviews performed by the Significant operators must ensure equal access to their networks Service for Radio Frequencies and various state security agencies. Also, and equal treatment for the traffic of telecom operators providing if a company applies for a licence to provide communication services in similar services. Significant operators are required to publish the rules a territory with limited resources of the public communication network on interconnection with their networks and submit them for the review or in a territory where the number of communication operators is of the regulator. The regulator has the right to issue a directive requiring limited by the possibility of using the available RFs, permits are allo- the operator to amend its rules if the regulator believes that the rules cated via tenders. There is a separate procedure for the allocation of are not in line with the telecommunications laws and regulations. RFs for terrestrial and satellite broadcasting. Interconnection service fees charged by significant operators are The allocation procedure may take up to 40 business days. RFs subject to tariff regulation. Service fees for certain public electronic are usually allocated for 10 years, but this term cannot exceed the term communication services and public post services are also subject of the relevant communications licence. The term may be extended an to state tariffs. The list of public electronic communication services unlimited number of times. RF permits are subject to a one-off fee and and public post services subject to state tariffs is approved by the annual payments, both depending on various factors (eg, the availability government. of RFs in the region, type of RF usage, number of services provided and type and quantity of installed equipment, etc). Structural or functional separation The above licensing and authorisation regime equally applies 5 Is there a legal basis for requiring structural or functional to fixed, mobile and satellite networks and services, and 2G, 3G and separation between an operator’s network and service 4G networks. The first tender concerning Long Term Evolution (LTE) activities? Has structural or functional separation been frequencies was held in October 2015. RF bands in the ranges of introduced or is it being contemplated? 1,710–1,785MHz and 1,805–1,880MHz have been allocated among major telecom operators for developing LTE standard networks. Significant operators must keep separate records of their revenues and In May 2021, the Russian government approved the use expenses in respect of different lines of business, different services of the 24,250–25,250MHz range for 5G and International Mobile and parts of networks used to render such services. The same rules Telecommunications-2020 network development. apply to telecom operators that are natural monopolies and universal Providing access to Wi-Fi in public spots is considered a commu- service operators. Minkomsvyaz approves the rules on the separation of nication (telematic) service and is subject to relevant licensing and accounts. The current rules were approved in 2006. authorisation regimes. Public Wi-Fi operators must ensure the identi- Russian competition laws also provide for forced separation as a fication of users of public Wi-Fi spots. Various means of identification last-resort measure that may be implemented by a court at the request can be used ranging from user IDs, bank card details, to the govern- of antitrust authorities in respect of a dominant market player that ment’s portal service login information and codes texted to users’ systematically abuses its dominant position. mobile phones.

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Universal service obligations and financing Also, Russian communications laws require that the terms and 6 Outline any universal service obligations. How is provision of conditions of contracts with subscribers must comply with the rules these services financed? of the provision of communications services adopted by the government. The government adopted rules of the provision of communication In Russia, phone connection services via payphones, multifunctional services that contain detailed regulations governing the rights and devices, phone boxes and similar devices and internet connection services obligations of service providers and subscribers of communications via access points and collective access points are viewed as universal services. There are separate regulations for different types of telephone communications services. Laws contain certain requirements applicable and radio communications services, broadcasting, telegraphy communi- to universal communication services. For example, phone-connection cations services, telematics services, postage and other services. devices must be evenly distributed to allow a user to reach the nearest device within an hour without the use of a vehicle; at least one internet Net neutrality access point for users with their own devices must be installed in every 9 Are there limits on an internet service provider’s freedom to community with a population of between 100 and 500 people. control or prioritise the type or source of data that it delivers? The government nominates the provider of universal communica- Are there any other specific regulations or guidelines on net tions services from the operators controlling significant market share of neutrality? the universal public telecommunications network in at least two-thirds of the constituent territories of the Russian Federation. In 2014, the govern- The net-neutrality principle is not formally recognised in Russian ment nominated Rostelecom as such a provider. Rostelecom renders communications laws. However, FAS has provided certain guidance universal telecommunication services based on a 10-year contract with relevant to this issue. In February 2016, FAS prepared a Basic Document the Federal Communications Agency. on the Net Neutrality that describes the measures for traffic manage- Service fees for universal communication services set by an operator ment in Russia. The document introduced the following tools, which, of universal communications service may not exceed the maximum rates FAS believes, can help maintain net neutrality: prescribed by FAS. Additional costs incurred by the operator of universal • unified traffic-control instruments; communications service are covered from the Universal Services • intolerance to any kind of technical or technological discrimination Reserve, which is funded by mandatory payments of public telecommu- of services and applications; nications network operators, penalties for delays in their payments and • a variety of tariffs and similar means of traffic management and other statutory sources. The current payment rate is 1.2 per cent of the telecom services quality control measures; and revenues of public telecommunications network operators. • equal opportunities for traffic operators.

Number allocation and portability Roskomnadzor may use mechanisms established by Federal Law No. 7 Describe the number allocation scheme and number 90-FZ of 1 May 2019 (the law on sovereign runet) to slow down the portability regime in your jurisdiction. access to the web resources, which contain prohibited information.

From 1 December 2013, mobile number portability across mobile Platform regulation networks of different operators within the one constituent territory of the 10 Is there specific legislation or regulation in place, and have Russian Federation became available for subscribers for a flat fee not there been any enforcement initiatives relating to digital exceeding 100 roubles. platforms? To change a mobile service operator, a subscriber must submit an application to the new operator to request the unilateral cancellation of Russian law has no special rules for digital platforms. General laws the contract with the current operator and the subsequent transfer of the governing the internet apply (the key law is Federal Law No. 149-FZ on mobile phone number to the new operator. Information, Informational Technologies and Protection of Information Following receipt of the subscriber’s application, the new operator of 27 July 2006 (the Information Law). These laws contain specific rules and the subscriber enter into a service contract and the new operator on social networks, information dissemination organisers, messenger files a request to a special database of transferred numbers to inform services, virtual private networks (VPNs) and film-streaming busi- the current operator about the transfer. The mobile phone number is nesses (online cinemas) and other similar matters. transferred to the new operator subject to the subscriber having paid all Other laws may apply as well. For example, in 2018, Russia service fees due to the current operator. introduced specific rules for e-commerce aggregators (ie, platforms In its application, the subscriber is entitled to designate a specific aggregating information on goods or services, by amendments to Law time and date from which the new operator should commence the provi- No. 2300-1 on Protection of Consumers’ Rights of 1 January 2019. The sion of services. The services may not commence earlier than eight days amendments impose certain obligations and liability on owners of from the date of execution of the service contract with the new operator e-commerce aggregators in connection with consumers buying goods for individuals and not earlier than 29 days for legal entities, or later than or services via e-commerce platforms. six months from the execution of the service contract. Further to this, Federal Law on Attracting Investments with the Usage of Investment Platforms (the Crowd Investing Law) of 2 August Customer terms and conditions 2019, in effect from January 2020, introduced the ‘investment platform’ 8 Are customer terms and conditions in the communications concept – an information system for entering into investment contracts sector subject to specific rules? with the use of information technologies and technical means. Further, FAS currently considers amending Federal Law No. 135 on The general rules of the Russian Civil Code and Russian consumer protec- Protection of Competition (the Competition Law) to introduce criteria for tion laws apply to communications services. Communications service the determination of digital platforms owners as dominant players. It is contracts with individuals are considered to be public contracts – service envisaged that these changes will contain definitions of ‘digital platform’ providers may not refuse to sign a contract with any willing individual and ‘network effects’. and must ensure equal treatment of all subscribers of the same category.

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Next-Generation-Access (NGA) networks computer attack, and to comply with established requirements for the 11 Are there specific regulatory obligations applicable to operation of technical facilities used to detect computer attacks). NGA networks? Is there a government financial scheme to Federal Law No. 90-FZ of 1 May 2019 (the law on sovereign promote basic broadband or NGA broadband penetration? runet), which introduced a set of amendments to the Federal Law on Communications and the Information Law, came into force on 1 The concept of ‘universal services’ was introduced to the Communications November 2019, and the provisions regarding the national domain- Law in 2005 and provided for the state support of measures aimed at name system and national cryptosecurity standards came into force in establishing ‘equal access for any person to telecom services’. This January 2021. included the installation of more than 100,000 public phone boxes (info The main purpose of the sovereign runet law is to ensure autono- mats and multi-function devices), public-access points and hotspots. mous operation of the Russian segment of the internet in case of an In 2014, the Communications Law introduced further measures in emergency, which will be declared by Roskomnadzor. Roskomnadzor, this regard. It provided for the state support of the maintenance of the via the specially created Centre for Monitoring and Control of Public existing public phone boxes and public-access points and the laying of Communication Networks, will take control over the internet if an more than 200,000 kilometres of fibre-optic communication lines. The emergency occurs. The Centre for Monitoring and Control of Public amended law also provided for the establishment of hotspots in settle- Communication Networks has the authority: ments of between 250 to 500 people and access to the internet at a • to collect information about network infrastructure and IP speed of at least 10Mbit/s without traffic limitations. addresses; Following the adoption of the Digital Economy Development • maintain the register of traffic-exchange points; and Programme in 2018, which includes plans to create 5G networks, in • in case of emergency, order the rerouting of the traffic. November 2020, the government approved the roadmap for the development of 5G networks, which provides for the expansion of 5G in The law also introduced certain duties on communications operators Russia between 2021 to 2024. and owners of technological networks to counter network threats such as rerouting data through domestic lines and installing specific hard- Data protection ware allowing Roskomnadzor to reroute or block the traffic directly. 12 Is there a specific data protection regime applicable to the In February 2021, the Russian President signed Federal Law No. communications sector? 19-FZ that introduced penalties of up to 6 million rubles for violating the applicable rules under the law on sovereign runet. Federal Law No. 152-FZ of 27 July 2006 on Personal Data (the PD Law) provides for the general rules on personal data processing, including Big data the rules applicable to data processing in the communications sector. 14 Is there specific legislation or regulation in place, and have As a general rule, personal data should be processed upon receipt of there been any enforcement initiatives in your jurisdiction, individuals’ explicit consents, unless one of the statutory exemptions addressing the legal challenges raised by big data? applies. The PD Law sets out general principles for the use of personal data including in the promotion of goods and services directly to poten- Russian law does not specifically regulate the collection and processing tial consumers, and an obligatory opt-in confirmation. These rules of big data. Data analytics is currently subject to the PD Law and other equally apply to the telecommunications sector, including the localisa- data protection regulations. There are several legislative initiatives in tion requirement. the big data area. When collecting personal data, including through the internet, a In February 2020, Minkomsvyaz published separate draft amend- data operator must ensure that the recording, systematisation, accu- ments to the Information Law. Under these amendments, big data is mulation, storage, adjustment (update and modification), extraction defined as the set of depersonalised data classified by group principles. of personal data of Russian Federation citizens occurs in databases The draft law proposes to introduce a register of big data operators and located in Russian Federation territory. provides that the principles, rights, and obligations of big data operators, procedures and means of big data processing will be established Cybersecurity by the government. The draft amendments have not been introduced to 13 Is there specific legislation or regulation in place concerning the State Duma yet. cybersecurity or network security in your jurisdiction? In 2021, the National Centre for Digital Economics announced the development of the Russian national standard corresponding with ISO/ The key statute for regulation of cybersecurity of information systems IEC TR 20547-1:2020 Information technology – Big data reference archi- in Russia is Federal Law No. 187-FZ on Security of Critical Information tecture – Part 1: Framework and application process. Infrastructure of the Russian Federation of 26 July 2017 (the CII Law). The CII Law is in effect from 1 January 2018. Data localisation The CII Law provides the framework for ensuring the security of 15 Are there any laws or regulations that require data to be the Russian critical information infrastructure (CII), including the func- stored locally in the jurisdiction? tioning of the state system for detecting, preventing and liquidating consequences of cyberattacks against information resources in Russia. Certain data must be stored locally in Russia. For example, under the The CII comprises IT systems and telecommunication networks oper- PD Law, personal data of Russian citizens must be primarily recorded, ating in spheres of healthcare, defence, transport, fuel, spacecraft, systematised, stored, updated and retrieved with the use of databases metallurgy, nuclear, financial sector and science that are owned or physically located in Russia. maintained by the Russian state authorities and legal entities, and the In December 2019, the liability for non-compliance with the relevant electronic communication networks. The CII Law imposes personal data localisation requirements was increased. The law intro- certain duties on the owners or maintainers of CII facilities (eg, to notify duced severe penalties such as fines for legal entities of up to 6 million the competent state authorities on computer incidents, to assist state rubles for a first-time offence, and up to 18 million rubles for a second- authorities in detecting, preventing and eliminating the consequences of time offence for non-compliance with the localisation requirement. www.lexology.com/gtdt 121 © Law Business Research 2021 Russia Morgan, Lewis & Bockius LLP

Also, the Communications Law requires that communication opera- • Federal Law No. 38-FZ On Advertising of 13 March 2006 (the tors store in Russia: Advertising Law). • up to three years: information about the facts of receipt, transmission, delivery and processing of voice information, text messages, The principal state authority responsible for developing and imple- images, sounds, video and other messages by telecommunications menting national policy and regulation for telecommunications, mass services users; and media, IT and postal services is the Ministry of Digital Development, • up to six months (but subject to special storage capacity rules): Communications and Mass Media (Minkomsvyaz) and its subordinate text messages, voice information, images, sounds, video and other government agency Federal Service for Supervision of Communications, messages of telecommunication services users. Information Technology and Mass Media (Roskomnadzor), which is responsible for the state control and supervision of compliance with The Information Law imposes similar data localisation obligations on Russian laws on mass media, telecommunications, and personal data information dissemination organisers and messengers. The draft law processing. purporting to introduce data localisation requirements on owners of technological networks holding autonomous system numbers is pending. Ownership restrictions 18 Do any foreign ownership restrictions apply to media Key trends and expected changes services? Is the ownership or control of broadcasters 16 Summarise the key emerging trends and hot topics in otherwise restricted? Are there any regulations in relation communications regulation in your jurisdiction. to the cross-ownership of media companies, including radio, television and newspapers? In 2017, Minkomsvyaz developed the Digital Economy programme following orders of the President and government of 5 December 2016. On 1 January 2016, foreign-ownership restrictions were introduced to The programme is aimed at the digital transformation of the Russian the Mass-Media Law, as follows: communications sector by 2024. It covers different aspects such as: • a foreign legal entity, foreign citizen or Russian company with legislative and regulatory spheres, staff and education, research and foreign participation is banned (along with certain other persons development, information infrastructure, information security, state and entities) from serving individually or jointly as the founder or governance, smart city and electronic healthcare. For example, as part participant of any mass-media organisation, or acting as the editor- of the programme, the government aims to implement 5G networks in-chief of such an organisation or as a broadcaster; and develop a plan for the allocation of 5G RFs. The Radio Frequencies • a foreign legal entity, foreign citizen or Russian company with more Commission intends to permit operators to use already allocated RFs than 20 per cent foreign participation (along with certain other used for 2G, 3G and 4G networks for testing and development of 5G. persons and entities) may not own, manage or control, directly or From 1 April 2021, Russian software must be preinstalled on indirectly more than 20 per cent of a shareholder or participant of certain consumer electronic devices offered for sale in Russia. These a founder, editor or broadcaster; and devices include smartphones, tablets, PCs, laptops and smart TVs. The • any other forms of control of foreign entities and individuals over a Russian government published the list of approved applications subject mass-media organisation are also prohibited. to the pre-installation requirement, which includes Russian-developed browser, search engine, mail agent, social networks, office suites, audio- These restrictions are vaguely drafted and subject to conflicting inter- visual services and others. pretations. For example, in January 2019, the Russian Federation Russia also considers imposing an obligation on telecom operators Constitutional Court ruled that certain parts of article 19.1 are not to grant free access to socially important websites. As part of the experi- constitutional and directed to amend the Mass-Media Law to remove the ment, Minkomsvyaz published the list of socially important resources in ambiguity. The subject matter of the amendments is to provide clarity March 2020 and introduced the draft amendment to the State Duma in on certain terms used in article 19.1 and to address how investors can December 2020. enjoy certain corporate rights within the permitted 20 per-cent limit. In March 2021, the draft amendments to article 19.1 passed the first MEDIA reading of the State Duma. Additional restrictions apply to certain strategic media companies. Regulatory and institutional structure Under the Foreign Strategic Investments Law, the following activities 17 Summarise the regulatory framework for the media sector in are considered strategic: your jurisdiction. • TV and radio broadcasting in territory covering 50 per cent or more of the Russian Federation’s population; The key law regulating the media sector in Russia is Law of the Russian • acting as an editor, publisher or founder of printed mass media if Federation No. 2124-1 on Mass Media of 27 December 1991 (the Mass- the aggregate annual circulation is not less than 15 million copies Media Law). for editions published two and more times a week, 2.5 million Specific content requirements for mass media can also be found in copies for editions published once a week, once in two or three other laws including: weeks, 700,000 copies for editions published once or twice a month • Federal Law No. 436-FZ on Protection of Children from Information and 300,000 copies for editions published once a quarter or less Harmful to Their Health and Development of 29 December 2010 frequently; and (the Child-Protection Law); • foreign investments in companies exercising the above strategic • Federal Law No. 15-FZ on Protection of Health Against Tobacco activities that lead to establishing control over such companies are Smoke and Consequences of Tobacco Consumption of 23 February subject to certain restrictions, including the requirement to obtain 2013 (the Anti-Tobacco Law); approval of the government commission. • Federal Law on Information, Information Technologies, and Information Protection, No. 149 of 27 July 2006 (the Separate foreign ownership restrictions apply to certain specific media Information Law); and services such as audiovisual service owners.

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Also, under Federal Law No. 160-FZ on Foreign Investments in the registered in Russia requires a permit from Roskomnadzor. The Russian Russian Federation of 9 July 1997 and the Foreign Strategic Investments advertising laws also have an exemption from the general advertising Law, the head of the government commission has the authority and ban, which applies to all pay-TV channels; such exemption is available discretion to order that any foreign investment concerning any Russian to cable channels with primarily local content. company (ie, not necessarily a strategic company) should be cleared by Further, in November 2017, the Information Law was amended the government commission. to extend to media organisations certain restrictive regulation on the Further, in November 2017, the Information Law was amended foreign agents that were initially designed to apply to non-profits who to extend to media organisations certain restrictive regulations on the receive financing from foreign sources and engage in political activity in foreign agents that were initially designed to apply to non-profits who Russia. In particular, foreign-agent mass media must include a special receive financing from foreign sources and engage in political activity in disclaimer in every publication or post identifying their status as foreign Russia. In particular, foreign agent mass media must include a special agents. Also, they must keep separate accounts for funds and property disclaimer in every publication or post identifying their status as foreign received from foreign sources, submit quarterly reports on the sources agents. Also, they must keep separate accounts for funds and property of financing to the Russian Ministry of Justice, and publish activity received from foreign sources, submit quarterly reports on the sources reports in Russia bii-annually. The Russian Ministry of Justice keeps the of financing to the Russian Ministry of Justice and publish activity register of foreign agent mass media, reports in Russia bi-annually. The Russian Ministry of Justice keeps the register of foreign agent mass media, Advertising 21 How is broadcast media advertising regulated? Is online Licensing requirements advertising subject to the same regulation? 19 What are the licensing requirements for broadcasting, including the fees payable and the timescale for the The principal law regulating broadcast media advertising is Federal Law necessary authorisations? No. 38-FZ on Advertising of 13 March 2016 (the Advertising Law). The Advertising Law contains certain restrictions and limitations for broad- In general, broadcasting using traditional technologies (free-to-air, cast media advertising. cable and satellite) usually involves obtaining the following permissions from state authorities: Restrictions for paid channels • a mass-media registration; From 1 January 2015, advertising on TV programmes or in broadcasts • a broadcasting licence; and on TV channels that are accessed exclusively on a paid basis or with • a communication-services licence (not required if the broad- the use of technical decoding devices are not permitted. The following caster has an agreement with a licensed communication-services channels are exempt from this restriction: provider). • Russian national must-carry free television channels; • TV channels broadcast in Russia by terrestrial transmission using Mass-media registration is granted by Roskomnadzor to a mass-media limited frequency resources; or founder within a month of filing the application. • TV channels transmitting not less than 75 per cent of local content. Broadcasting licences are granted by Roskomnadzor as well. Broadcasting licences are divided into two major types: Time limitations • a universal licence that can be granted to the editor of a TV or The general time limitations for advertising airtime are as follows: radio channel, and allows broadcasting in all media in all Russian • airtime devoted to advertising should not exceed 20 per cent territory; and of the overall airtime per hour and 15 per cent of the overall • a broadcasting licence granted to entities that are not editors of airtime per day; TV or radio channels, for broadcasting in specific media (eg, cable, • advertising should not exceed four minutes per occurrence; and terrestrial or satellite). In the case of free-to-air or satellite broad- • advertising may not be aired during religious programmes or casting, the applicant must also obtain the right to use a specific programmes of less than 15 minutes. broadcasting frequency. Each interruption of a programme or broadcasting by advertising As a rule, frequencies are allocated through a public tender by the should be made with advance notice. Federal Tender Commission for TV and Radio Broadcasting. Broadcasting licences are granted for 10 years. Restrictions on advertising for certain types of goods The state fee for the application of a broadcasting licence is The Advertising Law generally prohibits advertising of drugs, weapons, 7,500 rubles. The broadcasting licensing procedure takes up to 45 tobacco, tobacco goods, and smoking-related equipment and certain business days. other goods. The advertising of alcohol products is specifically prohibited for printed media, the internet and broadcasting on TV channels, Foreign programmes and local content requirements save for certain exceptions, including the advertising of beer and related 20 Are there any regulations concerning the broadcasting beverages during live sports broadcasts or records, and of Russian wine. of foreign-produced programmes? Do the rules require a There are also rules and restrictions applicable to the advertising minimum amount of local content? What types of media fall of certain other goods. For instance, the advertising of medicines and outside this regime? medical services, including methods of treatment, should contain warnings regarding contraindications, as well as the need to read Generally, the Mass-Media Law guarantees unrestricted access to the instructions and seek advice from specialists. These notices should be information and materials of foreign mass media to Russian citizens. broadcast for at least five seconds and should cover at least 7 per cent However, the distribution of foreign TV and radio channels (as well of the picture area. as other mass media) and content is permitted only upon registra- There is also special restriction of the advertising of certain tion of mass media in Russia. Distribution of foreign printed media not types of goods in children’s programming, such as the advertising of www.lexology.com/gtdt 123 © Law Business Research 2021 Russia Morgan, Lewis & Bockius LLP

alcoholic products, medicines and medical services, including methods Digital switchover of treatment, military products and weapons, risk-based games, bets, 24 When is the switchover from analogue to digital broadcasting and others. required or when did it occur? How will radio frequencies freed up by the switchover be reallocated? Must-carry obligations 22 Are there regulations specifying a basic package of The Russian switchover from analogue to digital broadcasting started in programmes that must be carried by operators’ broadcasting 2009. The switchover of 20 federal must-carry channels to digital broad- distribution networks? Is there a mechanism for financing the casting was completed in October 2019. costs of such obligations? There is no specific plan of reallocation of the radio frequencies freed up by the switchover. Under the existing regulation, the particular Under the Communications Law, each TV communication services oper- radio frequencies’ capacities for terrestrial and satellite broadcasting ator must broadcast must-carry channels to its subscribers for free. The can be allocated via tenders under Government Decree No. 25 of 26 list of must-carry channels includes: January 2012. Under Government Decree No. 336 of 2 July 2004, radio • all Russian TV and radio must-carry channels listed in Presidential frequencies’ bands may be reallocated by a decision of the Radio Decree No. 715 of 24 June 2009. Currently, the list includes 10 TV Frequencies Commission. If a band reallocation involves changing channels: Channel 1, Russia-1, Match TV, NTV, Peterburg-5 Channel, the band purpose from terrestrial broadcasting to another type of Russia-Kultura, Russia-24, Karusel, OTR and TV Center-Moscow; broadcasting, it will require the prior consent of the broadcasters of and three radio channels: Vesti FM, Mayak and Radio Rossii; must-carry channels as well as of the broadcasters that have air terres- • must-carry channels of the constituent territories of the Russian trial broadcasting licences for this band. Federation; • municipal must-carry channels; and Digital formats • TV channels that have obtained the right to carry out terrestrial 25 Does regulation restrict how broadcasters can use their broadcasting using positions in multiplexes. Currently, there are spectrum? 10 TV channels that have obtained the right to carry out terrestrial broadcasting using positions in multiplexes. Currently, there is no specific regulation restricting spectrum use by broadcasters (such as multi-channelling, high definition and data Regulation of new media content services), other than restrictions provided in the broadcasting and 23 Is new media content and its delivery regulated differently communication licences, licensing requirements and decisions on the from traditional broadcast media? How? allocation of RFs (as the case may be), or arising from the must-carry obligations. Russian law currently does not provide for a specific regulation applicable to new media content or online (internet) TV broadcasting. Media plurality Arguably, the existing Mass-Media Law definitions of a ‘TV channel’ and 26 Is there any process for assessing or regulating media a ‘TV programme’ are broad enough to apply to TV content broadcast plurality (or a similar concept) in your jurisdiction? May the online. However, as a matter of practice, in general, online broadcasting authorities require companies to take any steps as a result of is currently permitted without licence. such an assessment? The rules on content applicable to traditional broadcast media would apply to online broadcast in most instances. There are recent new There is no specific regulation or promotion of media plurality in Russia. laws related to different aspects of new media content. For example, on But the Mass-Media Law provides that mass-media organisations must 1 July 2017, the Information Law was amended to include a concept of not be restricted in Russia other than in cases provided by the Russian an ‘audiovisual service owner’ (AS owner). In essence, an audiovisual mass-media legislation. Generally speaking, subject to foreign owner- service is a website, webpage, IT system and or software that is used ship restrictions and other restrictions in the Mass-Media Law and other to form or organise internet distribution of a ‘collection of audiovisual laws and, in many instances, registration requirements, Russia allows works’ (eg, video-on-demand service providers). An AS owner must, mass media in any form. The Mass-Media Law also provides that the among other things, comply with the Mass-Media Law requirements search, production and distribution of information cannot be restricted and restrictions on the dissemination of information. The new regulation other than in cases provided by law (such cases include terrorist and also provides for foreign ownership restrictions concerning AS owners: extremist materials, propagation of violence and pornography, etc). foreign states, international organisations, foreign entities, Russian entities with more than 20 per cent foreign shareholding, foreign citizens, Key trends and expected changes Russian citizens with dual citizenship and their affiliates that operate 27 Provide a summary of key emerging trends and hot topics in international audiovisual services (ie, with more than 50 per cent of media regulation in your country. users located outside of Russia) are not allowed to directly or indirectly control more than 20 per cent of an AS owner. The three key trends are as follows. First, the emergence of new types In December 2020, Russian lawmakers proposed a draft law of media and internet services (online and electronic newspapers, expanding the foreign ownership restrictions. While the existing blogs, social media, messaging apps, aggregators and services) that fall regulation affects only international AS players, the proposed draft is outside of traditional regulation attract attention from the government. expected to prohibit any foreign ownership of more than 20 per cent of This results in new regulation affecting these new types of media and an AS owner. services. For example, following the 2017 adoption of the special regulation on virtual private networks, messengers and online cinemas, in 2018, Russia introduced special rules for e-commerce platforms that aggregate information from online shops and service providers. In March 2019, Russia changed its Civil Code to include digital rights, and further laws regulating activities in this field are pending.

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In August 2020, Minkomsvyaz initiated the public discussion of also regulates advertising of any kind. Specific powers of these state the draft law amending the Communications Law, which introduces bodies are outlined in the relevant regulations, which helps to avoid the definitions of the data processing centre. If adopted, this new law conflicting jurisdiction. will impose certain requirements on the owners and operators of data processing centres. Appeal procedure In April 2021, the Russian government introduced the draft law, 29 How can decisions of the regulators be challenged and on which, if adopted, will oblige the owners of technological networks what bases? holding autonomous system numbers to store the information about the facts of receipt, transmission, delivery and processing of voice, text, Generally speaking, a decision of the regulator may be challenged by images, sounds, video and other messages. complaining to a supervisory authority if such exists (administrative Second, Russia continues to strengthen governmental control proceedings) or to a court. in cyberspace to combat cybercrime. This resulted in the adoption For example, if a person believes that a decision or an action of the of Federal Law No. 187-FZ of 26 July 2017 on the Security of Critical regulator (eg, the imposition of fines or the cancellation of a licence) is Information Infrastructure of the Russian Federation, in effect from 1 illegal, groundless or violates its rights and legal interests, the claimant January 2018. Further, Federal Law No. 90-FZ of 1 May 2019 introduced may appeal to the relevant supervising authority of the regulator that a set of amendments to the Information Law, which are colloquially took such action or rendered such decision. For instance, the relevant known as the ‘sovereign runet law’ or the ‘law on the secured internet’. supervising authorities are as follows: These amendments allow the government to restrict access to the • for Roskomnadzor officials, the head of the Roskomnadzor depart- internet and to control internet traffic in emergencies. Since 1 January ment where such official works; 2018, messenger operators must run a mandatory identification of • for the head of a Roskomnadzor department, the head of users that could be done using subscribers’ phone numbers. Roskomnadzor; and Third, Russia continues to strengthen control over information • for the head of Roskomnadzor, Minkomsvyaz. posted online to prevent the dissemination of information it deems harmful or illegal. Typically, the steps, timing and other details for the appeal process are For example, under Federal Law No. 31 of 18 March 2019, online described in the particular regulations of the relevant authority. Terms media and communications services providers are required to prevent and time limits in administrative proceedings vary depending upon the the distribution of fake news. Fake news is broadly defined as any circumstances. A typical appeal through administrative proceedings unverified information that threatens someone’s life, health, property, takes between 15 days and a month and can be further appealed in court. public peace or security, or threatens to interfere or disrupt critical Alternatively, the claimant may appeal to a court. The appeal infrastructure, transport or public services, banks, communication process is governed by procedural legislation, for example, by the lines and facilities, power and industrial facilities. Owing to the covid-19 Russian Arbitrazh Procedural Code (if the decision relates to any entre- pandemic, Federal Law No. 99 of 1 April 2020 introduced separate preneurial activities), or the Russian Code of Administrative Judicial liability for the distribution of fake news related to the: Proceedings (if the decision concerns rights of individuals or non-profit • circumstances threatening life and safety of citizens; organisations). To appeal, a claim should be brought to court within • measures, which are taken to ensure the public safety; and three months of the claimant becoming aware of a violation of its rights. • methods of counter-acting these threatening circumstances. The appeal process might be multi-staged, and each stage has its own rules on timing. In total, the appeal process could take 10 months Federal Law No. 30-FZ of 18 March 2019 enabled Roskomnadzor to (or even more). In general, appeal in court follows a rather stringent require the deleting of information that shows disrespect to Russian procedure with protections (ie, there will be a formal hearing and the governmental authorities, state symbols, or Russian society and to person will be able to present evidence). The court appeal is a public block non-compliant resources. process and relevant information will be posted in public databases of In December 2020, the Russian Administrative Offences Code was the Russian court system. amended to introduce increased penalties for the violation of illegal content blocking requirement of up to 20 per cent of the violating Competition law developments company’s annual income. 30 Describe the main competition law trends and key merger and antitrust decisions in the communications and media REGULATORY AGENCIES AND COMPETITION LAW sectors in your jurisdiction over the past year.

Regulatory agencies From 1 April 2021, manufacturers of certain consumer electronic 28 Which body or bodies regulate the communications and devices offered for sale in Russia are required to preinstall Russian media sectors? Is the communications regulator separate software. In November and December 2020, the Russian government from the broadcasting or antitrust regulator? Are there approved lists of devices and Russian software that are subject to the mechanisms to avoid conflicting jurisdiction? Is there a preinstallation requirement. specific mechanism to ensure the consistent application of In 2019, FAS presented a new draft law to amend the Competition competition and sectoral regulation? Law, the ‘fifth antimonopoly package’, as a response to the digitalisation of the economy. Most likely, the draft will be changed significantly. The key state bodies regulating the communications and media The current draft proposes the need to impose specific criteria to sectors are the Ministry of Digital Development, Communications and determine whether an owner of a digital platform (ie, a resource that is Mass Media (Minkomsvyaz) and the Federal Service for Supervision used to organise and provide interaction between sellers and buyers) of Communications, Information Technology and Mass Media has a dominant market position. Among other things, it suggests the (Roskomnadzor). Roskomnadzor has controlling and supervisory application of the network effects test, and the digital platform owner powers both in the communications and broadcasting spheres. The anti- may be viewed as dominant if the network effect of its platform allows trust regulator in Russia is the Federal Antimonopoly Service (FAS). FAS for a certain influence over the market. The ‘network effect’ is defined www.lexology.com/gtdt 125 © Law Business Research 2021 Russia Morgan, Lewis & Bockius LLP

as the dependence of the consumer value of goods on the number of consumers of the same group (direct networks effect) or change in the consumer value of goods for one group of consumers when the number of consumers in another group decreases or increases (indirect networks effect). An exception is made for digital platforms with a revenue of less than 400 million rubles in the past calendar year. In February 2021, the Russian Association of E-commerce Companies requested FAS to extend the proposed regulations to affect search engines, social networks and messengers. The draft law is yet to Anastasia Dergacheva [email protected] be introduced to the State Duma. Ksenia Andreeva Coronavirus [email protected] 31 What emergency legislation, relief programmes and other Anastasia Kiseleva initiatives specific to your practice area has your state [email protected] implemented to address the pandemic? Have any existing Kamil Sitdikov government programmes, laws or regulations been amended [email protected] to address these concerns? What best practices are advisable for clients? Alena Neskoromyuk [email protected] Reportedly, the Russian government considers changing the regulations of the data storage requirements imposed by the Yarovaya Law Legend Business Center on traditional telecommunication operators and operators of various Tsvetnoy Bulvar, 2 internet communication platforms such as messengers, email services, Moscow 127051 chats, forums and others. Namely, the Russian government aims to Russia postpone the obligation to increase the volume of storage capacities Tel: +7 495 212 2500 maintained by the regulated entities, as well as introduce other support Fax: +7 495 212 2400 measures for the telecom operators. www.morganlewis.com

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COMMUNICATIONS POLICY across the entire telecoms industry, although the IMDA is currently reviewing and developing a converged competition code to govern Regulatory and institutional structure competition and market-related matters in both the telecoms and media 1 Summarise the regulatory framework for the communications markets, which will supersede the TCC when it comes into effect. sector. Do any foreign ownership restrictions apply to At present, the Telecoms Act does not apply to the licensing of any communications services? broadcasting service or any broadcasting apparatus that is already subject to regulation under the Broadcasting Act (Cap. 28). Regulatory framework The Info-communications Media Development Authority (IMDA) is the Foreign ownership restrictions converged regulator for the info-communications and media sectors Since 1 April 2000, no direct or indirect foreign equity limits have applied and is responsible for the development, promotion and regulation of to telecoms licensees. However, other than in exceptional circumstances, the info-communications industry, which includes both the telecoms the IMDA’s current practice is to issue facilities-based telecoms licences and IT sectors. The IMDA is under the direct authority of the Ministry of only to companies incorporated in Singapore, which can be wholly owned Communications and Information (MCI). by a foreign entity. In the case of services-based licences, the IMDA At present, the telecoms and media sectors are governed by sepa- would also issue licences to foreign companies with a locally registered rate regulatory frameworks. branch. Merger and acquisition control regulations exist under the TCC. The telecoms sector is regulated by the IMDA under the Telecommunications Act (Cap. 323) (the Telecoms Act) and the Info- Authorisation/licensing regime communications Media Development Authority Act 2016 (the IMDA Act). 2 Describe the authorisation or licensing regime. ‘Telecommunications’ is defined very broadly under the Telecoms Act as: Licensing framework All persons operating and providing telecoms systems and services in [A] transmission, emission or reception of signs, signals, writing, Singapore must be licensed under section 5 of the Telecoms Act. The images, sounds or intelligence of any nature by wire, radio, optical IMDA categorises licences for the operation and provision of telecoms or other electro-magnetic systems whether or not such signs, systems and services into licences for either facilities-based operators signals, writing, images, sounds or intelligence have been subjected (FBOs) or services-based operators (SBOs), and where RF spectrum is to a rearrangement, computation or other processes by any means required for the provision of wireless services, additional licensing is in the course of their transmission, emission or reception. required under the Radio-Communications Regulations.

The Telecoms Act is the primary legislation governing the telecoms FBO licence industry in Singapore. It sets out the broad licensing and regulatory A person intending to deploy telecoms infrastructure (generally taken to framework for the telecoms sector. Specific issues are dealt with through refer to any transmission facility) to provide telecoms services to other regulations, codes of practice, standards of performance, directions and telecoms licensees or end users must obtain an FBO licence. The IMDA advisory guidelines issued by the IMDA, pursuant to its powers under the generally adopts a technology-neutral approach towards the licensing Telecoms Act. of telecoms infrastructure. The configuration of the systems deployed The Telecoms Act itself does not make a distinction between fixed, and the technology platform (wireless or wired) adopted will be left mobile and satellite services. This is consistent with the technology- to the choice of the licensee, subject to spectrum and other physical neutral approach that the IMDA has taken in regulating the industry. There constraints. are, however, licensing and regulatory requirements that are service- An FBO licence is on a higher hierarchical level than an SBO licence. specific. For instance, the Telecommunications (Radio-Communications) As such, an FBO licensee does not need an SBO licence if it wishes to Regulations (Radio-Communications Regulations) regulate the licensing provide services that on their own would have required an SBO licence. process for radio frequency (RF) spectrum, the use of RF spectrum and The converse, however, does not apply. An SBO licensee that wishes to the operation of radio stations and networks. This set of regulations deploy telecoms infrastructure in the provision of telecoms services applies primarily to mobile services. must apply for an FBO licence. The FBO licence will then replace the Other regulations cover specific issues pertaining to fixed, SBO licence. mobile and satellite services. Examples of such regulations are the Although the general conditions of an FBO licence are standard- Telecommunications (Class Licence) Regulations, the Telecommunications ised across all FBO licensees, additional specific conditions may apply to (Dealers) Regulations and the Telecom Competition Code 2012 (TCC). The each individual FBO licensee depending on the services that the licensee TCC presently regulates competition, interconnection and market access may provide. www.lexology.com/gtdt 127 © Law Business Research 2021 Singapore Drew & Napier LLC

The following are some telecoms systems and services that may Telecoms services that require SBO (individual) licensing include, require an FBO licence: without limitation: • any terrestrial telecoms infrastructure for the carriage of telecoms • international simple resale; or broadcasting traffic (be it cross-border or local traffic; network • resale of local leased fixed-line connectivity services; coverage may be nationwide or limited to selected local geographic • public internet access services; broadcast), including but not limited to: • internet exchange services; • submarine cables (including the establishment of frontier • virtual private network services; stations, backhaul and sale of indefeasible rights of use); • managed data network services; • satellite international gateways; and • mobile virtual network operation; • domestic telecoms networks (including core backbone and • live audio-text services; local access networks); • internet protocol (IP) telephony services; • public switched telephone services; • satellite mobile telephone or data services; • public switched Integrated Services Digital Network services; • mobile communications on aircraft; • leased circuit services; • voice and data services with masking of calling line identity; • public radio communication services; • machine-to-machine services; • public cellular mobile telephone services; • white space geolocation database services; and • public trunked radio services; • prepaid services for other telecoms services, such as: • public mobile data services; • callback and call re-origination services; • terrestrial telecommunication network for broadcasting • internet-based voice and data services; purposes only; and • international calling card (ICC) services; • satellite uplink or downlink for broadcasting purposes. • resale of public switched telecoms services; • store-and-retrieve value-added network services; and FBO licences Annual fees and duration • store-and-forward value-added network services. Licence duration: 15 years, renewable for a further period as the IMDA thinks fit. Telecoms services that require only an SBO (class) licence include, Annual fee: without limitation: • first S$50 million in annual gross FBOs turnover (AGTO): S$80,000; • call-back and call re-origination services; • next S$50 million–S$100 million in • internet-based voice and data services; AGTO: 0.8 per cent of incremental AGTO; • ICC services; • above S$100 million in AGTO: 1 per cent • resale of public switched telecoms services; of incremental AGTO. • store-and-retrieve value-added network services; Licence duration: 20 years, renewable for a • store-and-forward value-added network services; further period as the IMDA thinks fit. • audio-text services; and Annual fee: FBO designated as public • first S$50 million in AGTO: S$200,000; • public chain payphone services. telecoms licensee • next S$50 million–S$100 million in AGTO: 0.8 per cent of incremental AGTO; Certain services, such as audio-text and internet access services, are • above S$100 million in AGTO: 1 per cent subject to concurrent telecoms and media licensing requirements. In of incremental AGTO . this respect, audio-text and internet access services are also deemed to Licence duration: 10 years, renewable for a be class-licensed under the Broadcasting (Class Licence) Notification. further period as the IMDA thinks fit. Public mobile data Annual fee: SBO (individual) licence services • first S$50 million in AGTO: S$80,000; Public trunked radio • next S$50 million–S$100 million in Annual fee: services AGTO: 0.8 per cent of incremental AGTO; • first S$50 million in AGTO: S$4,000; • above S$100 million in AGTO: 1 per cent • next S$50 million to S$100 of incremental AGTO. SBO (individual) million in AGTO: 0.5 per cent of incremental AGTO; Terrestrial telecoms • above S$100 million in AGTO: 0.8 network for broadcasting Licence duration: 10 years, renewable per cent of incremental AGTO. purposes only every 5 years. Satellite uplink/downlink Annual fee: S$5,000 Live audio-text services only S$200 every 5 years for broadcasting purposes SBO (class) licence Resale of public switched SBO licence telecommunication services, public SBO licences are granted to operators that do not intend to deploy chain payphone services, and store- No registration fee telecoms infrastructure. Such licensees may instead lease telecoms and-retrieve value-added network network elements (such as transmission capacity and switching services (without the use of leased circuits) services) from FBO licensees to provide telecoms services or resell All other categories of SBO (class) the telecoms services of other telecoms licensees. SBO services can S$200 (one-time payment) licences be individually licensed or class-licensed. Class licensing is a licensing scheme where the standard terms and conditions that apply to the category of licences are published in an official gazette for compliance. Licensing – radio frequency Operators providing the services within the scope of the class licence Pursuant to its exclusive privilege under the Telecoms Act, the IMDA will be deemed to have read and agreed to the terms and conditions of can determine how the RF spectrum is allocated. The IMDA can the class licence. Generally, operators leasing international transmis- also make decisions on the assignment of unused radio spectrum. sion capacity to provide telecoms services will be licensed individually. Specifically, the Radio-Communications Regulations give the IMDA the

128 Telecoms & Media 2021 © Law Business Research 2021 Drew & Napier LLC Singapore right to prepare and publish radio spectrum plans and RF band plans. Provision of public Wi-Fi services The Radio Spectrum Master Plan is a document prepared by the IMDA Operators providing public Wi-Fi services may require a telecom licence pursuant to such statutory right and it serves to inform the industry granted by the IMDA, as well as a broadcasting class licence. However, and interested parties on the allocation and availability of spectrum, commercial establishments that are open to the public and that merely technological trends in the use of spectrum and the IMDA’s policy provide Wi-Fi to customers within their own premises for purposes concerning spectrum allocation and reallocation for public communica- incidental to their primary business may be exempted from telecom tion networks. At the time of writing, the Radio Spectrum Master Plan licensing requirements. is in the process of being updated by the IMDA, and the updated version In 2006, the Singapore government launched the Wireless@SG has yet to be published. The IMDA is also empowered under the Radio- programme, in partnership with private sector operators, to deploy Communications Regulations to vary or revoke any radio spectrum plan wireless hotspots in public areas in Singapore to provide high-speed or RF band plan, in whole or in part. wireless broadband. The Wireless@SG programme aims to promote RFs required for the provision of 2G, 3G and 4G mobile services, a wireless broadband lifestyle among citizens. At present, the four as well as wireless broadband services, have been granted as spec- licensed Wireless@SG operators are Singtel, StarHub, M1 and TPG. trum rights through an auction process. RFs required for the operation Businesses, venue owners or tenants that wish to provide free Wi-Fi of a satellite are generally allocated administratively or assigned by to their premises may enter into commercial agreements with the the IMDA as part of the satellite licence. The Radio-Communications Wireless@SG operators for this purpose. Regulations also regulate the installation and maintenance of radio communications stations or networks in Singapore. Flexibility in spectrum use Regarding the permitted use of licensed radio spectrum, the 3 Do spectrum licences generally specify the permitted use general powers of section 5A(8) of the Telecoms Act and regulation or is permitted use (fully or partly) unrestricted? Is licensed 10(1)(i) of the Radio-Communications Regulations give the IMDA the spectrum tradable or assignable? discretion to direct the grantee concerning its use of the spectrum right. Additionally, the grantee may be restricted in its use of equipment within The IMDA manages the allocation and usage of spectrum for various the allocated RF spectrum. For example, no station fitted in an aircraft services, including public mobile, private land mobile, terrestrial shall be operated or used while such aircraft is at rest on land or water fixed and broadcasting services. As such, spectrum licences gener- in Singapore, barring certain exceptional circumstances as stated in ally specify that licensees can only use the assigned spectrum for the regulation 36 of the Radio-Communications Regulations. specified purpose. Conditions requiring the network to be operated on a non-interference and unprotected basis, and limiting the operation to Provision of publicly available telephone services specific geographical locations, may also be imposed. Since 1 April 2000, subject to the IMDA’s licensing requirements, any The IMDA may also permit the existing assigned spectrum to be person may apply to the IMDA for a licence to provide telecoms services used for new purposes if there are grounds to do so. For example, in to the public. There are no special conditions imposed by the IMDA for December 2014, the IMDA decided to allow 3G spectrum rights holders to such services. A holder of an FBO licence may, however, depending on deploy 4G and international mobile telecommunication (IMT)-advanced the scope and requirements of its operations, apply to the IMDA to be services using the 3G bands, subject to the following conditions: designated as a public telecommunication licensee (PTL) under section • 3G spectrum rights holders who wish to deploy 4G and 6 of the Telecoms Act. A PTL is accorded certain statutory powers under IMT-Advanced systems and services using the 3G bands are the Telecoms Act to facilitate the deployment of telecoms infrastructure, required to seek the IMDA’s prior approval; including the power to enter state and private property to lay telecoms • 3G spectrum rights holders must ensure there is no degradation infrastructure. The IMDA will grant such applications only if the FBO of existing services; licensee has committed to substantial telecoms infrastructure invest- • 3G spectrum rights holders must take measures to prevent inter- ment and roll-out to offer services to a significant proportion of the ference to any IMDA-authorised networks; and population within a reasonable time. At present, four licensees have • the IMDA reserves the right to impose quality of service require- been designated as PTLs (namely, NetLink NBN Management Pte Ltd ments on the 4G and IMT-Advanced systems and services, as well (as trustee-manager of NetLink NBN Trust) and NetLink Management as other measures to protect consumer interests. Pte Ltd (as trustee of NetLink Trust) as joint licensees, Singtel, StarHub and StarHub Cable Vision). The IMDA also reserves the right to impose More recently, in August 2020, the IMDA also allowed mobile network basic service obligations on a PTL. operators to ride on existing 4G networks to deploy 5G Non-Standalone The IMDA may modify the conditions of a telecoms licence granted networks as part of trials to allow consumers to enjoy partial 5G expe- under section 5 of the Telecoms Act. The procedure to be followed is set riences in the short-term, with faster mobile speeds on 5G-enabled out in section 7 of the Telecoms Act, which prescribes that, in the case of devices as a key feature. a PTL licensee, the IMDA first has to give notice to the PTL licensee of the Licensed RF granted under a spectrum right may be traded and proposed modifications to the licence, including whether compensation shared, subject to the IMDA’s prior approval and any restrictions and is payable. Before finalising any direction to implement the licence modi- conditions specified by the IMDA. At present, the IMDA has not issued fications, the IMDA is also required to give PTL licensees at least 28 days any specific regulations on the trading and sharing of RF, aside from to make written representations on the proposed modifications. In the general conditions stated in the Radio-Communications Regulations. case of a non-PTL licensee, the Telecoms Act does not set out the proce- Conditions on trading and sharing of RF may also be imposed via the dure to be followed concerning the modification of the licence. Instead, licences or relevant spectrum rights. the modification procedure of a non-PTL licence is typically set out in the relevant licence. Under the terms of their licences, telecoms licence holders may not assign, transfer, deal with or otherwise dispose of the whole or any part of the rights, privileges, duties or obligations under the licence without obtaining the prior written approval of the IMDA.

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Ex-ante regulatory obligations Briefly, detailed segment reporting involves separate reporting 4 Which communications markets and segments are subject to of key service segments and certain individual retail services. The ex-ante regulation? What remedies may be imposed? requirements include a specified cost allocation process and prescribed allocation methodologies for certain cost and revenue items. Reports Ex-ante regulations are primarily applied to licensees that are classified include both income statements and mean capital employed statements. as ‘dominant licensees’ under the TCC. Under section 2.2.1 of the TCC, a In contrast, simplified segment reporting requires less disaggregation licensee will be classified as ‘dominant’ if it is licensed to operate facili- of operations and a less rigorous cost allocation process. Only income ties that are sufficiently costly or difficult to replicate such that requiring statement reporting is required. new entrants to do so would create a significant barrier to rapid and successful entry into the telecommunication market in Singapore by an Next-generation nationwide broadband network efficient competitor; or if it has the ability to exercise significant market To ensure effective open access of the NGNBN infrastructure for down- power in any market in Singapore in which it provides telecommunica- stream operators, the IMDA has put in place structural separation and tion services. operational separation requirements on the network and operating In this regard, dominant licensees are subject to a range of ex-ante companies. obligations under the TCC, such as: • accounting separation requirements; Merger control • obligations to file tariffs with the IMDA for approval; Under Part VA of the Telecoms Act, all designated telecommunication • to provide unbundled services; and licensees (DTLs), designated business trusts (DBTs) and designated • to allow resale of end-user services by any licensee. trusts (DTs) are required to comply with merger control requirements. Where a transaction meets the specified pre-merger filing thresholds, Dominant licensees may also be required to offer certain interconnection generally, where the transaction would result in a party and its associ- and access-related services on terms that are pre-approved by the IMDA, ates becoming either a 12 per cent controller (ie, holding 12 per cent by way of a standardised reference interconnection offer (RIO). or more) or a 30 per cent controller (ie, holding 30 per cent or more) of the ownership or voting power in a DTL, DBT or DT, the IMDA’s prior Tariffing approval must be sought for the transaction. Also, the IMDA must be Unless exempted by the IMDA, dominant licensees must file tariffs for notified if a transaction would result in a person holding 5 per cent or any telecommunications service they intend to offer (including any offer more but less than 12 per cent of the ownership or voting power in a on a trial basis) with the IMDA and obtain the IMDA’s prior approval DTL, DBT or DT. before offering the service. The proposed tariff filing must include: • certain specified information, including a description of the service; Infrastructure sharing • the relevant prices, terms and conditions; Under certain circumstances, the IMDA may require an FBO licensee • any discounts or special considerations that will be offered; and (which may not be a dominant licensee) to ‘share’ its infrastructure • the minimum period for which the service will be available. with other licensees. As provided under section 7 of the TCC, the IMDA may require sharing of any infrastructure that it determines is ‘critical The IMDA will assess whether the proposed tariff is just and reasonable support infrastructure’, or where the IMDA concludes that sharing would under the principles in the TCC. be in the public interest, in accordance with the principles in the TCC.

Interconnection with dominant licensees Structural or functional separation If required by the IMDA, dominant licensees must also publish RIOs, 5 Is there a legal basis for requiring structural or functional under which they have to offer interconnection and access-related separation between an operator’s network and service services on prices, terms and conditions that are pre-approved by the activities? Has structural or functional separation been IMDA. A downstream operator that meets the relevant criteria may then introduced or is it being contemplated? request services from the dominant licensee under the terms of its RIO. Presently, Singtel (which is the incumbent fixed-line network oper- Generally, the IMDA does not require structural or functional separa- ator and also operates several telecoms facilities such as submarine tion between an operator’s network and service activities in Singapore. cable landing stations) and NetLink Trust (whose assets include central However, concerning the NGNBN industry, the IMDA has, with a view to offices, ducts and manholes) have been required to offer RIOs pursuant ensuring effective open access for downstream operators, instituted a to the TCC. multilayered industry structure consisting of: In the context of the next-generation nationwide broadband network • the network company (NetCo); (NGNBN), the IMDA has also imposed similar obligations on the appointed • several operating companies (OpCos) including the network and operating companies to make available certain mandated appointed OpCo; and services to qualifying persons under the terms of standardised intercon- • numerous retail service providers. nection offers (ICOs). At the first layer, the NetCo appointed by the IMDA is responsible for Accounting separation building and operating the passive infrastructure, which includes the Dominant licensees are subject to the IMDA’s Accounting Separation dark fibre network. OpenNet Pte Ltd was the initial NetCo appointed by Guidelines, which provide for two levels of accounting separation: detailed the IMDA. The assets and operations of OpenNet have since been taken segment reporting and simplified segment reporting. The accounting over by NetLink Trust (acting through its trustee, NetLink Management separation requirements are intended to provide the IMDA with informa- Pte Ltd), following NetLink Trust’s acquisition of OpenNet effective 1 tion to monitor cross-subsidisation by dominant FBO licensees, as well October 2014. In July 2017, 100 per cent of the units in NetLink Trust as to ensure that services provided internally by dominant FBO licensees were acquired by NetLink NBN Trust (acting through its trustee- to their downstream operators or affiliates are provided on similar terms manager, NetLink NBN Management Pte Ltd). Under the conditions of to equivalent services provided to other unrelated licensees. the FBO licence held jointly by NetLink NBN Management Pte Ltd (as

130 Telecoms & Media 2021 © Law Business Research 2021 Drew & Napier LLC Singapore trustee-manager of NetLink NBN Trust) and NetLink Management Pte public switched telephone network (PSTN), the radio network, user- Ltd (as trustee of NetLink Trust), the NetCo is required to ensure struc- centric data only (UCDO) and the internet or other IP-based networks; tural separation, which involves, among other things, ensuring that: and describes the assignment of numbers to international services, • it has no effective control over any other telecoms licensee or trunk service, emergency services and special services such as voice broadcasting licensee; mail and intelligent network (IN) services. There is only one numbering • it is not under the effective control of any other telecoms licensee area in Singapore and area or trunk codes are not used. The PSTN, radio or broadcasting licensee; and network, UCDO and IP telephony share the same numbering plan – a • it is not under the effective control of the same controlling entity uniform eight-digit numbering plan. as any other telecoms licensee or broadcasting licensee (the ‘no Numbers are allocated to various service categories according to effective control’ requirements). the first digit: • ‘0’ for international services; These requirements are intended to ensure that the NetCo and its • ‘1’ for special services, including calls for operator assistance, downstream operators are separate entities with fully autonomous service enquiry, machine-to-machine, internet dial-up, voice infor- decision-making considerations and that they do not have control over mation, IN services and access code international direct dial type each other’s management and major operating decisions. of services; At the second layer, Nucleus Connect Pte Ltd (Nucleus Connect), • ‘3’ for IP Telephony and UCDO services; the appointed OpCo, is responsible for building and operating the active • ‘6’ for PSTN and IP Telephony services; infrastructure, comprising switches and transmission equipment, to • ‘8’ and ‘9’ for eight-digit Radio Network numbers; and provide wholesale network services. While Nucleus Connect may be • ‘99’ for three-digit emergency services. owned by its downstream operating units, it is nevertheless subject to a range of detailed operational separation requirements under its Number portability across mobile networks and fixed-line services is FBO licence conditions. The operational separation requirements are obligatory. Fixed-line and mobile telephony operators are required to intended to ensure, among other things, that: allow consumers to retain full use of their existing phone numbers • downstream operators are treated in a non-discriminatory manner; when switching service providers. Also, IP telephony operators utilising • Nucleus Connect independently formulates and makes its own level ‘6’ numbers (ie, Singapore telephone numbers beginning with ‘6’) commercial decisions; and are subject to the same number portability requirements as fixed-line • it operates at arm’s length from affiliated operators. operators. Syniverse Technologies is the centralised database administrator appointed to operate the centralised number portability database Section 69C of the Telecoms Act also empowers the Minister for system, starting with the launch of full mobile number portability in Communications and Information (the Minister), if certain conditions June 2008. The IMDA has published a document titled the Fixed Number are met and in the public interest, to issue a separation order requiring Portability Guidelines to set out the technical approach to fixed number the transfer of a telecom licensee’s business or assets to a separate or portability by FBO licensees offering a fixed-line voice service. independent entity. Customer terms and conditions Universal service obligations and financing 8 Are customer terms and conditions in the communications 6 Outline any universal service obligations. How is provision of sector subject to specific rules? these services financed? Retail tariffs filed by dominant licensees for approval with the IMDA Generally, universal service obligations (USOs) are applied by the IMDA must include information relating to the customer terms and conditions. only to PTLs pursuant to the conditions of their licence. For example, Section 3 of the TCC also sets out several consumer protection- Singtel, the incumbent telecoms operator, is required under its licence related provisions with which all FBO licensees and SBO licensees must to provide basic telephone services to any person in Singapore who comply. These include provisions relating to: requests such service. In respect of the NGNBN, which is intended to • minimum quality of service standards (and disclosure to end users deliver high-speed broadband access throughout Singapore, the IMDA of any lower standards agreed to); has imposed USOs on both the appointed NetCo and OpCo following • disclosure of prices, terms and conditions (including for services the creation of the NGNBN. The NetCo’s USO took effect from 1 January provided on a free trial basis); 2013. The NetCo’s USO obliges it to fulfil all requests to provide its fibre • restrictions on service termination; and services to all locations in Singapore. Correspondingly, the OpCo must • prohibition against charging for unsolicited telecoms services. meet all reasonable requests by any operating company or downstream retail service providers for access to a basic set of wholesale services Section 3 of the TCC also includes several mandatory contractual provi- offered under its standard ICO. sions that must be included in all FBO licensees’ and SBO licensees’ Compliance with USOs is not financed by a statutorily created fund end-user service agreements (ie, service contracts with business or (such as universal service funds in other jurisdictions) or contributions residential subscribers). These include provisions relating to: from industry. • billing cycles; • the prices, terms and conditions upon which service will be Number allocation and portability provided; procedures for disputing charges; and 7 Describe the number allocation scheme and number • termination or suspension of service. portability regime in your jurisdiction. The IMDA also has the right under the FBO and SBO licences to require The IMDA administers the number allocation scheme in Singapore licensees to file their schemes of service, including non-price terms and under its National Numbering Plan. Among other things, the National conditions for the provision of services, with the IMDA before the launch Numbering Plan sets out rules and guidelines for the use and assign- or announcement of such services. ment of numbers to telecommunication services delivered over the www.lexology.com/gtdt 131 © Law Business Research 2021 Singapore Drew & Napier LLC

Net neutrality regulatory framework. In particular, where the platform operator 9 Are there limits on an internet service provider’s freedom to may be considered to be an internet content provider, it may be control or prioritise the type or source of data that it delivers? deemed to be subject to a broadcasting class licence; Are there any other specific regulations or guidelines on net • to the extent that the computer or computer system behind the neutrality? digital platform has been designated as critical information infrastructure (CII) in Singapore, owners of such computers or The IMDA’s policy framework on net neutrality is set out in a policy computer systems are subject to cybersecurity obligations under paper dated 16 June 2011, which sets out five principles representing the Cybersecurity Act 2018 (the Cybersecurity Act); its approach towards net neutrality that internet service providers • to the extent that a digital platform collects, uses or discloses (ISPs) and telecoms network operators are required to adhere to: personal data relating to individuals, it may be subject to data • they must not block legitimate internet content or impose discrimi- protection obligations under the Personal Data Protection Act natory practices, restrictions, charges or other measures that 2012 (PDPA); would effectively render any legitimate internet content inacces- • to the extent that digital platforms are regarded as internet sible or unusable; intermediaries (eg, social networks, search engines, content • they must comply with competition and interconnection rules aggregators, internet-based messaging services and video-sharing in the TCC; services), they may be subject to directions and obligations under • they must comply with the IMDA’s information transparency the Protection from Online Falsehoods and Manipulation Act 2019 requirement and disclose to end users their network management (POFMA); and practices and typical internet broadband download speeds; • competition issues involving a digital platform may be governed by • ISPs must meet the minimum broadband quality of service stand- the general competition law as established under the Competition ards prescribed by the IMDA. Reasonable network management Act that is administered by the Competition and Consumer practices are allowed, provided that the minimum internet broad- Commission of Singapore (CCCS), or sector-specific regulatory band quality of service standards are adhered to and that such frameworks as administered by the respective regulatory authori- practices will not render any legitimate internet content effectively ties. For example, competition issues that impact the telecoms inaccessible or unusable; and and media sector may fall within the purview of the IMDA. The • they are allowed to offer niche or differentiated services that meet Competition Act provides that it does not apply insofar as another the IMDA’s information transparency, minimum quality of service regulatory authority (other than the CCCS) has jurisdiction in a and fair competition requirements. particular competition matter.

In particular, the IMDA recognised that to promote the development of In respect of enforcement activity, the POFMA Office has issued direc- online services, ISPs and network operators must be given the flexibility tions and orders on several occasions to Facebook to publish correction to manage their networks or differentiate their service offerings to meet notices on the Facebook posts of users who had published false state- the needs of changing customer demands or niche user groups. At the ments, as well as to disable access for Singapore users to Facebook same time, such flexibility cannot result in discriminatory practices that pages which had repeatedly conveyed online falsehoods and did not render legitimate internet content effectively inaccessible or unusable. comply with any of the POFMA Directions that had been served on the In this respect, the IMDA has indicated in its decision that it intends to owners of such pages. deal with any complaints on a case-by-case basis. In connection with the above, the IMDA requires residential fixed Next-Generation-Access (NGA) networks broadband internet access service providers to publish, on their 11 Are there specific regulatory obligations applicable to websites, information about their respective network management poli- NGA networks? Is there a government financial scheme to cies (including whether traffic shaping is implemented). promote basic broadband or NGA broadband penetration? While there are no express laws or regulations that prevent zero-rating of data transmission by certain services or applications or At present, NGNBN entities are regulated under existing telecommunica- bandwidth throttling per se, ISPs would nevertheless need to comply tion and media legislation, and through contractual obligations between with the general principles set out under the IMDA’s framework for net them and the IMDA. In particular, the respective ICOs of NetLink Trust neutrality. and Nucleus Connect, in fulfilment of their contractual obligation under their request-for-proposal bid commitment to the IMDA, set out the Platform regulation prices, terms and conditions upon which they would provide certain 10 Is there specific legislation or regulation in place, and have mandated NGNBN services. there been any enforcement initiatives relating to digital Also, the IMDA has released specific regulations providing platforms? for licensing and regulatory frameworks in 2009 – namely the NetCo Interconnection Code (updated in April 2020) and the OpCo At present, there is no overarching legislation or regulatory framework Interconnection Code (updated in April 2020) – to regulate the activi- that specifically deals with digital platforms. In the case of online digital ties of the NetCo and OpCo respectively. The Interconnection Codes platforms such as search engines, social media platforms and online are the regulatory instruments underlying the ICOs and specify, inter digital media stores, they may instead be subject to a range of existing alia, requirements related to the pricing, terms and conditions for the legislation and regulatory frameworks that govern specific sectors or services offered by the NetCo and OpCo under their respective ICOs, subject matter. These may include, without limitation: as well as the obligations placed on both the NetCo and OpCo and • to the extent that a digital platform constitutes a telecoms persons requesting services from them. The obligations contained service, it may be subject to the telecoms licensing and regulatory under the Interconnection Codes are in addition to those contained in framework; the Telecoms Act, other statutes, regulations, directions, licences and • to the extent that a digital platform constitutes a broadcasting codes of practice. service, it may be subject to the broadcasting licensing and

132 Telecoms & Media 2021 © Law Business Research 2021 Drew & Napier LLC Singapore

Government schemes promoting basic and NGA broadband organisation to make a decision that affects the individual or is likely The Singapore government has been keenly promoting the develop- to be disclosed by the organisation to another organisation; and ment of basic broadband infrastructure, application and services since • make reasonable security arrangements to prevent unauthorised the 1990s. Many initiatives have been put in place over the years to access, collection, use, disclosure, copying, modification, disposal promote the establishment of nationwide broadband networks. The or similar risks. government has also devoted significant efforts to encourage the roll-out and take-up of NGA broadband services, in particular, service The Personal Data Protection Commission (PDPC), which is responsible offerings over the NGNBN. In 2015, the Singapore government launched for administering the PDPA, has also issued a set of advisory guidelines the 10-year Infocomm Media 2025 master plan, which seeks to be a key that specifically aims to address certain unique circumstances faced by enabler of the Singapore government’s vision to transform Singapore the telecommunication sector in complying with the PDPA. into the world’s first Smart Nation, by harnessing the power of tech- The PDPA is not intended to override sector-specific data protection nology including in the area of infrastructure. frameworks. To the extent of any inconsistency between the provisions In terms of government financial schemes for the promotion of of the PDPA and the provisions of other written laws, the latter will a NGNBN, it was announced in December 2007 that the government prevail. Also, the PDPA’s provisions on data protection do not affect any would grant up to S$750 million for the development of this high-speed obligation imposed by or under the law (except for contractual obliga- broadband network. This is part of the government’s intention to adopt tions), which may include regulatory obligations imposed under other a public-private partnership approach concerning the building, owner- written laws. Hence, licensees will need to ensure that they comply with ship and operation of the network. In particular, the government hopes any sector-specific obligations such as the TCC, as well as the general that more small firms will be able to offer online services without being framework under the PDPA. burdened by the cost of building the network. In line with the promotion of NGNBN, the IMDA has also spearheaded other broadband initia- Cybersecurity tives, including the Singapore Internet Exchange (SGIX), which serves 13 Is there specific legislation or regulation in place concerning as a neutral internet exchange for local and international IP traffic. By cybersecurity or network security in your jurisdiction? establishing multiple nodes in different sites in Singapore as its core, the SGIX plays a significant role in the deployment of services over the The primary legislative framework governing cybersecurity in Singapore NGNBN, allowing for the efficient exchange of traffic, reducing latency is the Cybersecurity Act. On 31 August 2018, the Cybersecurity Act and ensuring sustainable, reliable transmission of bandwidth-intensive (except for sections 24 to 35 and the Second Schedule) came into effect. services to end users. The Cybersecurity (Critical Information Infrastructure) Regulations 2018 To complement the NGNBN, a wireless broadband network and Cybersecurity (Confidential Treatment of Information) Regulations has also been deployed in key catchment areas around Singapore: 2018 also came into operation on the same date. Wireless@SG allows end users to enjoy indoor and outdoor wireless Broadly, the Cybersecurity Act: broadband access in public areas. As part of the Singapore govern- • creates a framework for the protection of designated CII against ment’s Smart Nation vision, it is currently exploring the concept of a cybersecurity threats; nationwide heterogeneous network (HetNet), which will allow devices to • provides for the appointment of the Commissioner of Cybersecurity stay seamlessly connected throughout Singapore by hopping automati- (Commissioner) and other officers for the administration of the cally across wireless networks, such as cellular and Wi-Fi networks. In Cybersecurity Act; this regard, the IMDA has worked with local mobile network operators • authorises the taking of measures to prevent, manage and respond and other industry players to conduct trials to validate the technologies to cybersecurity threats and incidents in Singapore; and and capabilities of HetNet, beginning from 2015. • once the remaining provisions come into effect, will establish a licensing framework for providers of licensable cybersecurity Data protection services in Singapore; specifically, managed security operations 12 Is there a specific data protection regime applicable to the centre monitoring services and penetration testing services. communications sector? Under the Cybersecurity Act, the Commissioner is empowered to issue The IMDA has prescribed specific rules for the telecommunication codes of practice and standards of performance to ensure the cyberse- sector. Section 3.2.6 of the TCC contains provisions that govern the use curity of CII. Pursuant to these powers, the Commissioner has issued the of end-user service information by all FBO and SBO licensees. Different Cybersecurity Code of Practice for Critical Information Infrastructure. provisions may apply, depending on whether the licensee is dealing The Cybersecurity Act provides for the regulation of CII in 11 crit- with a business end user or a residential end user. The IMDA’s standard ical sectors. CII is defined as a computer or computer system that is licence conditions also include provisions requiring licensees to ensure necessary for the continuous delivery of an essential service, the loss or the confidentiality of customer information. compromise of which will lead to a debilitating effect on the availability On a more general level, the PDPA established a baseline standard of the essential service in Singapore. The 11 critical sectors containing of data protection for all private sector organisations in Singapore. The essential services from which CII may be designated include the info- PDPA also established a ‘Do Not Call’ registry that allows individuals communications and media sectors. to register their Singapore telephone numbers to opt out of receiving The Cybersecurity Act will operate alongside the patchwork of telemarketing calls and messages. The PDPA imposes data protection existing legislation and various self-regulatory or co-regulatory codes obligations on organisations that collect, use or disclose personal data that promote cybersecurity, including but not limited to the following: in Singapore. Among other things, organisations are required to obtain • the Computer Misuse Act (Cap. 50A) (CMA), which criminalises an individual’s consent before collecting, using or disclosing his or her certain cyber activities such as hacking, denial-of-service attacks, personal data, unless an exception in the PDPA applies. Other obliga- infection of computer systems with malware, the possession or tions under the PDPA include requiring organisations to: use of hardware, software or other tools to commit offences under • make a reasonable effort to ensure that personal data they collect is the CMA, and other acts preparatory to or in furtherance of the accurate and complete if the personal data is likely to be used by the commission of any offence under the CMA; www.lexology.com/gtdt 133 © Law Business Research 2021 Singapore Drew & Napier LLC

• the PDPA and the regulations issued thereunder, which impose Call for Proposal for 5G networks certain obligations on organisations to make ‘reasonable secu- On 17 October 2019, the IMDA launched a Call for Proposal (CFP) to rity arrangements’ to prevent unauthorised access, collection, invite proposals for the award of 5G spectrum lots from the four existing use, disclosure, copying, modification, disposal or similar risks mobile network operators (Singtel, StarHub, M1 and TPG) to facilitate the concerning personal data held or processed by those organisa- rollout of 5G mobile networks by 2020. The CFP concluded on 24 June tions. The PDPC has issued general guides that, while not legally 2020 with Singtel and a joint venture consortium formed by StarHub binding, provide greater clarity on, for instance, the types of reason- and M1 obtaining the Final Awards from IMDA to deploy nationwide 5G able security arrangements that can be adopted by organisations Standalone networks which are complemented by localised mmWave in the protection of personal data. These general guides include: deployments. TPG has applied for and was allocated a mmWave spec- • the Guide to Managing and Notifying Data Breaches Under the trum to rollout localised 5G networks. PDPA (the Data Breach Guide); • the Guide to Data Protection by Design for ICT Systems; Amendments to the PDPA • the Guide to Securing Personal Data in Electronic Medium (the On 2 November 2020, the Singapore Parliament passed the Personal Securing Personal Data Guide); and Data Protection (Amendment) Bill 2020 following the first comprehen- • the Guide on Building Websites for SMEs; and sive review of the PDPA since its enactment in 2012. The amendments to • sector-specific codes of practice, such as the Telecommunication the PDPA, which will take effect in phases, introduced several significant Cybersecurity Code of Practice formulated by the IMDA, which is changes such as: imposed on major internet service providers in Singapore and • a mandatory data breach notification regime for data breaches; includes security incident management requirements. • new exceptions to the consent obligation (legitimate interests exception and business improvement exception); Big data • an expansion of the concept of deemed consent (deemed consent 14 Is there specific legislation or regulation in place, and have by notification and deemed consent by contractual necessity); there been any enforcement initiatives in your jurisdiction, • new offences for the: addressing the legal challenges raised by big data? • mishandling of personal data; • knowing or reckless unauthorised use of personal data; and In Singapore, there is no legislation or regulation that specifically deals • knowing or reckless unauthorised re-identification of with big data per se. Rather, companies involved in big-data-related anonymised data; and activities must ensure that they comply with existing data protection • higher financial penalties (from a maximum of S$1 million previ- laws and regulatory frameworks as may be applicable, such as the ously, to up to a maximum of 10 per cent of the organisation’s PDPA and the Cybersecurity Act. annual turnover in Singapore); and • provisions on data portability. Data localisation 15 Are there any laws or regulations that require data to be Most of the changes under the Amendment Act came into effect on 1 stored locally in the jurisdiction? February 2021, while several other provisions (specifically provisions relating to the enhanced financial penalty and data portability) will only There is no overarching law or regulation that requires data, in general, come into force at a later date, no earlier than 1 February 2022. to be stored locally in Singapore. The PDPA does not require personal data to be stored locally in Singapore. Nonetheless, organisations MEDIA that wish to transfer personal data outside of Singapore would need to ensure that they fulfil certain requirements under the PDPA and its Regulatory and institutional structure accompanying regulations, before such personal data may be trans- 17 Summarise the regulatory framework for the media sector in ferred outside Singapore. Furthermore, specific types of data may be your jurisdiction. the subject of regulatory obligations requiring that they be stored in Singapore. For example, licensed telecom operators may be required The Info-communications Media Development Authority (IMDA) is the to store call detail records in Singapore pursuant to their licence statutory body responsible for broadcasting and content regulation conditions. (irrespective of the transmission medium) and the primary applicable legislation is the IMDA Act and the Broadcasting Act. The IMDA was Key trends and expected changes formally established on 1 October 2016 as a converged regulator for 16 Summarise the key emerging trends and hot topics in the info-communications and media sectors. At present, the telecoms communications regulation in your jurisdiction. and media sectors continue to be governed by separate regulatory frameworks. Converged competition code for telecommunication and media Under the existing framework, ‘media’ is defined in the IMDA Act markets as referring to any film, newspaper, broadcasting service or publication On 5 January 2021, the IMDA launched its second public consultation (as defined in the Films Act, Newspaper and Printing Presses Act, the to seek views on the draft converged competition code for the telecoms Broadcasting Act and the Undesirable Publications Act respectively). The and media markets. At present, competition and market-related matters Minister for Communications and Information (the Minister) may further in the telecoms and media sectors are governed separately by two specify in the Gazette any other thing to be included under ‘media’. different codes of practice. In line with the IMDA’s role as a converged In respect of policy formulation, the IMDA consults several regulator, it has decided to review both codes of practice with the aim committees in creating and developing its regulatory framework. of merging the two frameworks and develop a harmonised converged These include various programme advisory committees for broadcast competition code for both markets. programmes in different languages and several other consultative panels. Their members are drawn from a cross-section of society and the media industry.

134 Telecoms & Media 2021 © Law Business Research 2021 Drew & Napier LLC Singapore

Further, under the existing framework at the time of writing, Market Conduct Code (MMCC). However, the IMDA is currently reviewing content and broadcasting regulation remain separate from infrastruc- and developing a converged competition code to govern competition ture regulation. Therefore, firms should be mindful that they must and market-related matters in both the telecoms and media markets, comply with both the licensing and regulatory requirements imposed which will supersede the MMCC when it comes into effect. by the IMDA for content and broadcasting, as well as for the establishment and operation of any infrastructure. Cross-ownership No regulations specifically prohibit the cross-ownership of media Ownership restrictions companies, including radio, television and newspapers. Such mergers 18 Do any foreign ownership restrictions apply to media and acquisitions between media companies are regulated by the IMDA. services? Is the ownership or control of broadcasters The prior written approval of the IMDA is required for all consolidations otherwise restricted? Are there any regulations in relation or mergers between a regulated person (as defined in the IMDA Act) and to the cross-ownership of media companies, including radio, another regulated person, or any other person (not being a regulated television and newspapers? person) carrying on business in the media industry (section 65 of the IMDA Act). Paragraph 8 of the MMCC details the IMDA’s regulation of Foreign investors such consolidation activities. Intra-group consolidations are exempted There are provisions under the Broadcasting Act regulating foreign from the requirement to obtain the IMDA’s approval under paragraph participation in a broadcasting company. Prior approval of the IMDA 8.2 of the MMCC. must be obtained if a person wishes to receive funds from a foreign source to finance any broadcasting service owned or operated by a Licensing requirements broadcasting company (section 43(1) of the Broadcasting Act). Also, no 19 What are the licensing requirements for broadcasting, company (unless the Minister approves otherwise) is to be granted or including the fees payable and the timescale for the permitted to hold a relevant licence (as defined in the Broadcasting Act) necessary authorisations? if the Minister is satisfied that any foreign source, alone or together with one or more foreign sources: Under section 5 of the Broadcasting Act, the IMDA may grant two types • holds no less than 49 per cent of the shares in the company or its of licences: broadcasting licences and broadcasting apparatus licences. holding company; • is in a position to control voting power of no less than 49 per cent Broadcasting licences in the company or its holding company; or To broadcast programmes in Singapore, a person must obtain a broad- • all or a majority of the persons having the direction, control or casting licence from the IMDA. Broadcasting licences may be granted management of the company or its holding company are appointed for the following categories of licensable broadcasting services: by, or accustomed or under an obligation to act in accordance with • free-to-air nationwide, localised and international televi- the directions of, any foreign source. sion services; • subscription nationwide, localised and international televi- Ownership controls sion services; The Broadcasting Act contains ownership and control provisions that • special interest television services; apply to broadcasting companies as defined therein. A ‘broadcasting • free-to-air nationwide, localised and international radio services; company’ is a Singapore-incorporated company or Singapore branch • subscription nationwide, localised and international radio services; office that holds a ‘relevant licence’. A relevant licence refers to any free- • special interest radio services; to-air licence, or any broadcasting licence under which a subscription • audio-text, video-text and teletext services; broadcasting service may be provided, that permits a broadcast capable • video-on-demand services; of being received in 50,000 dwelling houses (which is defined to include • broadcast data services; and hotels, inns, boarding houses and other similar establishments) or • computer online services. more. Also, the Minister may designate any other broadcasting licence as a relevant licence on public interest or national security grounds. A Listed below are the licence fees that have been published by the IMDA class licence will not be considered a relevant licence. as payable for the following broadcasting services: Under the Broadcasting Act, no person may, on or after 2 September • 2.5 per cent of total revenue or S$250,000 per annum, whichever 2002, become a substantial shareholder, a 12 per cent controller or an is higher, and a performance bond of S$200,000 for a free-to-air indirect controller of a broadcasting company without first obtaining the nationwide television licence; approval of the Minister. The term ‘substantial shareholder’ is defined • 2.5 per cent of total revenue and a performance bond of $200,000 under section 81 of the Companies Act and generally refers to a person for a free-to-air nationwide radio service licence; who has an interest in not less than 5 per cent of the voting shares in a • S$5,000 per annum for a subscription international television company. The terms ‘12 per cent controller’ and ‘indirect controller’ are services licence (commonly known as a satellite broadcasting defined in section 36 of the Broadcasting Act. licence). A performance bond of S$50,000 must be given to the Under section 33(2) of the Broadcasting Act, unless the IMDA IMDA by broadcasters not based or registered in Singapore. approves otherwise, the CEO of a broadcasting company and at least The performance bond must be issued by a financial institution half of its directors must be citizens of Singapore. A broadcasting approved by the IMDA; company may request to be exempt from this requirement, and exemp- • 2.5 per cent of total revenue for a nationwide subscription tele- tions have been made by the Minister. vision licence, subject to a minimum licence fee of S$50,000 per Notably, the category of niche subscription television licensees has year throughout. Also, a performance bond of S$200,000 must be been exempted from all foreign ownership restrictions. furnished; and Broadcasting licensees that are regulated persons (within the • S$1,000 per year for a television receive-only (TVRO) licence (per meaning of section 2 of the IMDA Act) are subject to the provisions on satellite dish). For a temporary TVRO licence, the licence fee is consolidations and mergers in the IMDA Act and currently, the Media S$100 per dish for a period of up to 30 days. www.lexology.com/gtdt 135 © Law Business Research 2021 Singapore Drew & Napier LLC

Section 8(2) of the Broadcasting Act provides that a broad- Foreign programmes and local content requirements casting licence must be in such a form and for such a period and may 20 Are there any regulations concerning the broadcasting contain such terms and conditions as the IMDA may determine. The of foreign-produced programmes? Do the rules require a Broadcasting Act sets out certain conditions that licensees must comply minimum amount of local content? What types of media fall with, such as compliance with the IMDA’s codes of practice and certain outside this regime? public service broadcasting obligations. Templates of such licences are not publicly available. The IMDA has not indicated publicly how long it There are no express regulations concerning the broadcast of foreign will take to process all licence applications. Generally speaking, appli- programmes, irrespective of media type. Such broadcasts are, however, cants may need to factor in several weeks for their applications to be subject to paragraph 16 of the Schedule of the Broadcasting (Class processed, depending on whether all the information required for the Licence) Notification that states that an internet content provider IMDA’s evaluation purposes has been submitted. For more complex or licensee shall remove or prohibit the broadcast of the whole or any part novel applications, the IMDA may take longer. of a programme included in its service if the IMDA informs the licensee In addition to the individual broadcasting licences listed above, the that its broadcast is against the public interest, public order or national IMDA has specified that the following licensable broadcasting services harmony, or offends good taste or decency. are subject to the class licence regime under the Broadcasting (Class There are no explicit rules requiring a minimum amount of local Licence) Notification: content. However, under section 17 of the Broadcasting Act, the IMDA • audio-text, video-text and teletext services; may require a broadcasting licensee to broadcast programmes provided • broadcast data services; by the IMDA or the Singapore government as a condition of its licence, • virtual area network computer online services; and including the following: • computer online services that are provided by internet content • programmes for schools or other educational programmes; providers and ISPs. • news and information programmes produced in Singapore or elsewhere; A company wishing to provide a licensable broadcasting service that is • arts and cultural programmes; and subject to the class licence regime above must register with the IMDA. • drama and sports programmes produced in Singapore. In particular, audio-text service providers and internet service providers (ISPs) must register with the IMDA within 14 days of commencing the Further, free-to-air television and subscription television broadcasting service. The IMDA’s guidelines state that a completed application will be licensees may be subject to programme codes issued by the IMDA processed within four working days. containing programming and content guidelines, such as the Content All class licensees must comply with the licence conditions contained Code for Nationwide Managed Transmission Linear Television Services in the Broadcasting (Class Licence) Notification. Also, internet content and the Content Code for Over-the-Top, Video-on-Demand and Niche providers and ISPs must comply with the Internet Code of Practice. The Services. Generally, programme codes will contain guidelines congruent yearly fees payable for the services listed below have been published in with national objectives, uphold racial and religious harmony, observe the Schedule of the Broadcasting (Class Licence) Notification: societal and moral standards and promote positive family values. • S$2,000 for the provision of teletext services; Section 19 of the Broadcasting Act also provides for a must-carry • S$1,000 for the provision of computer online services by internet obligation. access service providers; • S$1,000 for the provision of computer online services by non-local- Advertising ised internet service resellers (with 500 or more user accounts); 21 How is broadcast media advertising regulated? Is online • S$100 for the provision of computer online services by non-localised advertising subject to the same regulation? internet service resellers (with less than 500 user accounts); and • S$100 (per premise) for the provision of computer online services At present, stricter content standards are applied to advertisements in by a localised internet service reseller. public places (given their unsolicited viewing) and in media that have a wider impact on the general public, such as advertisements on TV. The fees payable for the services not mentioned in the Broadcasting The Advertising Standards Authority of Singapore (ASAS) lays down (Class Licence) Notification are not publicly available. If broadcasting broad industry codes and guidelines. The Singapore Code of Advertising infrastructure is to be deployed, a separate licence from the IMDA may Practice (SCAP) is reviewed periodically by ASAS and was most recently also be required. updated in 2019 to include a chapter on the statutes and statutory Separately, digital display panels operating on a distribution instruments that have special relevance to advertising and related network (Distribution Network DDPs) which are installed in public trading practices. The basic premise of the SCAP is that all advertise- places and within public passenger transport vehicles are also subject ments should be legal, decent, honest and truthful. The SCAP applies to the class licence regime under the Broadcasting (Class Licence — to all advertisements for any goods, services and facilities appearing Broadcasting to Digital Display Panels) Notification 2020. This class in any form or any media, including online advertisements in informa- licence is automatic and there are no requirements on operators of tion network services, electronic bulletin boards, online databases Distribution Network DDPs to register, pay licence fees or put up a and internet services. The SCAP seeks to promote a high standard performance bond. of ethics in advertising through self-regulation against the background of national and international laws and practices, including the Broadcasting apparatus licences International Code of Advertising Practice published by the International To install, import, sell or operate any broadcasting apparatus in Chamber of Commerce. In August 2016, ASAS also issued Guidelines for Singapore, a person must obtain a licence from the IMDA under section Interactive Marketing Communication & Social Media (Interactive and 20 of the Broadcasting Act. This requirement applies to apparatus Social Media Guidelines), which set out standards for advertising and currently listed under the First Schedule to the Broadcasting Act (ie, the marketing communication that appear on interactive and social media. TVRO system). The IMDA retains the discretion to exempt any person or The Interactive and Social Media Guidelines set the standard of ethical broadcasting apparatus (or class thereof) from this licence requirement. conduct that are to be adopted by all marketers, establish the levels

136 Telecoms & Media 2021 © Law Business Research 2021 Drew & Napier LLC Singapore of disclosure that are required of sponsored messages that appear on content (supplying licensees) to provide such channels or content for social media, prohibit false reviews and engagement, and dictate the cross-carriage on the pay-TV network of other subscription nationwide clarity of the purchase process in e-commerce. Between November television service providers, who are in turn obliged to carry such chan- 2017 and January 2018, ASAS conducted a public consultation seeking nels and content on all ‘relevant platforms’ (as defined in paragraph post-implementation feedback on the Interactive and Social Media 2.3(ea) of the MMCC) in their entirety, with no alteration or degradation in Guidelines. In particular, it sought feedback on the implementation of quality. A relevant platform means a managed network over or using any the guidelines, and areas where the guidelines might be fine-tuned or (or any combination of) hybrid fibre coaxial, optical fibre or asymmetric updated. At the time of writing, ASAS has not published its response to digital subscriber line. Supplying licensees may stand to benefit from an the feedback received. increased subscriber base, as the MMCC requires that any consumer Alongside ASAS, the IMDA also plays a role in guiding the adver- accessing such cross-carried content shall, for billing and operational tising industry when the need arises. For TV broadcasts, the IMDA purposes, also be considered a subscriber of the supplying licensee. The issues advertising codes to broadcasters, which are stricter than those mandatory cross-carriage obligation applies to all exclusive channel and for the print media, because of the wider reach of television broad- content arrangements signed or renewed on or after 12 March 2010. casts. The IMDA has issued the Television and Radio Advertising and Under paragraph 2.4 of the MMCC, free-to-air television and radio Sponsorship Code (the Advertising Code), which aims to protect the licensees (and any other person as the IMDA may direct) must comply interests of viewers as consumers and require advertisements to be with the IMDA’s requirements regarding the broadcast of events that truthful, lawful and not to contain any misleading claims. All claims are of national significance. The IMDA will provide written notification to and comparisons must be capable of substantiation. The Advertising free-to-air television and radio licensees regarding the events of national Code requires advertisements to respect public taste and interests and significance that they are to broadcast. The IMDA will generally desig- uphold moral and social values. Among other things, the Advertising nate only very select events as events of national significance that are to Code also stipulates that broadcasters should exercise discretion when be broadcast live or delayed. scheduling advertisements and trailers to ensure that these are appro- The following events are currently identified in the MMCC as being priate for the viewing audience. events of national significance: Concerning holders of class licences, paragraph 16 of the Schedule • the National Day parade; to the Broadcasting (Class Licence) Notification states that a licensee • the National Day rally; shall remove or prohibit the broadcast of the whole or any part of a • the Prime Minister’s National Day message; programme included in its service if the IMDA informs the licensee that • parliamentary proceedings, including the budget speech and debate; its broadcast is against the public interest, public order or national • a general election, by-election and presidential election; and harmony, or offends good taste or decency. In the case of online • state funerals. advertising, internet content providers and ISPs are considered class licensees and must also comply with paragraph 16 of the Schedule to The IMDA may specify additional events or remove existing ones. the Broadcasting (Class Licence) Notification. Also, paragraph 13(a) of If it is not desirable for more than one entity to locate cameras and the same requires licensees to comply with the IMDA’s codes of practice. other equipment at the site of such an event, the IMDA may select a broad- In this respect, the IMDA-administered Internet Code of Practice requires caster to be the sole broadcaster for the event (the lead broadcaster) or class licensees to use their best efforts to ensure that prohibited mate- conduct a competitive tender for the position. The lead broadcaster must rial is not broadcast over the internet to users in Singapore. Examples make the feed from the event available to all free-to-air television and of prohibited material include, without limitation, content that endorses radio licensees and any other person that the IMDA specifies. ethnic, racial or religious hatred, strife or intolerance, and material that Any television or radio licensee that receives the feed from the depicts extreme violence. Internet content providers and ISPs must also lead broadcaster must compensate the lead broadcaster for reason- ensure that these advertisements are in line with the SCAP. able costs that are not otherwise compensated (eg, through government Separately, the Undesirable Publications Act prevents the importa- subsidies) incurred by the lead broadcaster in providing the television or tion, distribution or reproduction of undesirable publications. This may radio licensee with the feed. include advertisements that are accessible by computers or other electronic devices, such as online advertisements. Regulation of new media content 23 Is new media content and its delivery regulated differently Must-carry obligations from traditional broadcast media? How? 22 Are there regulations specifying a basic package of programmes that must be carried by operators’ broadcasting IPTV services distribution networks? Is there a mechanism for financing the The IMDA adopts a two-tier licensing framework for the provision of costs of such obligations? internet protocol television (IPTV) services in Singapore: nationwide subscription TV licence and niche TV service licence (niche licence). The Broadcasting Act provides for a must-carry obligation. Under The niche licence was introduced to facilitate the growth of IPTV and section 19 of the Broadcasting Act, the IMDA may require a broadcasting other novel services in Singapore by offering operators greater flexibility licensee to provide for transmission and reception of any broadcasting to roll out services for different market segments, with less onerous service that is provided by any other person or that is specified in regulatory obligations. It is for service providers targeting specific niche its licence. market segments. Currently, must-carry obligations are imposed on all nationwide The nationwide subscription TV licence applies to operators subscription TV licensees to allow their subscribers to access all local targeting the mass market. The first nationwide IPTV licence was free-to-air channels on their network. awarded to SingNet Pte Ltd (SingNet) in January 2007 for the provision Paragraphs 2.1.5 and 2.7 of the MMCC establish a cross-carriage of its mio TV service, which has since been renamed Singtel TV. measure for the pay-TV sector, under which a mandatory obligation is Licence applicants are free to decide which licence tier they wish imposed upon all licensed subscription television service providers who to operate under. acquire exclusive broadcasting rights to any channel or programming www.lexology.com/gtdt 137 © Law Business Research 2021 Singapore Drew & Napier LLC

Online news sites have already been established. With the advent of digital broadcasting, Since 1 June 2013, online news sites that report regularly on issues the IMDA has also planned the spectrum allocations for both digital relating to Singapore and have significant reach among local readers audio and digital video broadcasting. To provide broadcasting services, are required by the IMDA to obtain an individual licence, placing them a broadcast service licence and a broadcasting station licence are on a more consistent regulatory framework with traditional news plat- required from the IMDA. forms that are already individually licensed. Under the licensing framework, online news sites will be individu- Media plurality ally licensed if they report an average of at least one article per week 26 Is there any process for assessing or regulating media on Singapore news and current affairs over a period of two months, and plurality (or a similar concept) in your jurisdiction? May the are visited by at least 50,000 unique IP addresses from Singapore each authorities require companies to take any steps as a result of month over a period of two months. such an assessment? These sites were previously automatically class-licensed under the Broadcasting Act. Presently, when the IMDA has assessed that Singapore does not currently have a formal process or framework in a site has met the criteria to be individually licensed, the IMDA will place to assess media plurality. issue a formal notification, and work with the site to move it to the new licensing framework. Key trends and expected changes The IMDA has stated that it does not expect any changes in content 27 Provide a summary of key emerging trends and hot topics in standards to result. Individually licensed news sites will be expected to media regulation in your country. comply within 24 hours with the IMDA’s directions to remove content found in breach of content standards and will be required to put up a Potential new laws to address harmful online content performance bond of S$50,000. During the Budget 2021 debate in the Singapore Parliament on 1 March 2021, it was announced that the Ministry of Home Affairs Digital switchover and the Ministry of Communications and Information are currently 24 When is the switchover from analogue to digital broadcasting reviewing options for the implementation of new laws to address the required or when did it occur? How will radio frequencies spread of harmful online content through internet platforms, citing live freed up by the switchover be reallocated? streaming of mass shootings and voyeuristic materials disseminated without consent as examples of harmful online content that the laws Singapore has completed its digital switchover and analogue TV chan- are intended to target. The Singapore government is currently studying nels have been switched off as of 1 January 2019. the experiences and regulatory models of other countries. In June 2012, the then Media Development Authority (now IMDA) announced that all free-to-air channels would be transmitted digitally REGULATORY AGENCIES AND COMPETITION LAW by the end of 2013 using the DVB-T2 (digital video broadcasting – second generation terrestrial) broadcasting standard. In this regard, Regulatory agencies the nationwide free-to-air broadcaster MediaCorp announced that it 28 Which body or bodies regulate the communications and would transmit all free-to-air channels in digital format from December media sectors? Is the communications regulator separate 2013. To ensure a smooth switchover, there was a simulcast period from the broadcasting or antitrust regulator? Are there during which all free-to-air channels were broadcast in digital and mechanisms to avoid conflicting jurisdiction? Is there a analogue until the switchover was fully completed. specific mechanism to ensure the consistent application of In January 2016, the Ministry of Communications and Information, competition and sectoral regulation? which is the parent ministry overseeing the IMDA, announced that it aimed to complete the switchover and to switch off analogue broad- The Info-communications Media Development Authority (IMDA) was casting by the end of 2017. Freed-up spectrum has been reallocated to officially formed on 1 October 2016 as a converged regulator for the mobile broadband services in the 2016–17 spectrum allocation exercise info-communications and media sectors, following the restructuring by the IMDA, which administers the allocation of RF spectrum. of the IDA and the MDA. At present, the telecoms and media sectors In November 2017, the Singapore government announced a continue to be governed by separate regulatory frameworks. further one-year extension of the cessation of analogue broadcast Under the existing regulatory framework, competition issues in from end-2017 to end-2018. The purpose of this extension was to give the telecoms and media sectors may be governed by sector-specific households more time to make the switch from analogue to digital rules as administered by the IMDA. broadcasting. On 1 January 2019, the switchover was completed and The Competition Act, which establishes the general competition all broadcast free-to-air TV programmes are now exclusively shown in law and is administered by the Competition and Consumer Commission digital format. of Singapore (CCCS), provides that it does not apply insofar as another regulatory authority (other than the CCCS) has jurisdiction Digital formats in a particular competition matter. Accordingly, the CCCS does not 25 Does regulation restrict how broadcasters can use their have jurisdiction over competition issues that fall under the purview spectrum? of the IMDA. The IMDA has issued the Telecom Competition Code 2012 (TCC), The IMDA’s Spectrum Management Handbook explains that planning which regulates competition in the provision of telecoms services. and channelling of the broadcasting spectrum is carried out at the Section 10 of the TCC (relating to consolidations and merger control), international level (International Telecommunication Union), regional together with part VA of the Telecoms Act at the end of 2011, sets out a level (Asia-Pacific Broadcasting Union, ABU) and bilateral levels (ie, merger review framework for the telecoms sector. border coordination with neighbouring countries). As such, there are Concerning the media sector, the IMDA has issued the Media only a certain number of channels in each broadcasting band that Market Conduct Code (MMCC), which provides for market conduct and can be used in Singapore. The usage plans for broadcasting services competition rules applicable to the media industry only.

138 Telecoms & Media 2021 © Law Business Research 2021 Drew & Napier LLC Singapore

On 19 March 2021, the IMDA concluded its second public consulta- Coronavirus tion on the draft converged competition code governing the telecoms 31 What emergency legislation, relief programmes and other and media sectors, which was published on 5 January 2021. The IMDA initiatives specific to your practice area has your state is currently reviewing the submissions from the industry and inter- implemented to address the pandemic? Have any existing ested parties. government programmes, laws or regulations been amended to address these concerns? What best practices are advisable Appeal procedure for clients? 29 How can decisions of the regulators be challenged and on what bases? In 2020, the Singapore government introduced a broad range of measures and initiatives in response to the covid-19 pandemic, such as Under section 69 of the Telecoms Act, any telecoms licensee aggrieved the COVID-19 (Temporary Measures) Act 2020 (the COVID-19 Act) and by an IMDA decision or direction, or anything in any code of practice accompanying subsidiary legislation such as the COVID-19 (Temporary or standard of performance, and certain other aggrieved persons, may Measures) (Control Order) Regulations 2020 (the Control Order request the IMDA to reconsider the matter or appeal to the Minister Regulations). Under the COVID-19 Act, the Singapore government is for Communications and Information (the Minister), who may confirm, empowered to make regulations to prevent, protect against, delay or modify or reverse the same. Where a reconsideration request and an otherwise control the incidence or transmission of the coronavirus in appeal have been simultaneously filed, the IMDA will reconsider the Singapore. For example, in the Control Order Regulations, there are matter and the appeal to the Minister will be deemed withdrawn. requirements on various measures such as mandatory mask-wearing in Under section 68 of the IMDA Act, any person aggrieved by any almost all circumstances, maximum permissible group sizes for gather- act, direction or decision of the IMDA under Part 7 of the IMDA Act may ings, safe management measures for workplaces and retail spaces and appeal to the Minister, who may confirm, vary or reverse the same. work-from-home arrangements. Under section 59 of the Broadcasting Act, any licensee aggrieved by any decision of the IMDA in its discretion under the Broadcasting Act, Measures Specific to the TMT Sectors or anything contained in any code of practice or direction issued by the Primarily, employers and businesses in the Infocomm Technology (ICT) IMDA, may appeal to the Minister, who may confirm, vary or reverse the sector should note that they are required to comply with the Ministry decision or direction, or amend the code of practice. of Trade and Industry’s (MTI) and Ministry of Manpower’s (MOM) advi- An aggrieved person who has unsuccessfully appealed to the sories on safe management measures and requirements to resume Minister may also be able to mount a further challenge by commencing operations at workplaces, which include: an action for judicial review in the courts. • implementing a system of safe management measures at workplaces; Competition law developments • reducing physical interaction and ensuring safe distancing at 30 Describe the main competition law trends and key merger workplaces; and antitrust decisions in the communications and media • supporting contact tracing; sectors in your jurisdiction over the past year. • requiring personal protective equipment and personal hygiene; • ensuring the cleanliness of workplace premises; and Public consultations on proposed converged competition code for • implementing health checks and protocols to manage poten- telecommunication and media markets tial cases. Competition and market-related matters in the telecoms and media sectors are currently governed separately by two different codes of Also, the IMDA and SGTech have set out additional measures for certain practice, namely, the TCC and MMCC. businesses in the following settings: In line with the IMDA’s role as a converged regulator, and against • providing onsite IT services, support or manpower at customers’ the backdrop of rapid convergence in the telecommunication and media premises; landscapes, the IMDA has decided to undertake a comprehensive review • data centre operations; and of the separate codes of practice governing the telecommunication and • ICT retail stores and e-commerce. media markets, with the aim of merging the two frameworks and develop a harmonised converged competition code for both markets, to ensure Employers and businesses that have operations applicable to these that the competition framework for both markets remains relevant. workplace settings must comply not only with the measures set up by The IMDA has launched two public consultations on the proposed MTI and MOM but also with the additional measures, where applicable. converged competition code. The first consultation, which ran from 20 February 2019 to 15 May 2019, was to invite comments on the broad Measures in Respect of Media Content Production Activities policy proposals for the proposed converged competition code, as well Also, the IMDA has issued a set of Mandatory Safety Rules for the as comments on how the digital transformation of industries could Resumption of Content Production (MSR) (last updated 9 February 2021) affect competition policy in the long term. The second public consulta- which applies to all companies carrying out media content production tion, which invited comments from 5 January 2021 to 19 March 2021, activities. Examples of rules in the MSR include: addressed the responses received in the first public consultation and • for companies involved in the production of programmes for sought comments on the actual drafting of the proposed converged broadcast and other digital media, such as TV commercials, short competition code. The IMDA is currently reviewing the submissions from narratives, documentaries, feature films, requiring large crew: no the industry and interested parties. more than 50 personnel are allowed on location, including no more than 20 onscreen talent and performers unmasked, at any given time. Live singing is not allowed; • for companies involved in all other productions: no more than 30 personnel are allowed on location, including no more than 10 onscreen talent and performers unmasked at any given time; www.lexology.com/gtdt 139 © Law Business Research 2021 Singapore Drew & Napier LLC

• For ‘live’ singing as part of the production, all productions must adhere to no more than 30 personnel on location, including no more than five onscreen talent and performers singing unmasked at any given time, and must observe 2-metres’ safe distancing from the next person; • unmasking dispensations are to be kept strictly to the fixed cast of onscreen talent and performers (not interchangeable with other non-onscreen performing roles) for the entire production; and • no on-site audiences should be present on location and all Lim Chong Kin [email protected] personnel should comprise only talent and performers (ie, cast, crew and staff). 10 Collyer Quay Employers and businesses should also note that failure to comply with 10th Floor, Ocean Financial Centre the safe management measures specified in the COVID-19 Act may Singapore 049315 constitute an offence that is punishable upon conviction with a fine of Tel: +65 6531 0733 up to S$10,000 or a jail term of up to six months, or both. Repeated non- Fax: +65 6535 4906 www.drewnapier.com compliance is punishable with a fine of up to S$20,000 or a gaol term of up to 12 months, or both.

140 Telecoms & Media 2021 © Law Business Research 2021 South Korea

Ji Yeon Park, Juho Yoon and Kwang Hyun Ryoo Bae, Kim & Lee LLC

Foreign ownership restrictions under the TBA apply only to CTS The use of radio spectrum is regulated by the MSIT, and the relevant providers in possession of their own networks. Generally, only up to 49 MSIT licence would generally specify the permitted use. per cent of foreign ownership is permitted in such CTS providers, but A spectrum licence may be transferred or sub-licensed from three such restrictions may be alleviated where the foreign investor is from years after the original date of issuance. The transferee or sub-licensee a certain foreign country that has entered into a free trade agreement must satisfy all the requirements applicable to the original licence with South Korea. holder and obtain prior approval from the MSIT. In the mergers and acquisitions context, under the amended TBA, CTS providers, including enterprises that were formerly SCTS providers, may, depending on their annual revenue for the previous year, have to obtain prior approval from the MSIT, or at least file a report to the MSIT, if they are the subject of a merger or an acquisition. www.lexology.com/gtdt 141 © Law Business Research 2021 South Korea Bae, Kim & Lee LLC

Ex-ante regulatory obligations Number allocation and portability 4 Which communications markets and segments are subject to 7 Describe the number allocation scheme and number ex-ante regulation? What remedies may be imposed? portability regime in your jurisdiction.

Telecommunications service providers must provide telecommuni- The MSIT has the authority to establish and enforce rules on the allocations services without unjustified discrimination. In this respect, cation of phone numbers and mobile phone numbers. Under the TBA, telecommunications service providers are required to file a report to the phone numbers are provided to business operators based on the type MSIT with regards to their business status, facilities, users, etc, adding of telecommunication service they provide (eg, 070 is allocated to VoIP to the transparency of their businesses. business operators and 010 to mobile operators). For CTS providers of a certain revenue level, there is increased Also, under the TBA, operators are required to provide number regulatory oversight. They are required to produce separate accounts portability when customers switch operators, regardless of whether the concerning their telecommunications business and non-telecommuni- numbers are assigned geographically or non-geographically. cations business, as well as, in relation to CTS and VATS, to distinctly set out the assets, expenses and profits of each category. Customer terms and conditions Further, CTS providers of a certain size of revenue must file a report 8 Are customer terms and conditions in the communications to the MSIT in respect of their customer terms and conditions, while sector subject to specific rules? CTS providers surpassing certain thresholds in terms of subscriber numbers and market share must receive prior approval from the MSIT Yes. Under the TBA, the customer terms and conditions of some CTS concerning their customer terms and conditions. As part of the approval provider must be reported to the MSIT, and CTS providers surpassing process, the MSIT can require adjustment of the tariffs proposed by the certain thresholds in terms of subscriber numbers and market share CTS provider, if it deems the tariffs to be excessive, considering the cost must receive prior approval from the MSIT concerning their customer of supply, revenue, classification of costs and revenue by service, and terms and conditions. This approval is subject to fulfilling certain criteria, impact on the fair competition in the telecommunications market. such as reasonable consideration of costs and profit and refraining from unfair discrimination against specific users. Structural or functional separation Further, the Act on the Regulation of Terms and Conditions, which 5 Is there a legal basis for requiring structural or functional prescribes general rules regarding customer terms and conditions to separation between an operator’s network and service prevent unfair practices, also applies to customer terms and conditions activities? Has structural or functional separation been specific to the communications sector. introduced or is it being contemplated? Net neutrality If the KCC determines that effective competition in a particular market is 9 Are there limits on an internet service provider’s freedom to deterred by a dominant telecommunications service provider’s actions control or prioritise the type or source of data that it delivers? that undermine fair competition or users’ interests, the KCC may, after Are there any other specific regulations or guidelines on net public consultations with the MSIT, order structural or functional sepa- neutrality? ration between network and service activities of that service provider. However, an order for structural or functional separation is an In principle, the TBA prohibits telecommunications service providers extraordinary measure that has not been used to date in South Korea. from imposing unreasonable or discriminatory conditions or limitations that would amount to any control or prioritisation in the type or source Universal service obligations and financing of data delivered. Detailed standards for prohibited conditions and limi- 6 Outline any universal service obligations. How is provision of tations are as prescribed in a Public Notice promulgated by the KCC. these services financed? Platform regulation Under the TBA, all CTS providers (except for small-sized operators) are 10 Is there specific legislation or regulation in place, and have divided into two categories. Either they provide universal services or there been any enforcement initiatives relating to digital they provide compensation for expenses arising from the provision of platforms? universal services by other service providers. Those service providers that provide universal services must Digital platforms are categorised as VATS providers under the TBA. submit a report to the MSIT regarding the expenses incurred in the Data protection aspects, together with requirements on user-facing process of providing universal services. The MSIT arranges for such disclosing and other terms of use, are regulated primarily by the PIPA, expenses to be compensated, based on the level of sales, from the and in certain respects by the Act on the Promotion of Information and proceeds received from those service providers that are required Communications Network Utilisation and Information Protection (the IT to provide compensation for other service providers’ provision of Network Act). universal services. Under the TBA, VATS providers must file a report with the MSIT, and Universal services include, among other things: this report must include a schematic diagram of the telecoms network to • the provision of wire phone services; be used, a detailed description of user protection measures and details • the provision of internet services; the provision of phone services of technical measures in place to prevent online copyright infringement. for emergency calls; and VATS providers with less than 100 million won in capital, however, are • the reduction or exemption of service charges to disabled and low- exempt from this reporting obligation. Upon the filing of the report, a income persons for toll call services, mobile phone services and VATS provider must commence business within one year from the filing Long Term Evolution services. date, also implementing technical measures to protect minors as well as measures against viruses and malicious codes. The TBA authorises the MSIT to survey VATS providers in this regard and requires them to submit any documents necessary to prove compliance with these requirements.

142 Telecoms & Media 2021 © Law Business Research 2021 Bae, Kim & Lee LLC South Korea

Also, the same prohibition on control or prioritisation of data Cybersecurity delivery equally applies to VATS providers, although the regulation, as 13 Is there specific legislation or regulation in place concerning explained above, is not yet enforceable as the KCC has not promulgated cybersecurity or network security in your jurisdiction? an enforcement decree. The PIPA, together with the IT Network Act in some respects, The PIPA requires IT service providers (data controllers) and, if appli- regulates digital platforms on issues including data protection, user cable, their data processors to take technical and managerial measures protection (such as protection of minors and protection from illegal to ensure the protection of personal data. content) and the security of IT networks. Such measures include requirements to: There is a significant move to further regulate digital platforms, • establish and implement an internal personal data manage- in draft legislation called the Act on Fairness in Online Platform ment policy; Intermediated Transactions (Online Platform Act) and advanced by • prevent unauthorised access to personal data by controlling access the Korea Fair Trade Commission (KFTC), the main regulator for fair- authority and implementing technical measures to control access, ness in contracting. The main thrust of the draft statute, which seems such as firewalls or intrusion protection systems; likely to pass (possibly within 2021), is to restrain practices by online • encrypt personal data; platforms that are seen as one-sided or abusive vis-à-vis the vendors • implement logs of access to personal data systems and provide that use the platforms. Platforms meeting some certain threshold of measures for preventing fabrication and alteration of such logs; scale would be subject to a variety of requirements concerning trans- • utilise security programmes, such as antivirus software; parency of terms (eg, terms governing exclusivity, pricing conditions • store personal data in a safe area; and and standards for item display), minimum advance notice of changed • minimise the number of personnel processing users’ personal terms, and other aspects. Indicative of the direction of the draft statute, information to the extent possible. it is said by the KFTC to be modelled on EU regulations governing fairness and transparency between online platforms and commercial users Big data (small and medium-sized enterprises). In the same vein, the KCC (partly 14 Is there specific legislation or regulation in place, and have emulating the KFTC) has proposed amendments to the e-Commerce Act there been any enforcement initiatives in your jurisdiction, that would call on platform services to provide enhanced disclosures, addressing the legal challenges raised by big data? and additional options, to consumer users, and modulate aspects of the relationship between the platform and vendors. Under the amended PIPA, South Korea has adopted major amendments to its data regulatory framework that will, to a large extent, free Next-Generation-Access (NGA) networks up the use of pseudonymised data and ease the way for expansion of 11 Are there specific regulatory obligations applicable to big data-driven services. (Allied with these changes under the main NGA networks? Is there a government financial scheme to data privacy statute, amendments to the Credit Information Protection promote basic broadband or NGA broadband penetration? Act introduce similar types of latitude for use, including aggregation, of pseudonymised data in the financial sector in particular.) Several The Framework Act on National Informatisation authorises the MSIT, guidelines have followed, particularly in the third quarter of 2020, to while it must refer to submissions from other government agencies, to supplement the standards and requisites for use of pseudonymised establish a basic plan for national informatisation every five years, and data, including technical and administrative parameters, and including each basic plan may include plans for the expansion and management for the financial sector and areas such as life sciences. of relevant infrastructure and other facilities, support for informatisa- Under the current PIPA, personal information, defined as ‘information of private sectors and procurement and management of funds. tion regarding an individual’, can include information that identifies or enables identification of an individual (thus, identifiable information) but Data protection also information that, while not by itself identifiable, enables identifica- 12 Is there a specific data protection regime applicable to the tion when combined with other information. The amended PIPA takes communications sector? this further, lending clarity to the concept of information being identifiable when combined with other information, and further defining the The data protection regime, already largely encompassed in the PIPA, separate case of ‘pseudonymised information’. has been further consolidated in that primary statute as a result of Pseudonymised information means information that is uniden- amendments, to it and to the IT Network Act, which came into effect on 5 tifiable without using (or combining it with) additional information, to August 2020. Data privacy provisions in the IT Network Act were, essen- restore it to its original state. The amended PIPA allows pseudonymised tially, taken and transplanted into the PIPA. However, certain IT Network information to be used – without the need of the individuals’ consent – Act provisions related to data protection, and applicable to the commu- to generate statistical information, or for scientific research or public nications sector, remain in place, such as restrictions on marketing recordkeeping. The statute will also allow the compilation of pseu- communications done online. donymised information (sourced from different data controllers) by Also, under the amended PIPA, regulatory oversight of data protec- specialised institutions, designated for such purposes by PIPC and other tion is now vested primarily in the Personal Information Protection central government agencies. This will thereby allow pseudonymised Commission (PIPC), a central agency under the Prime Minister’s office. information to be used, even in the absence of consent, to analyse big The PIPC’s ambit includes chief responsibility for monitoring and data to generate statistical information, scientific research or public policing compliance with the PIPA, and promulgating recommended record-keeping. practices and privacy policy terms. The nine commissioners of the PIPC On the other hand, the amended PIPA has not specially defined comprises government officials and various law and policy experts. ‘anonymised information’; that is, information from which an individual cannot be identified, ‘taking into reasonable consideration the time, expense and technology’ involved. While the definition of anonymised information does not seem to present a clear boundary from pseudonymised information, for the time being, it appears that www.lexology.com/gtdt 143 © Law Business Research 2021 South Korea Bae, Kim & Lee LLC

information that is classified as anonymised information could be MEDIA used in big data analysis without being subject to restrictions under the amended PIPA. Regulatory and institutional structure 17 Summarise the regulatory framework for the media sector in Data localisation your jurisdiction. 15 Are there any laws or regulations that require data to be stored locally in the jurisdiction? The regulatory framework for the media sector is set out within the Broadcasting Act (the Broadcast Act) and the Internet Multimedia Financial institutions (along with electronic financial enterprises) are Broadcasting Services Act (the IPTV Act). Whereas the IPTV Act specifi- prohibited from storing personal credit information on offshore cloud cally sets out the regulations to be followed by Internet Protocol servers. The Financial Services Commission, the primary financial Television (IPTV) operators and IPTV content providers, the Broadcast regulatory, recently amended the existing Regulation on Supervision of Act sets out the regulations applicable to operators of other types of Electronic Financial Transactions to permit the usage of cloud services, broadcasting platforms (eg, satellite broadcasting operators (SBOs)), but the new framework is confined to cloud storage and services located system operators (SOs), terrestrial broadcasting operators (TBOs), in South Korea. broadcasting related business operators (eg, relay broadcasting operators (ROs)), signal transmission network business operators (NOs) Key trends and expected changes and programme providers (PPs). Online media services are generally 16 Summarise the key emerging trends and hot topics in subject also to the IT Network Act. communications regulation in your jurisdiction. The regulatory bodies that administer the media sector are the Korea Communications Commission (KCC) and the Ministry of Science Regulators are moving to stiffen monitoring and regulation of foreign and ICT (MSIT). The KCC is in charge of regulations applicable to TBOs online service providers. The PIPC has been actively inspecting data and PPs that provide general programming or specialised program- privacy policies and related practices of offshore services, showing ming for news reports. The MSIT, on the other hand, is in charge of considerable alacrity in the role of prime data-privacy regulator role regulations applicable to SBOs, SOs, IPTV operators, ROs, NOs and PPs since assuming it in August 2020. In November 2020, the PIPC also providing home shopping programming or other types of specialised imposed on Facebook some US$6 million in fines for data privacy viola- programmes. tions, the largest ever such fines, and referred the case for possible criminal prosecution. Ownership restrictions In the telecommunications sector, the TBA has been newly fitted 18 Do any foreign ownership restrictions apply to media with an extraterritorial jurisdiction clause, expressly extending TBA services? Is the ownership or control of broadcasters provisions to offshore service providers if their services impact users otherwise restricted? Are there any regulations in relation in South Korea. The amendment is noteworthy in potentially justifying to the cross-ownership of media companies, including radio, expanded enforcement, although the TBA was already interpreted by television and newspapers? regulators as encompassing foreign service providers depending on their local effects. Foreign online services that meet certain thresholds In general, there are four main types of ownership restrictions appli- of scale or local usage (prescribed in the Presidential Decree of PIPA) cable to media services: are also required to designate a local data protection representative. • ownership by a specific individual or entity (including his, her or Separately, regulation of digital platforms seems likely to be its related parties, eg, any relative, executive officer or affiliate bolstered soon by the Online Platform Act, currently in review at the company) (related parties); National Assembly, and may also see the adoption of similar changes • ownership between broadcasting business operators; in a proposed amendment of the e-Commerce Act. Administration of • ownership by a conglomerate (including its affiliates), or an entity the Online Platform Act, if passed, would be mainly with the KFTC, the operating daily newspaper or news communications business; and fair competition regulator, but enhanced monitoring and enforcement • ownership by a foreign individual or entity. Details of restrictions could end up partly with the KCC, the chief agency for e-Commerce on foreign ownership are as follows: Act purposes. • operators: maximum permitted percentage of foreign There has been key progress towards a General Data Protection ownership; Regulation (GDPR) adequacy decision for South Korea. The working • TBO: prohibited; draft of the GDPR adequacy decision was announced in April 2021, and • SO: 49 per cent; the final decision is expected to come in late 2021. • SBO: 49 per cent; At the intersection of data protection and artificial intelligence (AI), • IPTV operator: 49 per cent; amid controversy over personal data processing using AI technology, • IPTV contents provider: 20 per cent for those operating general the PIPC is seeing to introduce new guidelines significantly limiting such programming or specialised programmes for news reports; data processing. Understandably, given the stakes, service providers • 49 per cent for other instances (100 per cent ownership is have been at some pains, including in liaison with regulators, to try to permitted for indirect investments through an entity owned narrow or moderate the impending draft guidelines. by the government, an organisation or citizens of a foreign Last, the TBA was amended in June 2020, with effect from country that is a party to a free trade agreement with South December 2020, to require content providers and other VATS providers, Korea and determined and notified by the MSIT to be eligible); meeting certain thresholds of scale, to implement measures to better • PP: 20 per cent for those operating general programmes; ensure ‘convenient and stable provision of services’ to users. These • 10 per cent for those operating specialised programmes for are to include measures to secure stability, handle user grievances and news reports; provide reasonable payment methods for users, and prepare corre- • 49 per cent for others (100 per cent ownership is permitted for sponding internal guidelines. indirect investments through an entity owned by the government, an organisation or citizens of a foreign country that is a

144 Telecoms & Media 2021 © Law Business Research 2021 Bae, Kim & Lee LLC South Korea

party to a free trade agreement with South Korea and deter- specifically for IPTV operators, and no such regulations place such mined and notified by the MSIT to be eligible); obligations on operators of other types of media (eg, online or mobile • RO: 20 per cent; and contents), as these are not considered broadcasting operators under • NO: 49 per cent. South Korean laws. However, there is no minimum content requirement for broad- Regulators have signalled that they will move to liberalise the maximum casting operators concerning domestically produced popular music. thresholds for foreign ownership. Advertising Licensing requirements 21 How is broadcast media advertising regulated? Is online 19 What are the licensing requirements for broadcasting, advertising subject to the same regulation? including the fees payable and the timescale for the necessary authorisations? Broadcast media advertising in South Korea is largely divided into: • programme commercials arranged directly before and after a The licensing requirements are set out in the Broadcast Act and the particular programme; IPTV Act. The Broadcast Act regulates the licensing requirements appli- • commercial breaks arranged in the middle of a particular cable to TBOs, SOs, SBOs and PPs, while the IPTV Act regulates the programme; and licensing requirements applicable to IPTV operators and IPTV content • spot commercials arranged between programmes. providers. Under licensing requirements in the Broadcast Act and the IPTV Other types of broadcast media advertising include commercial Act, any TBO must obtain prior approval from the KCC to carry out captions, time signal commercials, virtual commercials and product terrestrial broadcasting activities, while any IPTV operator, SO and SBO placements. must all obtain prior approval from the MSIT concerning their relevant Under the Enforcement Decree of the Broadcast Act, as amended broadcasting activities. in April 2021, the same restriction applies to all types of broadcasting Among PPs, any PP engaging in general programming, or special- operator – notably, TBOs can now arrange commercial breaks. Broadly ised programming of news reports, must obtain prior approval from speaking, all broadcast media advertising must clearly distinguish the KCC. Any PP that engages in specialised programming featuring advertising from programmes to avoid any confusion and always and marketing products must obtain prior approval from the MSIT. display the caption ‘commercial’ for advertising broadcasts placed PPs engaging in any other broadcasting activities must register before and after any programme mainly viewed by children under the with the MSIT. age of 13 years, so that children may distinguish programmes from In general, IPTV content providers must register or report to the commercials. MSIT, except that IPTV content providers focused on news reporting or Also, broadcast media advertising of products such as alcohol and general programming must obtain prior approval from the KCC. IPTV tobacco is subject to restrictions under separate laws, apart from the content providers focused on presenting and selling goods must obtain Broadcast Act. prior approval from the MSIT. However, value-added telecommunica- Laws governing broadcast media advertising aside from the tions services (VATS) providers, TBOs, SOs, SBOs and PPs are exempt Broadcast Act include the Youth Protection Act and the Act on Fair from the above requirements. However, the exemption applies to SOs Labelling and Advertising. Online advertising is regulated differently to and SBOs only when they provide contents via channels directly oper- broadcast media advertising, as it is governed by the IT Network Act. ated by them. The official fees associated with any one of the approval or reporting Must-carry obligations processes described above would amount to less than 1 million won. 22 Are there regulations specifying a basic package of All broadcasting operators must make contributions to a broad- programmes that must be carried by operators’ broadcasting casting communications development fund. The specific contributions distribution networks? Is there a mechanism for financing the that are required vary depending on the broadcasting operator. In costs of such obligations? principle, the MSIT or the KCC has 30, 60 or 90 days to reach a decision on any application, depending on the type of operator. However, Under the Broadcast Act, the Enforcement Decree of the Broadcast Act as the lapse of time for these periods may be interrupted by requests and the IPTV Act, SOs, SBOs (except for satellite broadcasting opera- for additional information or correction and modification, in practice the tors providing digital multimedia broadcasting) and IPTV operators application process can take significantly longer. must include channels provided by public broadcasting stations such as the Korean Broadcasting System 1 and the Educational Broadcasting Foreign programmes and local content requirements System as part of their basic package. Other terrestrial broadcasters, 20 Are there any regulations concerning the broadcasting such as the Korean Broadcasting System 2, Seoul Broadcasting System of foreign-produced programmes? Do the rules require a and Munhwa Broadcasting Corporation, are not classified as must-carry minimum amount of local content? What types of media fall channels, and fee arrangements for retransmission are negotiated outside this regime? among the relevant operators. Further, an SO, IPTV Operator, General SBO or Satellite Mobile The Broadcast Act, Presidential Decree of the Broadcast Act and the Multimedia Broadcasting Operator must include broadcasting channels Notice on organising broadcasting programmes contain obligations of programme providers engaged in specialised programming for news on broadcast operators to organise specific minimum amounts of reports. Fee arrangements for this obligation are negotiated among the domestically produced programme content, depending on the type operators. of broadcasting operator. The minimum amount is highest for TBOs, followed by SOs and SBOs, and lowest for PPs. However, as IPTV operators are prohibited from operating broadcast channels directly, there is no minimum amount of domestically produced programmes designated www.lexology.com/gtdt 145 © Law Business Research 2021 South Korea Bae, Kim & Lee LLC

Although the concept of traditional broadcast media is fading, there are Aiming for effective regulatory means to cope with new media still different regulations. services As TBOs operate through public funding, they are required under According to the vision and key policy tasks announced by KCC, regula- the Broadcast Act to abide by higher standards relating to publicity and tors plan to: public interest compared to other broadcasting operators. For example, • adopt a horizontally integrated regulatory framework to relax unlike SOs, SBOs or IPTV operators, TBOs are not permitted to have unnecessary regulations interfering with market forces; commercial breaks arranged in the middle of programmes they broad- • create a new concept of media service (audiovisual media service) to cast. The Broadcasting Communication Deliberation Committee, which adapt to the combined media-communication-internet environment, regulates programmes and media advertising, also applies stricter to embrace all types of media including merged media services such standards to broadcasts by TBOs. as over-the-top (OTT) and video on demand (VOD) services; and • provide domestic OTT service providers with production cost Digital switchover support or tax support, etc. to encourage domestic OTTs to have 24 When is the switchover from analogue to digital broadcasting enough capabilities to compete with global OTTs. required or when did it occur? How will radio frequencies freed up by the switchover be reallocated? REGULATORY AGENCIES AND COMPETITION LAW

Only TBOs and SOs traditionally provided analogue broadcasting. TBOs Regulatory agencies completed the switchover to digital broadcasting on 31 December 2012. 28 Which body or bodies regulate the communications and The 700MHz band frequency previously used by TBOs for analogue media sectors? Is the communications regulator separate broadcasting was reallocated to the public disaster broadcasting from the broadcasting or antitrust regulator? Are there system and ultra-high-definition broadcasting. mechanisms to avoid conflicting jurisdiction? Is there a The digital conversion for SOs, on the other hand, is still underway, specific mechanism to ensure the consistent application of but approximately 95 per cent has been completed. competition and sectoral regulation?

Digital formats The agencies with regulatory authority over the communications and 25 Does regulation restrict how broadcasters can use their broadcasting sectors are the Ministry of Science and ICT (MSIT) and the spectrum? Korea Communications Commission (KCC). The MSIT is one of the executive ministries and is directed by the Prime Minister. The KCC is one of the The MSIT’s spectrum allocation system restricts broadcasters’ use of central administrative agencies and is under the control of the President. their spectrums. The MSIT contributes to KCC’s evaluation of a TBO’s licence for the establishment, or renewal of the licence, by examining Communications sector whether specific spectrums can be assigned for that TBO within the • MSIT: regulatory agency supervising the communications business range of spectrum allocated for broadcasters. Following the recent (the Telecommunications Business Act (TBA), the IT Network Act digital switchover of TBOs, some of the resulting vacant spectrum range and Protection of Communications Secrets Act); and was assigned to TBOs’ ultra-high-definition broadcasting. The MSIT • KCC: agency with jurisdiction over the investigation and sanctions assigns spectrum to SBOs, SOs and NOs by a process including public of communications operators’ violations under the TBA, formula- notices of restrictions on uses of spectrum. tion and implementation of policies to protect communications service users, personal information under the IT Network Act, and Media plurality location information under the Act on the Protection, Use, Etc. of 26 Is there any process for assessing or regulating media Location Information. plurality (or a similar concept) in your jurisdiction? May the authorities require companies to take any steps as a result of On a separate note, concerning the authority to regulate personal such an assessment? information under the PIPA, which was originally divided between the Ministry of Interior & Safety and the KCC, the PIPC is currently in charge A single broadcasting business operator and its related parties cannot of overseeing and enforcing these regulations. share audiences that amount to viewer ratings above 30 per cent. Such audience sharing is investigated and calculated by the Media Diversity Broadcasting sector Promotion Committee, a committee established under the KCC. • KCC: regulatory agency supervising the broadcasting industry; If any audience sharing exceeds view ratings of 30 per cent, the • MSIT: agency with licensing authority over satellite broadcasting KCC may order corrective measures, such as a restriction on the oper- operators, system operators (SOs), relay broadcasting operators, ator from further ownership of a broadcasting business, restrictions programme providers (PPs) (excluding PPs engaging in general on commercial airing time or a partial transfer of broadcasting hours, programming or specialised programming of news reports), elec- among possible measures. tric signboard broadcasting operators, CATV music broadcasting operators and signal transmission network business operators (NOs) under the Broadcasting Act; and • Internet Protocol Television (IPTV) operators and IPTV content providers (excluding IPTV content providers focused on news reporting or general programming) under the IPTV Act.

The main antitrust regulator is the Korea Fair Trade Commission (KFTC), having the authority to enforce the Monopoly Regulation and Fair Trade Act (MRFTA). If the KCC has issued corrective measures or imposed administrative penalties upon communications operators and broadcasting operators on grounds of engaging in acts prohibited under the TBA or the Broadcast Act, the KFTC is not allowed to issue corrective measures or impose administrative penalties under the MRFTA based on the same cause of action. Nevertheless, the KFTC tends to attempt to pursue Ji Yeon Park [email protected] enforcement in the broadcast sector under the MRFTA. Concerning any violation of regulations by IPTV operators, the KCC may impose admin- Juho Yoon istrative penalties upon those IPTV operators only after consulting [email protected] with the KFTC. Kwang Hyun Ryoo [email protected] Appeal procedure 29 How can decisions of the regulators be challenged and on what bases? Centropolis Tower B 26 Ujeongguk-ro, Jongno-gu Seoul 03161 An administrative appeal may be filed with: Korea • the Central Administrative Appeals Commission in the case of Tel: +82 2 3404 0000 dispositions and other actions taken by the MSIT, including the Fax: +82 2 3404 0001 refusal of a permit, for example; and www.bkl.co.kr • an administrative appeals commission established under the KCC in the case of dispositions and other actions by the KCC.

In addition to such administrative agency level appeals, or in lieu of innovation-based sectors, such as semiconductor and IT, may restrict them, the dissatisfied parties may file an administrative lawsuit to the dynamic competition. The major amendments include: court in respect of the action by the MSIT or KCC. • inclusion of a clause to define information assets; • adoption of a method for demarcating relevant markets, in Competition law developments examining mergers and acquisitions (M&A) in innovation-based 30 Describe the main competition law trends and key merger industries; and antitrust decisions in the communications and media • standards for calculating market concentration in innovative sectors in your jurisdiction over the past year. markets; and • further standards for examining the effect of restricting competi- The KFTC issued a corrective measure on 18 July 2016, to prohibit: tion, from M&A in such innovation-based industries. • the acquisition of an SO by a core telecommunications services (CTS) provider; and The KFTC has also been closely monitoring business practices in the • the subsequent merger of an IPTV operator (CTS provider’s IT sector. More specifically, the KFTC has launched a special task subsidiary) and the same SO, on the ground that such a merger force to help police unfair business practices in the IT sector, particu- would constitute a corporate consolidation that would substan- larly concerning digital platforms and mobile apps, along with holders tially restrict competition in certain transactions. of communications-related standard-essential patents (SEPs). The Information and Communication Technology (or ICT) Sector Investigative The KFTC’s rationale was that such a merger, based on the pay TV Task Force devoted its first meeting, on 15 November 2019, mainly to market demarcated for each region, would result in an excessively questions surrounding the use of room-rate parity (or most favoured high concentration in each regional pay TV market. In January 2019, nation) clauses in online travel agency contracts for accommodation however, the chairperson of the KFTC said in a media interview that listings. The task force, comprising KFTC officials from various depart- the KFTC will take a forward-looking approach with regard to corporate ments, is to convene regularly to monitor and coordinate investigations. consolidation with the above-mentioned SO. In March 2019, another CTS The KFTC says its task force will focus for now, on unfair practices (eg, provider took advantage of such lenient attitude taken by the KFTC and exclusionary tactics and tying) in the context of: attempted to acquire the same SO, and finally passed through regula- • digital platforms expanding dominance in one market into an tory hurdles in mid-December 2019. Separately, the IPTV operator that adjacent one; had previously failed to merge with the abovementioned SO in 2016, • mobile app service providers impeding market entry by tried to merge with another SO and, in mid-December 2019, was also competitors; and able to obtain approval from the regulatory authorities. • SEP holders seeking to impair competition or impose higher Relevant regulatory bodies, including the KFTC’s change in stance royalties. between 2016 and 2019, seem to partially arise from the consideration of rapidly changing media markets or of the possibility that there may be severe competition in domestic media markets with the influx of major foreign over-the-top service providers, such as Netflix and Disney. On 27 February 2019, the KFTC adopted amended Examination Standards for Corporate Consolidation (amended on 27 February 2019, by KFTC Announcement No. 2019-1) to clarify how M&A in www.lexology.com/gtdt 147 © Law Business Research 2021 South Korea Bae, Kim & Lee LLC

The Act on Prevention and Management of Infectious Diseases was amended in 2020 to further permit the sharing of personal information in the context of disease prevention. Under the statute, as amended, if necessary to prevent infectious diseases such as the covid-19 virus and to block the spread of infection, the Commissioner of the Korea Disease Control and Prevention Agency (KDCPA), or local mayors or governors, may require companies to furnish personal information of infected patients or suspected patients. Such personal information may encompass a broad scope, including basic information (eg, name, resident registration number, address and phone number, etc) to medical data (eg, prescriptions and medical records) and financial information (eg, credit-card records), for the purposes of tracking movement. The amended statute also allows the Commissioner of the KDCPA to share such information, once obtained, with a range of designated government agencies and healthcare institutions. While it seems companies are increasingly looking to collect pandemic-related information from employees, such as symptoms and vaccination status, such facts are categorised under the PIPA as sensitive personal information. To lawfully collect and process such information, voluntary opt-in consents must be obtained from the data subjects, coupled with disclosure to them of pertinent details as prescribed under the PIPA. Such consents are typically obtained right at the entrance to the business premises.

Mario Strebel and Fabian Koch CORE Attorneys Ltd

COMMUNICATIONS POLICY As an exception, registration is still required where the use of certain addressing elements and radio frequencies require a licence. Regulatory and institutional structure Under the applicable regulatory framework, licences are still 1 Summarise the regulatory framework for the communications mandatory for the use of mobile radio frequencies for the provision of sector. Do any foreign ownership restrictions apply to telecommunication services and the provision of universal services. communications services? Frequency licences are issued either by criteria competition or, more commonly, by frequency auction. Importantly, in the absence of detailed The telecommunications sector in Switzerland is regulated at the federal principles for the granting of mobile radio frequency licences, the authori- level, the main sources of law being: ties have considerable discretion in setting the allocation or auction rules • the Federal Act on Telecommunications (TCA) of 30 April 1997, with respectively. However, the authorities have to exercise their discretion a first partial revision introduced in 2007, as last amended on 1 dutifully – that is, in line with the constitutional principles and the legal January 2021; and purpose of the TCA. Importantly, the general rules on public procurement • the Federal Ordinance on Telecommunications Services (OTS) of 9 do not apply. Licences are granted only if, having regard to the national March 2007, as last amended on 1 January 2021. frequency allocation plan, enough frequencies are available. Special rules apply if the broadcaster of a radio programme service The TCA regulates the transmission of information through telecommu- is granted a licence under the Federal Act on Radio and Television (RTVA) nications techniques, including the transmission of radio and television of 24 March 2006, as last amended on 1 January 2021. programme services. Its main purpose is to ensure that a range of Such licences can be acquired only by a person that has the cost-effective, high-quality telecommunications services are available in necessary technical capacities and, if required, the relevant proficiency Switzerland that are competitive both on a national and international level. certificate. Also, such a person has to commit itself to comply with the The OTS contains detailed rules that implement the provisions of the TCA. applicable legislation, in particular, the TCA, the RTVA, their implementing Within this regulatory framework, the Federal Communications provisions and the licence conditions. Depending on the kind of licence Commission (ComCom) acts as the independent licensing and market required, eligibility, documentary and procedural requirements vary. regulatory authority for the communications sector. Its main activities and Certain foreign ownership restrictions may apply. competencies relate, in particular, to the granting of licences for the use Applications and notifications can be submitted online via of radio communication frequencies as well as the regulation of the terms OFCOM’s website. of application of number portability and free choice of supplier. ComCom According to the TCA, licences for radio communication and instructs the Federal Office of Communications (OFCOM) concerning universal services are of limited duration. In 2012, licences for frequency the preparation of its business and the implementation of its decisions. spectrum were allocated in a public-tender procedure. In early 2019, Moreover, it has delegated some of its tasks to OFCOM. additional frequencies, particularly for the introduction of the next-gener- Certain foreign ownership restrictions may apply. In the absence of ation network 5G, were auctioned. All licences are issued in a technology any international commitments to the contrary, ComCom or OFCOM, as neutral manner. The licences allocated in 2012 will expire at the end of the case may be, may prohibit undertakings incorporated under foreign 2028 and the licences allocated in 2019 will expire at the end of 2028 law from using radio frequencies or addressing resources (as defined in or 2033, respectively. The universal service licence for Swisscom was the TCA) in Switzerland unless reciprocal rights are granted. Under the renewed for 2018 to 2022 (ie, five years). same conditions, they can be refused to be granted a licence or can be Concerning fees, the licensing authority charges administration and prohibited from transferring a licence. licence fees for radio communication licences. No licence fee is charged on radio licences for the distribution of licenced radio and television Authorisation/licensing regime programmes under the RTVA. Additionally, the Federal Council may 2 Describe the authorisation or licensing regime. exempt certain governmental and non-governmental organisations from paying the licence fee provided they do not perform telecommunications Under the revised TCA that came into force on 1 January 2021, the services and make rational use of the frequency spectrum. general notification obligation for telecommunications service providers The Federal Ordinance on Telecommunications Fees issued by the concerning their telecommunications services has been eliminated. Federal Council lays down the radio licence and administrative charges in Therefore, to the benefit of telecommunication service providers such as the field of telecommunications law. over-the-top services including Voice over Internet Protocol or Internet The timeframes for obtaining a licence or authorisation depend on Protocol television services, the frequency spectrum may be used freely the telecommunications services to be provided. If a mere registration under the TCA within the limits of the applicable regulations. Further, the applies without the granting of a licence, such notification can be effected revised TCA provides for a legal basis for frequency sharing and trading. via the internet within a very short period (ie, within hours). www.lexology.com/gtdt 149 © Law Business Research 2021 Switzerland CORE Attorneys Ltd

Flexibility in spectrum use • have the necessary technical capacities; 3 Do spectrum licences generally specify the permitted use • furnish convincing proof that the universal service can be offered, or is permitted use (fully or partly) unrestricted? Is licensed particularly concerning finance and the operation of the service for spectrum tradable or assignable? the entire duration of the licence; • state what financial compensation will be required for doing so; Radio communication licences do specify the permitted use (eg, radio, • undertake to comply with the applicable legislation, in particular, television, amateur radio) and different rules on the trading and the TCA and its implementing provisions and the licence returning of allocated radio frequency spectrum apply. Under the TCA, conditions; and frequency sharing and trading is legal subject to the following require- • undertake to comply with the applicable labour laws and to guar- ments. Licences can be transferred, in whole or in part. However, such antee customary working conditions. transfers require the prior consent of the licensing authority. The authority may only refuse such consent if either the licence require- For universal service licences, the Federal Council decides on quality ments are not complied with or the efficient use of frequencies free criteria, periodically reviews the universal service catalogue, and fixes from interference is not guaranteed. Further, the licensing authority upper limits for the prices of the services of the universal service that may permit exceptions from the requirement of consent for individual apply uniformly for the entire licence area. The universal service criteria frequency bands if it is anticipated that the efficient use of frequencies are determined based on market developments – that is, on new needs free from interference will be guaranteed and if effective competition and technological progress. is neither eliminated nor seriously restricted. Advance notice must be From 1 January 2020, universal service includes: given to the licensing authority of transfers that do not require consent. • public telephone services; If the licence has been granted by ComCom, the transfer rules as • access to the internet with a minimum data transmission rate described previously also apply by analogy to the economic transfer of of 10/1Mbps; a licence, which occurs in the case of ‘acquisition of control’, as defined • services for the hearing impaired; and in the Federal Cartel Act. • directory and operator services for the visually impaired and Where holders of licences granted by the ComCom make joint people with limited mobility. use of components of radio communications networks, they must give advance notice of this to ComCom and the joint use of frequencies To date, new technologies such as fibre optic or mobile phone services requires its prior consent. are not included in the universal service. There is no specific regulatory framework for the assignment of On 19 May 2017, ComCom decided that the universal service unused radio spectrum. OFCOM is responsible for the management of concerning telecommunications will continue to be provided by the radio spectrum and establishes the National Frequency Allocation Swisscom, and awarded the licence to Swisscom for the period 2018 to Plan that is approved by the Federal Council. 2022 (ie, five years). If it is shown before the licence is granted that it will not be possible Ex-ante regulatory obligations to cover the costs of the provision of the universal service in a given 4 Which communications markets and segments are subject to area even with efficient management, the licensee is entitled to financial ex-ante regulation? What remedies may be imposed? compensation. The compensation would be financed by levying a fee on all telecommunications service providers. To date, no such compensa- In principle, the telecommunications regulation in Switzerland is based tion has been awarded. on ex-post regulation. Number allocation and portability Structural or functional separation 7 Describe the number allocation scheme and number 5 Is there a legal basis for requiring structural or functional portability regime in your jurisdiction. separation between an operator’s network and service activities? Has structural or functional separation been The Federal Council shall issue regulations on the management of introduced or is it being contemplated? addressing resources, and, in particular, on: • their allocation, use, blocking, transfer and withdrawal; No legal basis for a structural separation between an operator’s network • the issuing of numbering plans; and service activities exists, and the introduction of such a legal basis is • the delegation of management to third parties, the termination of currently not contemplated. the delegated activity and the supervision of the same; • sub-allocation; and Universal service obligations and financing • number portability. 6 Outline any universal service obligations. How is provision of these services financed? OFCOM shall manage the addressing resources that must be managed at the national level. In special cases, OFCOM may delegate the manage- ComCom awards one or more universal service licence to telecommuni- ment of certain addressing resources to third parties, in principle cations service providers wishing to provide a universal service for the by tender. whole population in all parts of Switzerland. In principle, there is no obli- The numbering scheme under the national numbering plan allows gation to provide a universal service. However, if no provider applies for number portability between telecommunications service providers a universal service licence, ComCom may appoint one or more provider offering the same category of telecommunications services. Within such as a universal service provider. The licence may only be transferred to a categories, telecommunications service providers shall ensure number third party, whole or in part, with ComCom’s approval. portability. Universal service licences are put out to tender and awarded based Telecommunications service providers that are required to ensure on a criteria competition. The Swiss laws on public procurement do not number portability must bear their own costs. However, a telecommu- apply. Any person wishing to obtain a universal service licence must: nications service provider that passes a number to another can demand

150 Telecoms & Media 2021 © Law Business Research 2021 CORE Attorneys Ltd Switzerland that the latter contributes to the administrative costs. The costs of • comply with an express customer request; or transmitting a passed-on number to its destination are to be defined in • to combat temporary and exceptional network congestion; in doing interconnection agreements between the telecommunications service so, equivalent forms of data traffic shall be treated equally. providers. If there is no agreement, the procedural rules of interconnection apply by analogy. The new telecommunications service providers Further, in the case of special services, it is possible to design offers can pass part of the costs of number portability to the subscriber. To flexibly to meet the quality requirements of customers and as long as grant fast number portability, donor service providers are required to this does not degrade the quality of the internet connection. These are confirm number porting applications to the recipient service providers services offered in addition to the internet connection that is transmitted within one working day. via the same network, for example, internet-based telephony (eg, VoIP) The TCA regulates the management of internet domains sepa- or television services (eg, IPTV). rately. In principle, as for addressing resources in general, OFCOM shall An essential element of the fundamental net neutrality obligation manage internet domains if the Swiss Confederation is responsible for is also that the corresponding providers must inform their customers their management. and the public if they treat information differently during transmission, either technically or economically. Customer terms and conditions 8 Are customer terms and conditions in the communications Platform regulation sector subject to specific rules? 10 Is there specific legislation or regulation in place, and have there been any enforcement initiatives relating to digital The market for end-customer prices is, in general, not subject to ex platforms? ante price regulation. However, there exist few exemptions to this rule. According to the TCA, the Federal Council shall periodically fix upper No specific legislation or regulation exists. Even though the Federal limits for the prices of the services of the universal service. In the area Council has, in principle, identified the need for clarification concerning of international roaming, the Federal Council can issue regulations to platform regulation in the recent TCA revision, this issue is not specifi- avoid disproportionately high end-user tariffs and take measures to cally addressed in the revised TCA. promote competition, inter alia, by the setting of price ceilings. The same applies to value-added services to prevent abuses. Next-Generation-Access (NGA) networks Accordingly, agreements with end users are not subject to specific 11 Are there specific regulatory obligations applicable to telecommunications regulation. However, agreements and the conclu- NGA networks? Is there a government financial scheme to sion of such agreements must adhere to mandatory Swiss law. The promote basic broadband or NGA broadband penetration? starting point for any query concerning the conclusion and dissolu- tion of a contract, as well as faults of performances, is the Swiss Code Swiss legislation on telecommunications is, as a rule, technology-neutral of Obligations (CO). Particularly relevant in a consumer protection and does not contain any specific definitions referring to next-genera- context are also: tion access networks. Accordingly, these are, in principle, subject to the • article 8 of the Federal Act Against Unfair Competition (UCA) of provisions of the TCA. 19 December 1986, as last amended on 1 January 2021, which There is no federal scheme to promote broadband penetration. prohibits the use of abusive general terms and conditions; and Aside from Swiss telecommunications providers, some local authorities • articles 40a et seq of the CO and the Federal Consumer Credit Act, actively support the development of broadband networks. For example, which govern the consumer’s right to withdraw from a contract the city of Zurich has assigned financial means to its own electric utility within 14 days under certain conditions. to build an area-wide fibre optic network and the responsible department in the canton of Grisons wants to advance the development of Also, how prices for telecommunications services and, in particular, ultra-high broadband in its area. Further, because of the rather stag- value-added services are announced in writing and advertising for nant expansion of fibre-to-the-home or high-bandwidth networks, such services are set out in the Ordinance on the Disclosure of Prices respectively, in recent years and the considerable regional disparities of and specific provisions concerning customer data retention and secu- the current network coverage within and between cantons, the canton rity apply. of Ticino submitted a legislative initiative at the federal level in April 2016. The initiative aims at guaranteeing dense high-speed broadband Net neutrality coverage throughout Switzerland and calls on the Swiss Confederation 9 Are there limits on an internet service provider’s freedom to to intervene actively within the framework of its powers in those areas control or prioritise the type or source of data that it delivers? in which the high-speed broadband networks are not being imple- Are there any other specific regulations or guidelines on net mented by the telecommunications service providers. In this context, neutrality? direct financing or a redefinition of the universal service are being considered and proposed as instruments. The deadline for drafting a Within the framework of the recent TCA revision, an open internet was bill was extended by two years in February 2021, ie, until the summer a central concern. Since 1 January 2021, network neutrality is regulated session of 2023. by law, with some exceptions. Further, the holder of the universal service licence, currently Providers of internet access must transmit information without the incumbent operator Swisscom, is, inter alia, obliged to provide a making any technical or economic distinction between senders, broadband internet connection with at least a 10/1Mbps transmission receivers, content, services, service classes, protocols, applications, speed to all households in Switzerland, in addition to the telephone programmes or terminals. They may transfer information differently connections. only if this is necessary to: • comply with a legal requirement or a court ruling; • ensure the integrity or security of the network or the services provided over it or of the terminals connected; www.lexology.com/gtdt 151 © Law Business Research 2021 Switzerland CORE Attorneys Ltd

Data protection • operation of the national Computer Emergency Response Team 12 Is there a specific data protection regime applicable to the (GovCERT) as a technical expertise hub; communications sector? • operational incident management in the event of serious cyber incidents; According to article 43 of the TCA, telecommunications service • office of the Federal Cyber Security Delegate; providers are subject to a general confidentiality obligation. Thus, they • federal information and communications technology security unit; are not allowed to disclose to a third party any information relating • operation of a pool of experts to support the specialist offices in to a subscriber’s communications or provide anyone else the oppor- developing and implementing cybersecurity standards; tunity to do so. However, the Federal Act on the Surveillance of Post • cooperation with scientific and research bodies; and and Telecommunications and its related ordinance set out the rules and • international specialist cooperation. procedure concerning the interception of communications and access to consumer communications data by the competent authorities. In December 2019, the Federal Council approved the report ‘Options for Subscribers must be granted access to the data on which invoices critical infrastructure reporting duties in the case of serious security inci- are based, in particular, the addressing resources, the times when calls dents’, which describes the core issues concerning the introduction of were made and when payments are due. Moreover, anyone requiring reporting duties and describes possible models for their implementation. this data to trace nuisance calls or unfair mass advertising must be At the end of 2020, the Federal Council confirmed its intention to introduce informed of the name and address of the subscribers whose lines were a general obligation to report cyber-attacks. The Federal Department of used for such calls. Finance (FDF) must prepare a corresponding consultation draft by the Under the TCA, telecommunications service providers may end of 2021. This should regulate which of the critical infrastructures process customer location data only for the provision of telecommuni- such as energy, food, health, security technology, telecommunications cations services and for charging purposes. The processing of data for and water supply must report which incidents precisely and within what other services requires the prior consent of customers or anonymous timeframe. Additionally, a central reporting office shall be created. processing. Under the TCA, which came into force on 1 January 2021, telecom- Also, the Federal Act on Data Protection (FADP) of 19 June 1992, munications providers are required to combat cyber-attacks, defined as last amended 1 March 2019, applies. The FADP aims to protect the exclusively as manipulations through telecommunications transmis- privacy and the fundamental rights of (natural and legal) persons when sions, such as the distribution of malicious software or the impairment their data is processed by private persons or federal bodies. of web services (distributed denial-of-service attacks). Physical access Anyone who processes personal data must not unlawfully breach and backdoors in hardware and software are not covered. To combat the privacy of the data subjects in doing so. In particular, he or she must cyber-attacks or to protect the installations, telecommunications service not process personal data in contradiction to the principles of the FADP, providers are authorised to reroute or prevent connections and suppress process data pertaining to a person against that person’s express wish information. If these precautions defeat their purpose, the Federal Council without justification or disclose sensitive personal data or personality is also empowered to issue further regulations to protect the security profiles to third parties without justification. of information and telecommunications infrastructures and services, in The principles of the FADP are, among others, that personal data particular, concerning the availability and operation of installations or may only be processed lawfully, that its processing must be carried ensuring redundant infrastructures and the reporting of faults. out in good faith and must be proportionate and that the purpose of its processing must be evident to the data subject. The Swiss parliament Big data adopted a total revision of the FADP on 25 September 2020. The adap- 14 Is there specific legislation or regulation in place, and have tation of the implementing provisions in the ordinances to the FADP is there been any enforcement initiatives in your jurisdiction, ongoing and the new law is not in force to date. addressing the legal challenges raised by big data?

Cybersecurity The FADP and the TCA contain provisions regarding the issue of data 13 Is there specific legislation or regulation in place protection. The respective provisions, in principle, also apply to big data. concerning cybersecurity or network security in your However, because most databases contain ‘anonymised’ and, therefore, jurisdiction? theoretically not personally identifiable information as regulated in the FADP and the TCA, addressing legal issues with big data remains a legal In 2012, the Federal Council approved the ‘National strategy for the area with many uncertainties. protection of Switzerland against cyber risks’ (NCS), which specifies the The Swiss parliament adopted a total revision of the FADP on 25 various risks that originate from cyberspace, identifies weaknesses and September 2020. Changes in particular relate to the area of information, describes how Switzerland is going to proceed in this matter. The NCS documentation and notification obligations, automated decisions and is reflected in the Federal Act on the Intelligence Service, allowing the criminal penalties. The adaptation of the implementing provisions in the Federal Police to monitor the internet proactively. ordinances to the FADP is ongoing and the new law is not in force to date. In 2018, the Federal Council adopted the new national strategy for the protection of Switzerland against cyber risks (second NCS) for the Data localisation period 2018 to 2022, containing a total of 28 measures regarding cyber 15 Are there any laws or regulations that require data to be risks. To support the general public and businesses against cyber risks stored locally in the jurisdiction? and improve the security of its own systems, on 30 January 2019, the Federal Council decided to set up a competence centre for cybersecu- The FADP aims to protect the private sphere of (natural and legal) persons rity, the National Cyber Security Centre. The core of the centre is made regarding data processing carried out in Switzerland. Concerning the up of the Reporting and Analysis Centre for Information Assurance and transfer of data abroad, strict obligations apply. Certain data transmis- is being designed to take on the following tasks: sions abroad must be announced to the Federal Data Protection and • provision of a national contact point for questions on cyber risks Information Commissioner. Further, sector-specific regulation may stipu- and reporting cyber incidents; late additional requirements or even prohibit the transfer of data abroad.

Key trends and expected changes The broadcasting sector has three main authorities responsible for 16 Summarise the key emerging trends and hot topics in the granting of licences. The Federal Council is the licensing authority communications regulation in your jurisdiction. for the Swiss Broadcasting Company (SBC). Concerning other licences, the licensing competence has been delegated to the Federal Department The spread of the internet has profoundly transformed the telecom- of the Environment, Transport, Energy and Communications (DETEC). munications landscape, including in Switzerland. It has undergone The Federal Office of Communications (OFCOM) puts the licences out extremely rapid developments in recent years. Against this background, for tender and consults interested groups. the Federal Council has recognised the need for a revision of the TCA OFCOM further fulfils all sovereign and regulatory tasks related and issued a dispatch in that regard on 6 September 2017. After several to the telecommunications and broadcasting (radio and televi- deliberations, the Swiss parliament approved the TCA that, largely, sion) sectors. It fulfils an advisory and coordinating function for the entered into force on 1 January 2021. The revised TCA has thus already public and policymakers. It also guarantees that basic services will incorporated the latest developments and trends in the Swiss commu- be provided in all parts of the country and for all sections of the nications regulation. population. With the revision of the TCA, amendments to the UCA of 19 The Federal Media Commission advises the Federal Council and December 1986, as last amended on 1 January 2021, were implemented the Federal Administration concerning media issues. It is operational to strengthen consumer protection. In particular, stricter regulations since August 2013 and currently consists of 15 representatives from apply to advertising calls. Targeting conduct such as spoofing (ie, a various areas of the Swiss media sector. scam strategy that includes disguised communication), advertisers are The RTVA provides for an Independent Complaints Authority for now obliged to use and also display telephone numbers in advertising Radio and Television. This authority deals with complaints that relate calls that are entered into the telephone directory and that they are to the editorial programme and rules on disputes on denied access to entitled to use (article 3, paragraph 1, letter v of the UCA). Also, not a programme. only those who make such unfair advertising calls themselves but also those who make use of the information obtained from such calls are Ownership restrictions acting unfairly under the revised regulation and could be prosecuted 18 Do any foreign ownership restrictions apply to media (article 3 paragraph 1 letter w of the UCA). Moreover, from 1 July 2021, services? Is the ownership or control of broadcasters unfair advertising calls will also be covered by the obligation to combat otherwise restricted? Are there any regulations in relation spam (article 45a of the TCA). Another important point of the revision to the cross-ownership of media companies, including radio, is contained in article 26a of the UCA and deals with the revocation or television and newspapers? blocking of domain names and telephone numbers. Accordingly, responsible public prosecutor’s offices and courts may revoke or block domain Certain foreign ownership restrictions may apply. In the absence of names and telephone numbers in the case of criminal offences under any international commitments to the contrary, licences for broad- article 23 in conjunction with article 3 or article 24 of the UCA (viola- casting may be refused to natural persons without Swiss citizenship, tion of the obligation to disclose prices to consumers including the to companies with foreign control or Swiss companies with foreign Ordinance on Price Indication (PIO) (in German only)) respectively, to participation unless reciprocal rights to Swiss citizens or Swiss prevent new violations of domain names or telephone numbers. They companies are granted. may do so regardless of the criminal liability of a particular person Also, the licence granted to broadcasters of radio and television connected therewith. Accordingly, these amendments are far-reaching programme services may only be transferred with prior approval of the and could entail consequences under both civil and criminal law. licensing authority. The latter examines whether the licence require- Telecommunications service providers should therefore review their ments are also met after the transfer. The economic transfer of the compliance measures and processes concerning the new rules where licence (ie, the transfer of more than 20 per cent of the share capital of necessary. the voting rights or, where applicable, the participating capital of the Finally, against the background of the rapidly developing, tech- licensee) is also deemed to constitute such a transfer. nology driven markets of the data economy and ever-closer integration Concerning cross-ownership, the RTVA provides that – except and conversion of communication channels, the need for further revi- for the SBC – a media corporation may not receive more than two sions of the existing regulation is likely to become apparent in the radio and two television licences. Also, the participation of the SBC in near future. other companies that are broadcasting radio or television programmes requires the approval of DETEC. MEDIA Licensing requirements Regulatory and institutional structure 19 What are the licensing requirements for broadcasting, 17 Summarise the regulatory framework for the media sector in including the fees payable and the timescale for the your jurisdiction. necessary authorisations?

In Switzerland, apart from the communications sector, regulation of the Broadcasters of programme services are, in principle, required to media sector is also dealt with at a federal level, the main sources of obtain a licence. However, broadcasters that request neither a share of law being: fees nor guaranteed wireless terrestrial distribution can operate their • the Federal Act on Radio and Television (RTVA) of 24 March 2006, as service without a licence upon a mere prior notification to OFCOM. last amended on 1 January 2021; and Also, broadcasters of programme services of minor editorial impor- • the Federal Ordinance on Radio and Television (RTVO) of 9 March tance (eg, programme services that can only be received by fewer than 2007, as last amended on 1 January 2021, and related decrees. 1,000 devices at the same time) do not fall under the scope of the RTVA and, hence, need neither a licence nor a registration. The RTVA regulates the broadcasting, processing, transmission and The Federal Council is the licensing authority for the SBC that is reception of radio and television programme services. subject to a special licence with an extensive mandate. www.lexology.com/gtdt 153 © Law Business Research 2021 Switzerland CORE Attorneys Ltd

Concerning the other licences, the licensing competence has been obligations regarding local and regional content. Traditional online as delegated to DETEC. A broadcaster of a radio programme service that well as traditional mobile content providers are in principle not subject has obtained a licence under the RTVA is not required to apply sepa- to this regime. rately for a licence under the Federal Act on Telecommunications (TCA) for use of the frequency spectrum. Such licence is deemed to Advertising be granted at the same time in parallel. Cable television operators are 21 How is broadcast media advertising regulated? Is online under a duty to broadcast in the respective coverage area television advertising subject to the same regulation? programme services of broadcasters that have been granted a licence. Licences are awarded by way of public tender. To be awarded a licence, Swiss law provides for both rules on advertising in general and specific the applicant must: rules for advertising in broadcast media. • be able to fulfil the mandate; The Federal Act Against Unfair Competition (UCA) of 19 December • possess sound financial standing; 1986, as last amended on 1 January 2021, contains several general • be transparent about its owners; provisions on advertising. It provides, in particular, that any advertise- • guarantee that it complies with the applicable labour laws and ment that is deceptive or in any other way infringes the principle of customary working conditions, the applicable law and, in particular, good faith and affects the relationship between competitors or between the obligations and conditions associated with the licence; suppliers and customers is deemed unfair and unlawful. Also, the • maintain a separation of editorial and economic activity; and advertisement industry has installed soft law rules and established the • have residence or registered offices in Switzerland. Commission on Integrity in Commercial Communication. Such commission is a respected monitoring organisation that handles complaints Except for the SBC, the number of licences a broadcaster and its from both consumers and competitors. It bases its decision on its own group companies may acquire is limited to a maximum of two televi- guidelines. sion and two radio licences. In the case of several applicants for one In addition to these general regulations, broadcast media adver- licence, the one that is best able to fulfil the performance mandate shall tising (form and content) is subject to the specific sector regulation as be preferred. In the case of equivalent candidates, the one that best provided in the RTVA and RTVO. promotes diversity of opinion and offerings shall be preferred. In prac- Regarding the form of advertising, it must be clearly separated from tice, DETEC often deems independent applicants that do not belong to a the editorial programmes and clearly identifiable as such. In particular, media group that already possesses other broadcasting licences to be both the beginning and end of an advertising slot must be indicated by a better able to fulfil this criterion. clear visual or acoustic marker. An advertisement that lasts longer than The annual fee for a broadcasting licence amounts to 0.5 per cent a minute must be clearly identified as such for reasons of transparency. of the gross advertising revenue that exceeds 500,000 Swiss francs. While surreptitious advertising is always illegal, product place- Further, administrative charges will incur concerning the radio and ment may be allowed if it fits into the dramaturgy of a programme and television licence as well as to the telecommunications licence. These is clearly declared as sponsorship. charges are calculated based on time spent. A reduced hourly rate The broadcasters’ regular editorial employees are prohibited from applies to the granting, amending or cancelling of a licence for the appearing in advertising programmes. Local and regional broadcasters broadcasting of a radio or television programme service as well as for with limited financial resources are exempt from this restriction. the radio communication licence. Further, there are scheduling and airtime restrictions for radio and television advertising. Depending on the type of programme (eg, Foreign programmes and local content requirements cinematographic film, documentaries, news programmes, programmes 20 Are there any regulations concerning the broadcasting with religious content, series or children’s programmes), different of foreign-produced programmes? Do the rules require a scheduling restrictions apply. Stricter restrictions apply to the SBC. As minimum amount of local content? What types of media fall regards advertising transmission time, advertising, in general, may not outside this regime? account for more than 20 per cent (ie, 12 minutes) of one hour’s transmission time, subject to exemptions for non-licensed radio programme Like all programmes, foreign-produced programmes must comply services and non-licensed television programme services that cannot with the minimum requirements for programme service content. In be received outside of Switzerland. particular, to respect the fundamental rights, they must respect human The RTVO contains provisions on the use of new forms of advertising dignity and be neither discriminatory nor contribute to racial hatred, such as split-screen, interactive and virtual advertising (ie, the insertion endanger public morals or glorify or trivialise violence. of advertisements into an existing image through post-production). Further, broadcasters of a national or regional-language In terms of content, the RTVA prohibits advertising for certain programme service window in a foreign television programme service groups of products and services on radio and television, including that broadcasts films may be obliged to spend at least 4 per cent of their tobacco products, certain alcoholic beverages, therapeutic products and gross revenue on the purchase, production or co-production of Swiss political parties. Advertising is also prohibited if it disparages religious films or pay a corresponding support fee not exceeding 4 per cent if they or political beliefs, is misleading or unfair or encourages behaviour meet certain requirements. that is detrimental to health, the environment or personal safety. Less In addition, Broadcasters may be granted a licence for national restrictive rules apply to private broadcasters, in particular, concerning and language region-specific programmes. These licences may contain commercial breaks and product placement. obligations concerning the portion of own productions and Swiss There is no specific regulation for online advertising as traditional productions, in particular, Swiss films. online content is, in principle, not covered by the RTVA. Therefore, Local and regional providers of radio and television programme subject to certain exceptions, online advertising is only subject to the services must primarily consider the particular characteristics of their general advertising rules of the UCA. service area. They must contribute to the forming of opinion on topics of local and regional social life and the promotion of cultural life in the service area. Therefore, the respective licences contain specific

Must-carry obligations new broadcasting technologies and, in particular, to alleviate a possible 22 Are there regulations specifying a basic package of financial burden from such a parallel setup, OFCOM may provide finan- programmes that must be carried by operators’ broadcasting cial help to licensed broadcasters in the case of insufficient resources in distribution networks? Is there a mechanism for financing the the relevant area. The necessary funds are generated by licensing and costs of such obligations? consumer fees.

Concerning must-carry obligations, the RTVA distinguishes between Digital formats broadcasting distribution networks that transmit content via wireless 25 Does regulation restrict how broadcasters can use their terrestrial broadcasting and wire. spectrum? In the case of wireless terrestrial broadcasting, the programme services of the SBC and the programme services of broadcasters that In Switzerland, no specific rules for digital formats exist. Digital broad- hold a licence with a performance mandate are entitled to access the casting is subject to the general rules of Swiss law. Digital formats that network. Broadcasters pay the owner of a radio communication licence meet the legal definition of a programme service (ie, content that is a cost-based compensation for the broadcasting. delivered as a continuous sequence of broadcasts that are transmitted In the case of transmission by wire, in addition to the above- at certain times only and addressed to the general public) are, in prin- mentioned programme services, the Federal Council has defined the ciple, covered by the RTVA. programme services of foreign broadcasters that are to be transmitted by wire because of their special contribution to education, cultural Media plurality development or free formation of opinion. In addition, OFCOM may, at 26 Is there any process for assessing or regulating media the request of a broadcaster and under certain conditions, require a plurality (or a similar concept) in your jurisdiction? May the telecommunications service provider for a certain period to provide authorities require companies to take any steps as a result of broadcasting by wire of a programme service within a specific area. The such an assessment? RTVO provides for a maximum number of programme services to be broadcast free of charge by wire. Except for the SBC, the number of licences a broadcaster and its group companies may acquire is limited to a maximum of two television and Regulation of new media content two radio licences. 23 Is new media content and its delivery regulated differently Also, there are measures against media concentration once a from traditional broadcast media? How? licence has been granted. However, these measures are only applicable if an undertaking abuses its dominant position. In such cases, DETEC No specific rules or regulations exist concerning the provision of tradi- consults the Swiss Competition Commission (COMCO). If the report of tional online content (websites, newsgroups and blogs, etc). However, COMCO ascertains that a dominant undertaking jeopardises diversity of general laws such as the UCA, the Federal Criminal Code and the laws opinion and offerings as a result of an abuse of its dominant position, that protect intellectual property rights, etc, apply. Online content that DETEC may demand that the undertaking concerned: meets the legal definition of a programme service (ie, content that is • ensures diversity by measures such as granting broadcasting delivered as a continuous sequence of broadcasts that are trans- time for third parties or cooperating with other participants in mitted at certain times only and addressed to the general public such the market; as Internet Protocol television and streaming media) is, in principle, • takes measures against corporate journalism, such as issuing covered by the RTVA, apart from offerings of minor editorial importance editorial statutes to ensure editorial freedom; or (ie, programme services that can only be received simultaneously by • adapts its business and organisational structure (if the other meas- fewer than 1,000 devices) and on-demand content that is also excluded ures are clearly insufficient). from the RTVA. Consequently, most of today’s online content is not regulated. Broadcasts that are subject to the RTVA, however, must abide by Key trends and expected changes the same rules (eg, regarding advertisement) as broadcasts via tradi- 27 Provide a summary of key emerging trends and hot topics in tional media. Although no licence is required, the broadcasters must media regulation in your country. inform OFCOM about their programme service. For some time now, Swiss media companies have faced a challenging Digital switchover time with declining revenues. Among others, this development has 24 When is the switchover from analogue to digital broadcasting mainly been driven by online media or digitalisation, respectively. The required or when did it occur? How will radio frequencies consequences are job cuts, the merging of editorial offices and a decline freed up by the switchover be reallocated? in media diversity, which is particularly evident on a regional level. The covid-19 pandemic aggravated this development. Recent concentra- From 1 January 2015, must-carry obligations regarding analogue tions in the media sector in Switzerland confirm a clear trend towards terrestrial television programme services were finally abolished and consolidation in this sector. switched from analogue to digital television broadcasting. No specific Due to this development and the special importance of the media timing is required by law for the switchover from analogue to digital for democracy, the Swiss parliament passed motions to provide emer- broadcasting concerning the broadcasting of radio programme services. gency financial aid amounting to 57.5 million Swiss francs. The Federal However, in spring 2013, the radio industry, together with OFCOM, set Council adopted two corresponding emergency ordinances on 20 May up the Digital Migration Working Group, which is made up of representa- 2020 with a supporting package for all media genres. tives of the industry and public authorities. Accordingly, it planned to On one hand, private radio and television broadcasters were directly gradually replace analogue FM reception with digital radio from 2020 supported with 30 million Swiss francs from the radio and television onwards with completion by 2024 at the latest. Today, the SBC and most levy. Aside from direct financial contributions, the Swiss Confederation private radio stations broadcast their programme services via DAB+ in also committed to cover the costs of the Keystone-SDA news agency parallel with FM; some even broadcast exclusively in digital. To establish for six months, which are charged to electronic media. A maximum of www.lexology.com/gtdt 155 © Law Business Research 2021 Switzerland CORE Attorneys Ltd

10 million Swiss francs was made available for this purpose, which is Appeal procedure also taken from the radio and television levy. In the print sector, on the 29 How can decisions of the regulators be challenged and on other hand, an expansion of the existing indirect press subsidy has been what bases? implemented. Already subsidised subscribed daily and weekly newspapers of the regional and local press were delivered free of charge in In the telecommunications and media sector, the law provides for the the daily channel of the post office for six months from 1 June 2020. following appeal procedures: Decisions of ComCom, OFCOM, DETEC Some 12.5 million Swiss francs from the general state budget was and COMCO as well as, to a limited extent, its interim procedural deci- earmarked for this measure. Further, from 1 June 2020, the Swiss sions, can be appealed to the Federal Administrative Tribunal. The Confederation temporarily contributed to the costs of daily delivery of scope of judicial reviews is extensive. An appeal can be lodged on the subscribed daily and weekly newspapers with a total circulation of more following grounds: than 40,000 copies per issue. These titles were not eligible for subsidies • wrongful application of the law; according to the initial regulation. They also benefited temporarily from • the facts established by the authorities were incomplete a delivery discount in the amount of the current regular reduction of 27 or wrong; or centimes per copy. A maximum of 5 million Swiss francs was assigned • the decision was unreasonable (a claim that is, however, rarely to this measure. invoked in practice). The ordinances were initially limited until 30 November 2020. On 11 November 2020, however, the Federal Council decided to extend the Accordingly, the appeal before the Federal Administrative Tribunal is transitional measures until 30 June 2021 in the print-media sector and a full-merits appeal on both the findings of facts and law. However, until 31 December 2021 for the coverage of the Keystone-SDA news in practice, the Federal Administrative Tribunal grants the previous agency costs charged to the electronic media. instances a significant margin of technical discretion. Decisions of the Independent Complaints Authority for Radio and REGULATORY AGENCIES AND COMPETITION LAW Television can be appealed directly to the Federal Supreme Court. The judgments of the Federal Administrative Tribunal and, to a Regulatory agencies limited extent, interim procedural decisions may be challenged before 28 Which body or bodies regulate the communications and the Federal Supreme Court based on law and procedure within 30 days media sectors? Is the communications regulator separate of the notification of the decision. An exception applies to decisions of from the broadcasting or antitrust regulator? Are there the Federal Administrative Court regarding publicly tendered licences mechanisms to avoid conflicting jurisdiction? Is there a and disputes regarding access based on interconnection rules. These specific mechanism to ensure the consistent application of decisions are final and binding and cannot be appealed to the Federal competition and sectoral regulation? Supreme Court. In proceedings before the Federal Supreme Court, judicial review is limited to legal claims (ie, the flawed application of the The authorities regulating the telecommunications sector are the law or a violation of fundamental rights outlined in the Swiss Federal Federal Communications Commission (ComCom) and the Federal Office Constitution, the European Convention on Human Rights or other inter- of Communications (OFCOM). ComCom is the independent licensing national treaties). The claim that a decision was unreasonable is fully and market regulatory authority for the communications sector. Its excluded and claims concerning the finding of facts are limited to cases main activities and competencies relate, in particular, to the granting of arbitrariness. of licences for the use of radio communication frequencies as well as In addition to the possibility of a request for reconsideration from the regulation of the terms of application of number portability and free the deciding authority (no actual appeal), regarding decisions by COMCO, choice of supplier. ComCom instructs OFCOM concerning the prepara- the parties involved may at any time during and after appeal procedures tion of its business and the implementation of its decisions. OFCOM itself request the Federal Council to exceptionally authorise specific behav- is part of the Federal Department of the Environment, Transport, Energy iour or to clear a blocked merger for compelling public interest reasons. and Communications (DETEC) and acts as the supervisory authority in To date, such authorisation has never been granted. the communications sector. There is no strict line to draw between the competencies of OFCOM and ComCom as the latter has delegated some Competition law developments of its competencies to OFCOM. 30 Describe the main competition law trends and key merger The authorities regulating the media sectors are the Federal and antitrust decisions in the communications and media Council, DETEC and OFCOM. Further, there are the Federal Media sectors in your jurisdiction over the past year. Commission with advisory tasks and the Independent Complaints Authority for Radio and Television. In previous years, COMCO has reviewed a series of concentrations in Also, anticompetitive practices and mergers in the telecommunica- the telecommunications and media sector, most of them in phase I. In tions and media sector are subject to general competition law provisions October 2020, COMCO granted unconditional clearance to the acquisition enforced by the Swiss Competition Commission (COMCO). The cases are of Sunrise Communications Group Ltd by Liberty Global plc in phase I. prepared and processed by COMCO’s Secretariat. In merger notification The clearance decision mainly relied on the in-depth phase II examina- scenarios, provided that the notification thresholds of the Federal Cartel tion of the contemplated reverse acquisition of certain Liberty Global Act are met, the notifying parties require both clearance from COMCO assets including UPC Switzerland LLC by Sunrise Communications and approval of the transfer of mobile radio frequency licences by the Group Ltd in the previous year. In that examination, COMCO, in particular, licensing authority. Moreover, concerning specific questions related to assessed and eventually excluded a collective dominant position of the conditions of competition or the market position respectively, the Sunrise and Swisscom. telecommunications regulators are required to consult with COMCO. Concerning behavioural cases, with the decision of 16 November Thus, there is close collaboration between the authorities to avoid juris- 2020, COMCO imposed fines on several suppliers of network components dictional conflicts, particularly concerning issues such as reviewing for illegal price-fixing agreements when submitting offers for compo- price-fixing arrangements, mergers and strategic alliances as well as nents used for data transmission via optical fibre by major customers. the behaviour of dominant market players On 7 September 2021, COMCO has found that UPC is dominant in the

156 Telecoms & Media 2021 © Law Business Research 2021 CORE Attorneys Ltd Switzerland live broadcasting of Swiss ice hockey championship matches on pay-TV and that it abused this position by refusing to broadcast these games to Swisscom as a television platform operator. UPC holds extensive exclusive rights to broadcast Swiss ice hockey content on pay-TV for the 2017–18 to 2021–22 seasons. These exclusive rights created a dominant position in this market. Consequently, COMCO obliged UPC to offer all requesting television platforms in Switzerland either the raw signal of these championship matches or the transit of the UPC Mysports programme content (containing the relevant ice hockey content) on non- Mario Strebel [email protected] discriminatory terms. On 9 December 2019, the Federal Supreme Court issued a leading case concerning price-squeezing concerning the Swiss Fabian Koch telecommunications market. In this decision, the Federal Supreme [email protected] Court upheld the decision of the Federal Administrative Tribunal with a fine of about 186 million Swiss francs on Swisscom, the incumbent Dufourstrasse 105 Swiss telecommunications operator, for a price squeeze in the asym- 8008 Zürich metric digital subscriber line market. Switzerland Regarding legislative changes, the Swiss government is currently Tel + 41 43 555 70 00 analysing whether Switzerland should modernise its merger-control www.core-attorneys.com regime and switch from the currently applied creation or strengthening of a dominant-position test to the significant impediment of an effective-competition test as applied, inter alia, in the European Union. The Federal Council, therefore, instructed the Federal Department of The ordinances were initially limited until 30 November 2020. On Economics, Education and Research in February 2020 to prepare a 11 November 2020, however, the Federal Council decided to extend the consultation draft. The government believes that this change of test for transitional measures until 30 June 2021 in the print-media sector and merger proceedings would have both a medium- and long-term positive until 31 December 2021 for the coverage of the Keystone-SDA news effect on competition in Switzerland. The consultation is expected to be agency costs charged to the electronic media. opened in the second half of 2021.

The covid-19 pandemic has aggravated the challenging time Swiss media companies face in recent times with declining revenues. Due to the special importance of the media for democracy, the Swiss parliament passed motions to provide emergency financial aid amounting to 57.5 million Swiss francs. The Federal Council adopted two corresponding emergency ordinances on 20 May 2020 with a supporting package for all media genres. On one hand, private radio and television broadcasters were directly supported with 30 million Swiss francs from the radio and television levy. Aside from direct financial contributions, the Swiss Confederation also committed to cover the costs of the Keystone-SDA news agency for six months, which are charged to the electronic media. A maximum of 10 million Swiss francs was made available for this purpose, which was also taken from the radio and television levy. In the print sector, on the other hand, an expansion of the existing indirect press subsidy has been implemented. Already subsidised subscribed daily and weekly newspapers of the regional and local press were delivered free of charge in the daily channel of the post office for six months from 1 June 2020. An amount of 12.5 million Swiss francs from the general state budget was earmarked for this measure. Further, from 1 June 2020, the Swiss Confederation temporarily contributed to the costs of daily delivery of subscribed daily and weekly newspapers with a total circulation of more than 40,000 copies per issue. These titles were not eligible for subsidies according to the initial regulation. They also benefited temporarily from a delivery discount in the amount of the current regular reduction of 27 centimes per copy. A maximum of 5 million Swiss francs was assigned to this measure. www.lexology.com/gtdt 157 © Law Business Research 2021 Taiwan

Robert C Lee and Sharon Liu Yangming Partners

COMMUNICATIONS POLICY Authorisation/licensing regime 2 Describe the authorisation or licensing regime. Regulatory and institutional structure 1 Summarise the regulatory framework for the communications Article 11 of the Telecommunications Act classified telecom service sector. Do any foreign ownership restrictions apply to providers into Type I and Type II telecom service providers, depending communications services? on whether a service provider set up telecom line facilities and equipment (which were defined as the network transmission facilities Telecommunication businesses are under the jurisdiction of the connecting the sending and receiving terminals, the switching facili- National Communication Commission (NCC), which is an independent ties integrated therewith and the auxiliary facilities related thereto) for body composed of seven members nominated by the premier and then its provision of telecommunication services. A Type I telecom service approved by Congress. The NCC performs its function via committees provider was defined as one that provides facilities-based services; and all matters handled by the NCC are subject to the decisions made Type II services were all other services. The operation of either of such in the committee meetings. A single NCC committee member does services was subject to a franchise (Type I), or prior approval in the form not have the authority to exercise power or perform independently. of a licence (Type II). Fixed-line, submarine cable, mobile phones and The Telecommunications Management Act (26 June 2019) is currently satellite telecom were all categorised as Type I telecom services. A fran- the major legislation governing the telecommunications sector. chise issued by the NCC was required for the provision of such services. Taiwan’s Congress passed the Telecommunications Management Act Service Providers of these services were required to be companies in June 2019, which became effective on 1 July 2020 and replaced the incorporated under Taiwan’s Company Law, with limited liability, and Telecommunications Act as the new main telecommunication legislation capital dividend by issued shares. Specific regulations promulgated in Taiwan. The Telecommunications Management Act releases the fran- under the Telecommunications Act further governed minimum capital chise and licence requirements that existed for telecommunication service requirements, licensing procedures and conditions, and operations. providers under the Telecommunications Act. The Telecommunications New telecommunications legislation, the Telecommunication Management Act separates telecommunication services from telecom- Management Act, was introduced to replace the Telecommunications munication networks. Under the Telecommunications Management Act as the main telecommunications legislation in Taiwan and became Act, engaging in telecommunication services is subject to registration, effective on 1 July 2020. which is mandatory only for engaging in telecommunication services The Telecommunications Management Act replaces those fran- using public telecommunication resources or that have interconnec- chise and licence requirements for all telecommunication service tions with other service providers, and which is optional for engaging providers with a registration scheme for those entities providing in all other types of telecommunication services. The building up and telecommunication services and a separate approval requirement operation of a public telecommunication network (ie, a telecommunica- for the entities building up and operating public telecommunication tion network for the provision of the services to customers instead of networks. The registration is optional, provided that service providers for use by the network owner itself) by a registered telecommunica- that intend to interconnect with other providers and apply for frequen- tion service provider or any other person is separately subject to the cies or telecommunication numbers are required to register with the NCC’s prior approval. A registered telecommunication service provider NCC. Only registered telecommunication service providers are subject can utilise its own networks or those of others for its services. The local to the various obligations and compliance requirements outlined by entity requirement and the foreign investment cap, at levels the same as the Telecommunications Management Act. Only local entities, including those formerly stipulated by the Telecommunications Act, apply to the Taiwan-incorporated companies and the registered Taiwan branch public telecommunication network owners whose networks use public offices of foreign companies, may register with the NCC as telecommu- telecommunication resources, including frequencies and telecommuni- nication service providers. cation numbers. A public telecommunication network owner could build Separately from the telecommunications service provider registra- up said network entirely on its own or in combination with components tion, a registered telecommunications service provider or any person from others. proposing to build up a public telecommunication network is subject The Telecommunications Management Act gives telecommunica- to prior approval from the NCC. A public telecommunications network tions franchisees and licensees under the old Telecommunications Act is defined as a telecommunications network established to provide a period of three years from the Telecommunication Management Act services for communication by the public, where the public means becoming effective to transition over to the new registration scheme, any third party other than the network owner itself. As such, a tele- as applicable. communications network built by an operator that provides services to corporate customers for the latter’s internal communications only would still be considered a public telecommunications network and the

158 Telecoms & Media 2021 © Law Business Research 2021 Yangming Partners Taiwan building up of such a network is subject to prior approval from the NCC. • the development of technologies and services in the market at issue; The Telecommunications Management Act broadly defines a telecom- • the importance in the overall telecommunications service market; munication network as a network consisting of telecommunications • the region or range of competition and the demand or supply infrastructure that transmits and receives communication messages substitutability of the service market at issue; and by way of satellite, fixed or mobile networks, or any combination • the structure of competition in the service market at issue. of the same. A public telecommunication network can be built entirely by the As the Telecommunications Management Act only became effective in owner of such network itself or in combination with a network built July 2020, the NCC is still in the process of considering the above facts by another. Only a Taiwan entity can apply with the NCC to build up concerning the various telecommunication service markets and has not a public telecommunication network. A public telecommunications yet specified any markets. network that uses frequency and telecommunication numbers can only When the NCC does designate certain markets, it will be entitled to be built by a Taiwan-incorporated company with limited liability and determine the dominant market players in those markets and adopt the capital divided by issued shares. The chairman of the board of directors following control measures on such dominant market players: of such Taiwan-incorporated company must be a Taiwan citizen and the • requiring those dominant market players to disclose information, company subject to foreign investment caps whereby the direct foreign conditions, procedures and expenses concerning interconnection, investment in such entity may not exceed 49 per cent of its total capital network access components, and use of their telecommunications and where the total of direct and indirect foreign investment cannot infrastructure; exceed 60 per cent of its total capital. • requiring those dominant market players to ensure the intercon- A public telecommunication network owner is not necessarily a nection agreements that they enter into are fair, reasonable and registered telecommunication service provider, while a registered tele- non-discriminatory; communication service provider can utilise the networks it builds up • requiring those dominant market players to provide other service itself or provided by others for the provision of its service. providers with interconnection, network access components, or Both the registration and network build-up approval are perma- relevant telecommunication infrastructure, and to outline template nent and without any fixed term. agreements for the same for the NCC’s approval; All of the Type I franchisees and Type II licensees under the old • prohibiting those dominant market players from setting service Telecommunication Act are required by the Telecommunications fees that may cause a cross-subsidy price squeeze or any other Management Act to complete their registrations as telecommunica- abuse of power; and tions service providers, if applicable to them, within a period of three • requiring those dominant market players to adopt accounting years from the date on which the Telecommunications Management separation among the various services. Act becomes effective. Until it has completed such transition, however, a telecommunications franchisee or licensee under the Structural or functional separation Telecommunications Act remains subject to the provisions outlined 5 Is there a legal basis for requiring structural or functional under the Telecommunications Act. All the franchises and licenses separation between an operator’s network and service granted by the NCC under the Telecommunications Act will automati- activities? Has structural or functional separation been cally become invalid at the end of such three-year period. Existing public introduced or is it being contemplated? telecommunication networks built by those franchisees and licensees can apply to the NCC for network build-up approval without going The Telecommunications Management Act adopts a separation of struc- through the necessary network examination that is required for newly- ture and function regime and allows a telecom service provider to use established networks under the Telecommunications Management Act. the networks established by others but does not make structural and functional separation mandatory. Flexibility in spectrum use 3 Do spectrum licences generally specify the permitted use Universal service obligations and financing or is permitted use (fully or partly) unrestricted? Is licensed 6 Outline any universal service obligations. How is provision of spectrum tradable or assignable? these services financed?

A spectrum licence shall always be used exclusively for the specific The NCC is authorised by the Telecommunications Management Act to purpose for which it was granted. designate one or more registered telecommunication service providers An entity with frequency allocated by the NCC is permitted to to provide universal services, which are financed by a fund contributed transfer such frequency to others or share the use of such frequency to by those registered telecommunication service providers that have with others, all of which are subject to the NCC’s prior approval. been designated by the NCC and that contribute to the fund in amounts and manners and manners set by the NCC. Ex-ante regulatory obligations 4 Which communications markets and segments are subject to Number allocation and portability ex-ante regulation? What remedies may be imposed? 7 Describe the number allocation scheme and number portability regime in your jurisdiction. ‘Ex-ante obligations’ is not a term used by the Telecommunications Management Act. Nevertheless, the Telecommunications Management All telecommunication numbers, including numbering codes, subscriber Act provides a regulatory scheme for ensuring effective competition numbers and identification codes, are administered by the NCC in within specific telecommunication service markets. The NCC is author- Taiwan. The numbers are allocated by the NCC to registered telecom- ised by the Telecommunications Management Act to adopt control munication service providers via applications made under the NCC’s measures for the dominant market players in the service market desig- regulations. Numbers allocated to registered telecom service providers nated by the NCC. For such market designation, the NCC shall take into can only be used for those services for which the application applied. consideration the following facts: Numbers allocated by the NCC are not tradable or transferable. www.lexology.com/gtdt 159 © Law Business Research 2021 Taiwan Yangming Partners

Number portability is mandatory, but the NCC has discretion in Telecommunications Act), or by registered telecommunication service setting the applicable time frames. Currently, mobile phone number providers and public telecommunication network operators (under the portability is mandatory, while local landline number portability is only Telecommunications Management Act). required in certain municipalities. Cybersecurity Customer terms and conditions 13 Is there specific legislation or regulation in place concerning 8 Are customer terms and conditions in the communications cybersecurity or network security in your jurisdiction? sector subject to specific rules? The Cybersecurity Management Act (CSMA) is the major Taiwan legis- Only the customer terms and conditions adopted by a regis- lation addressing cybersecurity. Taiwan’s general criminal law also tered telecommunication service provider are regulated by the includes specific provisions related to cybercrime. The CSMA applies Telecommunications Management Act. Where customers fail to pay not only to government bodies but to private companies engaging in for their telecommunication service fees on time, the registered tele- the provision of data services and core internet infrastructure opera- communication service providers are not allowed to suspend their tions. The CSMA mainly requires applicable government bodies and service without first notifying such customers and asking them to private companies to establish and implement cybersecurity plans and make payment during a specified time. A registered telecommunica- requires that the government be notified of cybersecurity incidents. The tion service provider is not liable to its customers for any damages Telecommunications Management Act requires all public telecommuni- caused by errors, delays, interruptions, suspensions, or failures in cation network operators to integrate detection and protection functions its service, due to a failure or breakdown of the telecommunication into their networks that are sufficient to ensure communication secu- network, but customers shall be offered a reduction in their service rity. An application for building up a public telecommunication network fees as compensation. The customer terms and conditions of regis- would need to include the applicant’s communication security protec- tered telecommunication service providers designated by the NCC are tion plan for the network. subject to prior approval by the NCC. Big data Net neutrality 14 Is there specific legislation or regulation in place, and have 9 Are there limits on an internet service provider’s freedom to there been any enforcement initiatives in your jurisdiction, control or prioritise the type or source of data that it delivers? addressing the legal challenges raised by big data? Are there any other specific regulations or guidelines on net neutrality? No.

No. Data localisation 15 Are there any laws or regulations that require data to be Platform regulation stored locally in the jurisdiction? 10 Is there specific legislation or regulation in place, and have there been any enforcement initiatives relating to digital No. However, the NCC prohibits any Taiwan telecommunication service platforms? franchisees and licensees (under the old Telecommunications Act), or registered telecom service providers, or public telecommunication No. network operators (under the new Telecommunications Management Act), from transmitting any personal data that it has collected to main- Next-Generation-Access (NGA) networks land China. 11 Are there specific regulatory obligations applicable to NGA networks? Is there a government financial scheme to Key trends and expected changes promote basic broadband or NGA broadband penetration? 16 Summarise the key emerging trends and hot topics in communications regulation in your jurisdiction. There are currently no specific regulations governing NGA networks. The Taiwan government did provide tax incentives for the develop- Congress passed Taiwan’s new main telecommunication legislation, ment of 5G mobile communication-related businesses that meet certain the Telecommunications Management Act, in mid-2019, to replace the qualifications. old Telecommunications Act, and the new legislation went into effect on 1 July 2020. The Telecommunications Management Act significantly Data protection changes the legal framework in Taiwan’s telecommunication sector 12 Is there a specific data protection regime applicable to the by separating the function or service operation and network, and by communications sector? replacing the franchise and licence requirements for telecommunication service providers under the old Telecommunications Act with a The Personal Data Protection Act (PDPA) is Taiwan’s major legislation service provider registration scheme which is mandatory for the service governing personal data protection and applies to all business sectors providers proposing to interconnect with other service providers or including the telecommunications sector. The PDPA authorises the applying with the NCC for telecommunications frequencies or numbers. NCC, as the regulator for telecommunication businesses, to outline The Telecommunications Management Act requires all telecommuni- regulations specifically for personal data protection matters within the cation franchisees and licensees under the old Telecommunications telecommunications sector. The NCC currently has a set of guidelines for Act to transition over to the new registration scheme, if applicable, information security within the telecommunications sector that include within a three-year period calculated from the day on which the guidelines for personal data protection. The NCC has also prohibited Telecommunications Management Act became effective. the transmission of any personal data to mainland China by Taiwan’s A registered telecommunication service provider can provide its telecommunication service franchisees and licensees (under the old services via a public telecommunication network that it builds up by

160 Telecoms & Media 2021 © Law Business Research 2021 Yangming Partners Taiwan itself, leases, or otherwise acquires the usage rights from other network services, which are currently not regulated. An offshore broadcaster operations. broadcasting into Taiwan via satellite needs to either set up a branch Separate from the registration for telecommunication service office in Taiwan or appoint a local distributor. An offshore satellite providers, the building up and operation of a public telecommunication broadcaster licence shall be obtained by the branch office in Taiwan network, either by a registered telecom service provider or any other or the local distributor on behalf of the offshore satellite broadcaster. person, is subject to the prior approval of the NCC, wherein ‘build-up’ The term of a licence for a terrestrial broadcaster is nine years. means an entity has built its own public telecommunication network in Such a licence is renewable upon the expiry of each nine-year period. whole or has created a public telecom network by combining its own A cable broadcasting licence is also valid for nine years. An application network or components with those of others. for renewal of a cable broadcasting licence must be filed within the six- month period following the beginning of the ninth year of the licence. MEDIA The duration of the satellite broadcasting licence is six years, provided that the licence term for a local distributor of an offshore satellite broad- Regulatory and institutional structure caster is limited to the distribution term, with a maximum of six years. 17 Summarise the regulatory framework for the media sector in An application for renewal of a satellite broadcasting licence must be your jurisdiction. filed no later than six months before the expiry of the then-applicable licence period. The National Communication Commission (NCC) is also the government No franchise fees are imposed on broadcasters. However, licensed agency overseeing the broadcasting industry. The Radio and Television cable broadcasters must make annual donations to a government Broadcasting Law (last amended on 13 June 2018) governs terrestrial foundation in an amount equal to 1 per cent of business turnover for broadcasting, the Cable Radio and Television Broadcasting Law (last that year. The subscription fees charged by a cable operator from its amended on 13 June 2018) governs the cable broadcasting sector, and subscribers are subject to prior approval by the government authorities. the Satellite Radio and Television Broadcasting Law (last amended on 13 June 2018) governs satellite broadcasting. Foreign programmes and local content requirements 20 Are there any regulations concerning the broadcasting Ownership restrictions of foreign-produced programmes? Do the rules require a 18 Do any foreign ownership restrictions apply to media minimum amount of local content? What types of media fall services? Is the ownership or control of broadcasters outside this regime? otherwise restricted? Are there any regulations in relation to the cross-ownership of media companies, including radio, No regulations restrict the broadcasting of foreign programmes. Locally television and newspapers? produced programmes must make up at least 70 per cent of total programming broadcasted by a terrestrial broadcaster. Also, at least The restrictions on foreign ownership for broadcasters are: 50 per cent of the primetime dramas broadcasted by terrestrial broad- • terrestrial broadcasters: no foreign investment is allowed; casters must be locally produced. • cable broadcasters: total direct and indirect foreign investment shall be less than 60 per cent of the broadcaster’s total issued Advertising shares. Direct foreign investment shall be less than 20 per cent of 21 How is broadcast media advertising regulated? Is online the total shares issued; and advertising subject to the same regulation? • satellite broadcasters: direct foreign investment in a Taiwan- incorporated satellite broadcaster shall be less than 50 per cent of Advertising content must not violate the law, jeopardise public policy or the total issued shares. An offshore satellite broadcaster may offer adversely affect acceptable social customs, adversely affect the phys- programmes in Taiwan by setting up a branch office or appointing a ical or mental wellbeing of children or juveniles, incite people to commit distributor, provided that the NCC has granted broadcasting approval. crimes, or spread rumours or false information to mislead the public. The content of advertisements for certain products and services must There are currently no regulations specifically prohibiting or restricting receive prior approval from the relevant government agencies if other cross-ownership among broadcasters. However, for cable television applicable laws so provide. For example, advertisements for medicines, multiple system operators, relevant cable laws provide that a cable cosmetics, medical equipment and medical treatments must have the system operated together with its related companies and related cable approval of the health authorities. system operators is prohibited from controlling more than one-third of For terrestrial broadcasters, advertising time must not exceed 15 the total number of subscribers in the country, and cable system opera- per cent of total broadcasting hours. For cable broadcasters or satel- tors shall not have more than one-quarter of the channels available on lite broadcasters, advertising time must not exceed one-sixth of total their respective network broadcasting programming produced in-house broadcasting time for each programme. Online advertising is not subject or provided by affiliates. to the same restrictions as IPTV or internet programme services and is Also, cross-ownership among broadcasters is subject to general not yet regulated in Taiwan. competition laws. Must-carry obligations Licensing requirements 22 Are there regulations specifying a basic package of 19 What are the licensing requirements for broadcasting, programmes that must be carried by operators’ broadcasting including the fees payable and the timescale for the distribution networks? Is there a mechanism for financing the necessary authorisations? costs of such obligations?

All broadcasters broadcasting within the territory of Taiwan, regardless A cable broadcaster is required to simultaneously retransmit the of the broadcasting platform, are subject to licences issued by the NCC, programmes and advertisements broadcast by licensed terrestrial except for internet protocol television (IPTV) and internet programming broadcasters by including those in the cable broadcaster’s basic www.lexology.com/gtdt 161 © Law Business Research 2021 Taiwan Yangming Partners

channel service. Cable broadcasters must retransmit such programmes consolidation, the viewer ratings for the merged or consolidated broad- and advertisements in their entirety without any changes to format and caster and media enterprise would meet certain thresholds and such content. No fees are payable for such retransmission. approval would not be granted if the post-merger or post-consolidation viewer ratings would exceed still higher stipulated thresholds. Regulation of new media content 23 Is new media content and its delivery regulated differently Key trends and expected changes from traditional broadcast media? How? 27 Provide a summary of key emerging trends and hot topics in media regulation in your country. Currently, there are no specific rules for broadcasting new media content. The NCC is currently proposing to regulate offshore and domestic Digital switchover internet programming service (or over-the-top (OTT) services) providers 24 When is the switchover from analogue to digital broadcasting and has released a draft of the legislation for comments from the public. required or when did it occur? How will radio frequencies The key points of the documents include: freed up by the switchover be reallocated? • OTT service providers would be subject to registration requirements, which would be mandatory for the service providers specified by Terrestrial TV digitalisation the NCC based on the number of subscribers, flow, business, turn- The digital switchover for terrestrial television broadcasting was over, market position, and other significant public interest metrics; completed on 30 June 2012. The spectrum freed up by such switchover • offshore OTT service providers subject to mandatory registration was allocated for 4G mobile phone service franchisees. requirements shall appoint a local agent and then process its registration with NCC via such agent; Cable TV digitalisation • registered OTT service providers are subject to various information All of the networks currently operated by domestic cable broadcasters disclosures (to the regulators and public requests); are capable of transmitting digital content. Certain cable operators have • the content or programmes provided by registered OTT service begun broadcasting in full digital. The competent authority in charge, providers are subject to grading requirements and should comply the NCC, has adopted the following steps for promoting cable television with applicable restrictions outlined by Taiwan laws; and digitalisation: • registered Taiwan telecommunication service providers and • encouraging cable system operators to provide a free set-top box public telecommunication network operators are prohibited from to each user; providing services to the OTT service providers of mainland China • adopting the achieved percentage of cable television digitalisation as that have not secured prior approval from the Taiwan government the key evaluation point for cable system operator licence renewal; to provide their programming services in Taiwan. • combining the achieved percentage of cable television digitalisation and cable television tariff policy for policy consideration; REGULATORY AGENCIES AND COMPETITION LAW • opening the cable television tiering system under the achieved percentage of cable television digitalisation; and Regulatory agencies • issuing new cable broadcaster licences to only those operators that 28 Which body or bodies regulate the communications and media propose to broadcast in full digital. sectors? Is the communications regulator separate from the broadcasting or antitrust regulator? Are there mechanisms to By 9 July 2020, digital penetration had reached 99.99 per cent in Taiwan, avoid conflicting jurisdiction? Is there a specific mechanism to with approximately 4.86 million digital TV users. ensure the consistent application of competition and sectoral regulation? Digital formats 25 Does regulation restrict how broadcasters can use their The National Communication Commission (NCC) is the government spectrum? agency overseeing the telecom and broadcasting industry. The NCC makes policy decisions, initiates most of the telecom and broadcasting- The laws do not outline specific restrictions with the exception that the related legislation and has primary responsibility for implementation and cable broadcasting laws prohibit cable broadcasters from broadcasting enforcement of telecom and broadcasting laws. A separate independent home shopping channels in excess of a number specified by the NCC. regulator, the Taiwan Fair Trade Commission (TFTC), is the antitrust Also, all of the programming that a cable broadcaster intends to broad- regulator in Taiwan. Just as for the NCC, the members of the TFTC are cast is subject to the NCC’s general review and approval. nominated by the premier and then approved by Congress. The Telecommunications Management Act provided that any Media plurality merger or acquisition made by a registered telecommunication service 26 Is there any process for assessing or regulating media provider that has been allocated frequencies by the NCC or that holds plurality (or a similar concept) in your jurisdiction? May the one-quarter or more of a telecommunication service market specified authorities require companies to take any steps as a result of by the NCC, or any merger or transfer of business between or among such an assessment? registered telecommunication service providers where the business to be merged or transferred represents one-quarter share or more of a New media antimonopoly and divestiture legislation has been proposed telecommunication service market specified by the NCC, is subject to by the NCC and is currently being reviewed by Congress, and aims NCC prior approval. to regulate mergers or other forms of consolidation among various In practice, the NCC also considers any merger or acquisition broadcasters and other media such as newspapers so to prevent over- between or among broadcasters to represent a change to the busi- concentration within the media landscape. Briefly, prior approval from ness plans originally submitted to the NCC by those broadcasters and, the NCC would be required for any merger or other consolidation among thus, any changes to such business plans would require prior approval specific broadcasters and other media if, after the merger or other of the NCC.

Such mergers or acquisitions in the communication and media sectors are subject to prior notification to the TFTC as well, if the market thresholds stipulated by the Fair Trade Law, Taiwan’s general competition law, would be met as a result of the merger or acquisition. No specific law exists for avoiding conflicts in jurisdiction between the NCC and the TFTC for mergers or acquisitions within the telecom and media sector. The NCC and the TFTC have the authority to make their own respective decision on the same proposed transaction. In fact, the TFTC has outlined its own guidelines for its review of cross-sector Robert C Lee [email protected] combination transactions between or among telecommunication and broadcasting industries. Sharon Liu [email protected] Appeal procedure

29 How can decisions of the regulators be challenged and on 10F., No.89, Song Ren Rd what bases? Xinyi Dist Taipei City 110 An objection to the decision by the NCC or the TFTC should be Taiwan appealed to the High Administrative Court directly because the NCC’s Tel: +886 2 8725 6677 or TFTC’s decision failed to comply with applicable laws. A decision Fax: +886 2 2729 5577 by the High Administrative Court may be appealed to the Supreme www.yangminglaw.com Administrative Court.

Competition law developments 30 Describe the main competition law trends and key merger and antitrust decisions in the communications and media sectors in your jurisdiction over the past year.

There were no notable merger or antitrust decisions in the communications and media sectors in Taiwan in the past year.

No.

Cigdem Ayozger Ongun, Volkan Akbas and Selin Cetin SRP Legal

COMMUNICATIONS POLICY • determining objectives, principles and policies towards the aim of encouraging the development of the electronic communications Regulatory and institutional structure sector and supporting the transformation into an information society; 1 Summarise the regulatory framework for the communications • determining policies towards construction and development of sector. Do any foreign ownership restrictions apply to electronic communications infrastructure, network and services; communications services? • contributing to the creation of policies; • representing the state in the international associations and The main piece of legislation regulating the communications sector in organisations; Turkey is Law No. 5809 on Electronic Communications. The scope of • conducting necessary research; Law No. 5809 is: • taking necessary measures and performing coordination to ensure • the provision of electronic communications services and the the continuity of electronic communications in the case of natural construction and operation of the infrastructure and the associated disasters and extraordinary situations; network systems thereof; • planning electronic communications services in the case of extraor- • the manufacture, import, sale, construction and operation of all dinary situations and during war and performing necessary actions; kinds of electronic communications equipment and systems; • encouraging domestic design and production of electronic commu- • the planning and assignment of scarce resources including nications systems, promoting research, development and training frequency and the regulation; and activities relating to the sectors; and • authorisation, supervision and reconciliation activities relating to • determination of the amount of the source to be allocated by ICTA said issues. that shall not exceed 20 per cent of ICTA’s income and allowing this source to be used by making necessary arrangements. Also, the communications sector in Turkey is particularly governed by: • Law No. 5651 on Regulating Broadcasting on the Internet and As per article 6 of Law No. 5809, ICTA is mainly vested with the following Fighting Against Crimes Committed through Internet Broadcasting; powers and duties: • Law No. 5070 on Electronic Signature; • making regulations to create and protect competition and elimi- • Law No. 6563 on the Regulation of E-Commerce; nating the practices that are obstructive, disruptive or limitative for • the Regulation on Network and Information Security in the competition; Electronic Communications Sector; • imposing obligations on operators with significant market power • the Regulation on Processing and Protection of Personal Data in (SMP) in the relevant markets and on other operators when the Electronic Communications Sector; required, taking the necessary measures; • the Regulation on Consumer Rights for the Electronic • inspecting breaches of competition and imposing sanctions; Communications Sector; • making necessary arrangements and supervisions pertaining • the Regulation on Authorization in the Electronic to the rights of subscribers, users, consumers and end users as Communications Sector; well as the processing of personal data and protection of privacy, • the Regulation on Spectrum Management; and rendering decisions; • the Regulation on Access and Interconnection. • conducting the dispute resolution procedure between the operators when necessary and taking the necessary measures; The prepared communiques and rendered decisions are enforced by • following developments in the electronic communications sector; the Information and Communication Technologies Authority (ICTA), • planning and allocating the frequencies, satellite position and and the general laws such as Capitals Markets Law No. 6362, Turkish numbering necessary for the provision of electronic commu- Commercial Code No. 6102 and Criminal Procedural Law No. 5271 also nications services and installation and operation of electronic govern the communications sector in Turkey. communications network and infrastructures; The Ministry of Transport and Infrastructure (the Ministry) and • performing necessary regulations and inspections; ICTA are both vested with certain powers and duties under Law No. • supervising radio systems and determining the scope of commer- 5809. ICTA mainly has regulatory and executive powers, whereas the cial secrets; Ministry mainly has policymaking powers. • obtaining information and documentation that are deemed As per article 5 of Law No. 5809, the Ministry is vested with the necessary; following powers and duties: • transferring sources that shall not exceed 20 per cent of the income, • setting strategies and policies regarding electronic communica- determining general criteria and implementation procedures and tions services that are based on scarce resources; principles regarding tariffs to be imposed;

• approving reference access offers; Flexibility in spectrum use • determining provisions and conditions for authorisations and 3 Do spectrum licences generally specify the permitted use supervising their implementation and conformity; or is permitted use (fully or partly) unrestricted? Is licensed • conducting frequency planning, assignment and registration spectrum tradable or assignable? procedures; • ensuring the publication and implementation of the harmonised The main piece of legislation regarding spectrum management is the national standards for all kinds of systems and equipment, and Spectrum Management Regulation (the Regulation) published in Official creating technical regulations; Gazette No. 27276, dated 2 July 2009. The Regulation determines • coordinating the authorisation of institutions that will perform the procedures and principles of management, allocation, assign- installation, measurement, maintenance and repair activities; ment, national and international coordination and registration of radio • conducting market analyses to determine the relevant market and frequencies assigned, as well as the withdrawal and reassignment of operators that have SMP in the relevant market; assigned frequencies if necessary, for the efficient and effective use of • determining all kinds of procedures and principles regarding fees; radio frequencies. The licences generally specify the permitted use of • inspecting operators; the licensed spectrum under the Regulation. The scope of permitted use • taking necessary measures; is generally determined within the spectrum licences. • making regulations prescribed by the legislation; As per the Regulation, while managing spectrum allocation, ICTA • inspecting the quality and standards of service for all kinds of elec- shall pay attention to providing effective competition, ensuring transpar- tronic communications; and ency and avoiding discrimination. The planning is made pursuant to the • enacting by-laws, communiques and other secondary regulations decisions of organisations such as the International Telecommunication pertaining to the authorisations granted by Law No. 5809. Union, the International Maritime Organisation, the International Civil Aviation Organisation, the EU and the European Conference of Postal Although there is no restriction regarding foreign ownership under and Telecommunications Administrations, and frequencies are assigned the communications law, under the Regulation on Authorisation for to operators that are subject to authorisation for the duration stated in Electronic Communications Sector, for a company to be granted an the certificate of authorisation granted for the right of use. authorisation by ICTA in the communications sector, the company has The trading of licensed radio-frequency spectrum is not prohib- to be duly established as a limited liability or joint-stock company under ited under Turkish legislation. The trading of spectrum licences is not Turkish Commercial Law No. 6102. Also, a foreign entity or individual prohibited; however, to transfer spectrum frequency, operators must can be the sole shareholder of such an authorised company. apply to ICTA for approval. ICTA shall decide for approval upon evaluation of the application by taking into consideration of the market and Authorisation/licensing regime competition conditions of the transferee operator and other related 2 Describe the authorisation or licensing regime. issues. Upon ICTA’s approval, a right of use shall be granted to the transferee operator within one month of the date on which the approval Companies that are willing to provide electronic communications is granted. services or construct and operate electronic communications networks or infrastructure should notify ICTA of their intention before commencing Ex-ante regulatory obligations activities. If the companies that have notified ICTA do not need the 4 Which communications markets and segments are subject to assignment of scarce resources, such as a number or frequency for ex-ante regulation? What remedies may be imposed? electronic communications services or an electronic communications network or infrastructure that they plan to provide or operate, they shall Communications markets that are subject to ex-ante regulation are: be authorised under the notification to ICTA. • the call transfers on the fixed-network market; If the company requires the assignment of scarce resources, it • the call origination on the fixed-network market; shall be authorised upon receiving the right of use from ICTA. ICTA is • the call termination on the fixed-network market; entitled to decide whether it is necessary to grant a right of use to elec- • the fixed-line network access market; tronic communications services. ICTA issues the right of use within 30 • the fixed-voice telephony services market; days upon due application for electronic communications services, for • the wholesale and retail leased-lines market; which the number of rights of use does not need to be limited. • the access and call origination on the mobile-network market; The authorisation fees are stipulated under the Regulation • the call termination on the mobile-network market; and on Authorisation for Electronic Communications Sector. As per the • the wholesale local-access and central-access market. Regulation, for the notification process, an administrative fee of 0.35 per cent of the yearly net sales must be paid to ICTA; for the right-of-use ICTA has the power to make both ex-ante regulations and ex-post regu- process, the specific fee for the relevant resource to be used in the oper- lations. As per article 6 of Law No. 5809 on Electronic Communications, ation must be paid, in addition to the administrative fee. The minimum ICTA is vested with the duty of conducting market analyses to determine fees for the right of use are determined by the Board of Ministers upon the relevant market and the operators that have SMP in this relevant the proposal of ICTA and the resolution of the Ministry. market and to inspect the breaches of competition in the electronic There is currently no distinct regulation regarding 4G, 4.5G and communications sector and impose sanctions if necessary. 5G mobile services. To be able to be granted a spectrum for 5G mobile Sanctions imposed on each of the markets are as follows: services, companies must participate in right-of-use tenders. The • call transfers on the fixed-network market: there are no sanc- tenders regarding 4G and 4.5G have already been realised and finalised, tions imposed; whereas the right-of-use tender regarding 5G mobile services has yet • call origination on the fixed-network market: sanctions imposed to be realised. on operators having SMP are access and interconnection, transparency, publication of reference offer, non-discrimination, tariff control, accounting separation and cost accounting, co-location and infrastructure sharing; www.lexology.com/gtdt 165 © Law Business Research 2021 Turkey SRP Legal

• call termination on the fixed-network market: sanctions imposed Universal service obligations and financing on operators having SMP are access and interconnection, trans- 6 Outline any universal service obligations. How is provision of parency, non-discrimination, quality of service, tariff control, these services financed? accounting separation and cost accounting, co-location and infrastructure sharing. Sanctions imposed on operators that do not have Law No. 5369 on Universal Services stipulates the rules to promote SMP are interconnection, non-discrimination and transparency; access to telecom services in rural or under-served areas. Accordingly, • fixed-line network access market: sanctions imposed on operators operators that have a general authorisation, concession and authori- having SMP are access, wholesale of leased lines, carrier selection sation agreement or a licence in the telecommunications sector are and pre-selection, non-discrimination, transparency, publication of incumbent universal service providers. reference offer and tariff control; Under Law No. 5369, universal services include fixed telephone • fixed-voice telephony services market: there are no sanc- services, public payphone services, telephone directory services tions imposed; (printed or directories on electronic media), emergency call services, • wholesale and retail leased-lines market: sanctions imposed on internet services, passenger transportation services for settlements to wholesale leased lines are access, non-discrimination, trans- which maritime lines is the single option of access and communications parency, publication of reference offer, tariff control, accounting services regarding distress and safety at sea. separation and cost accounting and co-location and infrastructure For the financing of universal services provided, Turk sharing. Sanctions imposed on retail leased lines are tariff control Telekomunikasyon AS and operators other than mobile operators are and accounting separation and cost accounting; obliged to declare to the Ministry 1 per cent of their annual net sales • access and call origination on the mobile-network market: there proceeds by the end of April of the following year. Mobile operators are are no sanctions imposed; obliged to declare to the Ministry 10 per cent of the share they are to • call termination on the mobile-network market: sanctions imposed pay the Treasury within the month of payment. ICTA is obliged to declare on mobile network operators are interconnection, non-discrim- to the Ministry 20 per cent of the administrative penalties it has applied ination, quality of service, transparency, publication of reference under the relevant laws by the end of the month following the month offer, tariff control, accounting separation and cost accounting of collection and is obliged to declare to the Ministry 20 per cent of the and co-location. Sanctions imposed on other mobile operators are amount remaining after all expenditure is met at the end of the fiscal interconnection, non-discrimination and transparency; and year by the end of January every year. • wholesale local-access and central-access market: sanctions Following the collection of the above-mentioned amounts, the net imposed are access, co-location and infrastructure sharing, tariff cost incurred owing to the operator’s obligations to provide universal control, publication of reference offer, non-discrimination, trans- services and other expenses incurred within the scope of Law No. 5369 parency and accounting separation and cost accounting. shall be financed by the Ministry.

Structural or functional separation Number allocation and portability 5 Is there a legal basis for requiring structural or functional 7 Describe the number allocation scheme and number separation between an operator’s network and service portability regime in your jurisdiction. activities? Has structural or functional separation been introduced or is it being contemplated? Under Law No. 5809 on Electronic Communications, ICTA is authorised to allocate numbers and to prepare the National Numbering Plan and Under article 6 of Law No. 5809 on Electronic Communications, ICTA the National Frequency Plan under the policies of the Ministry. Number is vested with inspecting breaches of competition in the electronic allocation and usage principles are specifically regulated under the communications sector, imposing sanctions and taking the opinion of Numbering Regulation. The purpose of that regulation is to ensure the Competition Authority on issues regarding breach of competition. that the numbers used in the electronic communication networks are Additionally, as per article 7 of Law No. 5809, the Competition Board, planned in a national context and are used effectively and efficiently while performing examinations and supervisions and while making any under the stipulated plan. decisions on the electronic communications sector, including decisions Number portability is mainly regulated under the Regulation on about mergers and takeovers, primarily takes into consideration ICTA’s Number Portability, which was amended under the Regulation on the view and the regulatory procedures of ICTA. Amendment of the Regulation on Number Portability published in the The Competition Board is also authorised to decide on a structural Official Gazette No. 29546, dated 28 November 2015. As per the Regulation or functional separation between an operator’s network and service on Number Portability, subscribers may change their operator, geograph- activities, taking ICTA’s view on the matter into consideration. That ical position and service type without having to change their subscriber was the case during the privatisation of the incumbent operator: Turk number. Operators are under the obligation to provide number portability. Telekomunikasyon AS. Under Decision No. 05-48/681-175 of 21 July 2005 of the Competition Authority, rendered upon taking the view of Customer terms and conditions ICTA (which was referred to as the Telecommunication Authority at the 8 Are customer terms and conditions in the communications time of the decision), TTNET AS was structurally separated from Turk sector subject to specific rules? Telekomunikasyon AS and, as of 28 April 2006, TTNET AS was established as a separate legal entity. However, as of 27 January 2016, Turk The customer terms and conditions between subscribers and opera- Telekomunikasyon AS and TTNET AS have once again merged. tors are subject to the Regulation on Customer Rights in Electronic Communications Sector. The Regulation on Customer Rights in Electronic Communications Sector requires operators to be fully transparent and lays the burden of proof on the operator concerning subscriber requests and approvals. Pursuant to the Regulation on Customer Rights in Electronic Communications Sector, the customers have the following rights:

• access to services under the same terms with similar customers following its publication in Official Gazette No. 31202, dated 31 July and benefiting from the services with fair prices without any 2020, some amendments, especially those for the control of social discrimination; media networks, have been made in the Law No. 5651. The purpose • entering into agreements with the authorised operators, requesting of the amendments regarding social media networks was shown in that their personal data be or not be included in publicly available the justification of Law No. 7253 as ‘the need to impose obligations on directories; social networking platforms as well as states to take responsibility in • benefiting from directory services being free of charge or for a combating illegal content’. price and being able to register with the directories without any In addition to the definitions such as content provider, hosting discrimination; provider, access provider and collective-use provider, the definition of • being informed of the emergency call services and accessing those ‘social-network provider’ has been added to Law No. 5651. Accordingly, services free of charge; social network providers are defined as ‘real or legal persons that enable • requesting itemised invoices; users to create, view or share content such as text, images, sounds, loca- • requesting information about the scope of the services to be tions on the internet for social interaction purposes’. The definition of provided by the operators; the traffic information that the hosting providers are obliged to keep for • access to clear, detailed and current information on the tariffs to certain periods regarding the services they provide, internet protocol be applied to the customers and being informed of any change to address, service start-end time, service type, transferred data amount those tariffs before such change is applied; and subscriber credentials, as well as ‘port information’ (virtual ports • opting out in a simple way or by an original way of application to that are redirected via the internet or software) has also been added. the service, from all the services under the campaigns or tariffs In addition to the decision to block access, it is now possible to including value-added services that they opted in through short decide to remove the content. message service, call centre or internet; Social network providers established abroad accessed by more • requesting equal treatment without any discrimination concerning than one million daily users are obliged to appoint at least one legal or resolving the malfunction problems; and natural person as a representative in Turkey to fulfil the requirements • receiving services in the standards determined by ICTA or by inter- of notifications and requests to be sent by official institutions, to respond national institutions. to applications made by individuals under Law No. 5651 and to ensure that other obligations under Law No. 5651 are fulfilled. If the represent- Last, the agreement between the customer and the operator must be ative is a natural person, they must be a Turkish citizen. If the social made in writing under the Regulation on Customer Rights in Electronic network provider does not fulfil the obligation to appoint a representa- Communications Sector. tive despite the notification made by the Information and Communication Technologies Authority (ITCA), they may be subject to sanctions such as Net neutrality administrative fines of up to 40 million Turkish lira in total, an advertising 9 Are there limits on an internet service provider’s freedom to ban and a reduction of internet traffic bandwidth of up to 90 per cent. control or prioritise the type or source of data that it delivers? Another obligation for social network providers that are domes- Are there any other specific regulations or guidelines on net tically based or established abroad with more than one million daily neutrality? users is to take the necessary measures to retain data in Turkey of those users located in Turkey. However, any specific sanction to be applied in There are no regulations regarding net neutrality under Turkish legis- case of a violation of this obligation has not been foreseen. lation. However, in 2012, to restore net neutrality, ICTA imposed an Last, the social network provider will be responsible for the administrative fine against an internet service provider owing to the compensation of the damages arising from content determined to be internet service provider blocking some websites on its network without illegal by a judge or court decision is notified to the social network any court or competent authority’s decision. provider and the network provider did not remove the content or block access within 24 hours. Platform regulation 10 Is there specific legislation or regulation in place, and have Next-Generation-Access (NGA) networks there been any enforcement initiatives relating to digital 11 Are there specific regulatory obligations applicable to platforms? NGA networks? Is there a government financial scheme to promote basic broadband or NGA broadband penetration? There are general and specific laws and regulations that apply to digital platform providers. For instance, Law No. 5809 on Electronic In Turkey, there is no specific regulation in force for NGA networks. Communications includes provisions regarding digital platforms providing However, there are several ICTA board decisions regulating the NGA services by satellite broadcasting. Also, Law No. 6563 on Regulation of networks. In ICTA’s 2020 plan, it is stipulated that new monitoring Electronic Commerce regulates the rules and procedures for electronic stations and vehicles, as well as hardware and software, will be supplied commerce platforms and digital marketing. Further, Law No. 4054 on the to adapt to new-generation technologies. Besides this, ICTA has also Protection of Competition in Turkey applies to the digital platform markets published several public releases indicating that the NGA penetration in Turkey. Moreover, all content published on the internet is subject to should be increased. Law No. 5651 on Regulating Broadcasting in the Internet and Fighting against Crimes Committed through Internet Broadcasting. Law No. 5651 Data protection restricts the publication of content constituting certain types of crime and 12 Is there a specific data protection regime applicable to the content violating the rights of third parties. Last, digital platforms are also communications sector? subject to the laws and regulations on data protection and privacy. With the Law No. 7253 on the Amendment to the Law on Regulation Data protection in the electronic communications sector is mainly of Publications on the Internet and Combating Crimes Committed regulated under Law No. 5809 on Electronic Communications and the through Such Publication, (Social Media Law), which entered into force Regulation on Processing of Personal Data and the Protection of Privacy www.lexology.com/gtdt 167 © Law Business Research 2021 Turkey SRP Legal

in the Electronic Communications Sector (the Regulation), published in Data localisation the Official Gazette No. 28363, dated 24 July 2012. Under these specific 15 Are there any laws or regulations that require data to be laws and regulations, operators are obliged to protect subscribers’ stored locally in the jurisdiction? information and their privacy. Also, communication must not be listened to, recorded, stored, intercepted or tracked without the explicit consent Under Law No. 5809 on Electronic Communications, data belonging to of all the relevant parties to the communication, except in cases where customers may only be transmitted abroad upon the consent of the the relevant legislation and judicial decisions so require. Moreover, customer. The Regulation on Processing of Personal Data and Protection traffic and location data may be transferred abroad only with the explicit of Privacy in the Electronic Communications Sector (the Regulation), consent of the data subjects. Last, operators are obliged to take neces- published in the Official Gazette No. 31324, dated 4 December 2021, sary technical and administrative measures to ensure the security of also stipulates that data transfer to third parties located abroad may the networks and personal data of the subscribers. Besides this, opera- only be realised upon the consent of the customer. In this scope, the tors are subject to the Law on Personal Data Protection for the general customer has to be informed regarding the country to which the data is rules, principles and procedures regarding data protection and privacy transferred, the scope and period the data will be kept and the relevant they process in their data-filing system. legislation and practice in the country. Additionally, operators are also subject to Law No. 6698 on Personal Cybersecurity Data Protection in terms of the general rules, principles and procedures 13 Is there specific legislation or regulation in place concerning of personal data processing and protection. Therefore, operators, while cybersecurity or network security in your jurisdiction? transferring personal data, must ensure compliance with and fulfilment of the requirements arising from both regulations. The Council of Ministers’ Decision on Conducting, Managing and Coordinating National Cybersecurity Activities (the Decision), which Key trends and expected changes entered into force on 20 October 2012, is one of the important legislative 16 Summarise the key emerging trends and hot topics in developments regarding cybersecurity in Turkey. Also, a Cybersecurity communications regulation in your jurisdiction. Board was established under the Decision, the duties of which include approval of policies, strategies and action plans regarding cybersecurity One of the most significant legislative developments is the Regulation and rendering of decisions regarding their implementation nationwide on Processing of Personal Data and Protection of Privacy in Electronic in an effective manner, resolving proposals regarding the determination Communications (Regulation). As per the Regulation, ICTA is given of critical infrastructure and determining the institutions to be wholly or a more dominant role in the operations and practices of operators partially exempt from cybersecurity provisions. concerning the processing of personal data. On the other hand, electronic communication sector-specific On another note, the Ministry has announced that there has been cybersecurity provisions are regulated with the secondary regula- major progress in preparations regarding the 5G mobile service infra- tion, the Regulation on Network and Information Security in Electronic structure, and it is anticipated that the transition to 5G has yet to be Communication Sector. This Regulation, which regulates and underlines realised. ICTA has also announced that the 5G core network, 5G base technical, administrative, organisational and physical measures to be station, 5G specific management, service and operation software prod- taken by operators, does not apply for personal data processing and ucts are being developed with local and national capabilities and the protection. first phase is expected to be concluded by March 2021. Under the Regulation on Administrative Sanctions No. 28914, Also, the Deputy Minister of the Ministry announced that ICTA has issued by ICTA, any natural or legal entity who fails to comply with the made the necessary arrangements and embedded-SIM (eSIM) will be obligations related to network and information security and cyberse- implemented in Turkey by 2021. The eSIM technology in question is curity measures to be determined by ICTA shall be imposed with an produced by Turkish engineers and the Ministry announced that it will administrative fine of 1,000 to 1 million Turkish lira. be implemented in 2021. TÜRKSAT 5A, whose production has been completed, is expected Big data to be launched into space towards the end of 2021. It is expected that 14 Is there specific legislation or regulation in place, and have TÜRKSAT 5B will be launched into space in 2022. TÜRKSAT 6A, which there been any enforcement initiatives in your jurisdiction, will be the first domestic communication satellite, has been completed, addressing the legal challenges raised by big data? and it, too, is planned to be launched into space in 2022, making Turkey become one of 10 countries producing communications satellites in There is no specific regulation regarding big data within the frame the world. of Turkish legislation. However, if big data involves the processing of Last, the Ministry published the national cybersecurity strategy personal data, personal data-related provisions can be applied for. and action plan for 2020 to 2023. If big data does not involve personal data but involves non- personal data (eg, anonymous data, commercial information and trade MEDIA secrets etc), non-personal data-related provisions can apply to those processing activities. For instance, it can be said that the Regulation on Regulatory and institutional structure Network and Information Security in Electronic Communication Sector 17 Summarise the regulatory framework for the media sector in excludes personal data processing and protection but can apply to big your jurisdiction. data processing in the electronic communications sector. The key regulations governing the media sector in Turkey constitute: • the Constitution of the Republic of Turkey (No. 2709); • international agreements (the European Convention on Transfrontier Television); • sector-specific Laws (Press Law No. 5187): • Law No. 4982 on the Right to Obtain Information;

• Radio and Television Law of Turkey (No. 2954); the deputy chair and the majority of the board of executives and the • Law No. 6112 on the Establishment and Broadcasting Services of general director of the broadcasting enterprises must be citizens of Radio and Television Enterprises; Turkey, and the majority of the votes in the general assemblies of broad- • Law No. 3093 on Radio and Television Incomes in Turkey; casting enterprises should belong to the real or legal persons holding • Law No. 5651 on Regulating Broadcasting in the Internet and Turkish citizenship. Last, foreign shareholders shall, by no means, own Fighting Against Crimes Committed through Internet Broadcasting); preference shares, as domestic shareholders do not. • general laws (Industrial Property Law No. 6769, Turkish Criminal In terms of the cross-ownership of media companies, the same Law No. 5237, Turkish Law No. 6098); Regulation indicates that a real or legal person can be a partner directly • regulations (the Advertisement Regulation of Radio and Television or indirectly of a maximum of four media service providers holding Authority of Turkey); and terrestrial broadcasting licences. However, in the case of partnership in • directives, communiques, principles and procedures, instructions more than one media service provider, annual total commercial commu- executing and enforcing and the decisions rendered by the relevant nication revenue of those media service providers in which a real or authority. legal person has direct or indirect shares shall not exceed 30 per cent of the total commercial communication revenue of the sector. The real or In 2019, the following developments took place: legal persons whose total commercial communication revenue exceeds • the Regulation on Procedures and Principles regarding the this rate shall transfer their shares in media service providers so that it Improvement of Broadcasting Services Access by Hearing and will be reduced down to the aforesaid rate within a time limit of 90 days Visually Handicapped, published in the Official Gazette, dated 11 given by the RTSC. October 2019, and numbered and fully entered into force on 11 January 2020; and Licensing requirements • the Regulation on Radio, Television and On-Demand Broadcasts 19 What are the licensing requirements for broadcasting, on the Internet (the RTI Regulation) published in Official Gazette including the fees payable and the timescale for the No. 30849, dated 1 August 2019 and fully entered into force on 1 necessary authorisations? September 2019. The essential point is that the RTI Regulation is also applicable for content or hosting providers located in a foreign First, it is necessary to define ’broadcasting licence’ under Law No. 6112 country, and media service providers that perform their business on the Establishment and Broadcasting Services of Radio and Television activities under the jurisdiction of the established country. In addi- Enterprises. ‘Broadcasting licence’ means the certificate of permission tion, media service providers broadcasting over the internet in issued separately for each broadcasting type, technique and network by Turkish and targeting Turkey, or broadcasting in another language the RTSC to media service providers to allow them to broadcast using any but targeting Turkey and also including commercial broadcasts kind of technology via cable, satellite, terrestrial and similar networks. to Turkey are subject to the RTI Regulation. However, individual Under Law No. 6112, a broadcasting licence may only be granted communications are excluded from its scope. to joint-stock companies established under Turkish Commercial Code No. 6102. The scope of the purpose of the joint-stock company has to The Radio and Television Supreme Council (RTSC), founded in 1994, is be exclusively determined, concerning providing radio, television and the administratively and financially autonomous and impartial public on-demand broadcast service. legal authority for the regulation and supervision of radio, televi- However, political parties, unions, professional associations, coop- sion and on-demand media services. In the field of audiovisual media eratives, associations, societies, foundations, local administrations and services, the main function of the RTSC is taking essential precau- companies established by them or of which they are direct or indirect tions for securing freedom of expression and information, diversity of shareholders, stockbroker companies and real or legal persons who are opinion, media pluralism, competition environment for avoiding media direct or indirect shareholders of these companies are not allowed to concentration and protecting public interests. On the other hand, the apply for a broadcasting licence. Information Technology and Communication Authority (ICTA), the Media service providers shall apply for a separate licence for each national telecommunications regulatory and inspection authority, may broadcasting technique and network to the RTSC to be able to broad- also be intervened and act in some cases in this sector. For instance, cast through cable, satellite, terrestrial and similar networks. It should under the RTI Regulation, ICTA is entitled to impose administrative fines be clearly indicated in the licence document for which broadcasting on companies that do not abide by the decisions of the Criminal Court. technique and network the licence is granted. Enterprises requesting to make a simultaneous broadcast on different networks by different Ownership restrictions techniques should apply for separate licences for each broadcasting 18 Do any foreign ownership restrictions apply to media technique and network and must provide a simultaneous broadcast. services? Is the ownership or control of broadcasters As per Law No. 7103 on Amending Tax Laws, Certain Laws and otherwise restricted? Are there any regulations in relation Certain Decree Laws stipulating amendments to Law No.6122, media to the cross-ownership of media companies, including radio, service providers and online broadcast platforms that only broad- television and newspapers? cast content over the internet are also subject to these licensing requirements. Certain restrictions regarding foreign ownership have been stipulated As per online broadcasting, the Regulation on Radio, Television under Law No. 6112 on the Establishment and Broadcasting Services of and On-Demand Broadcasts on the Internet (the Regulation) outlines Radio and Television Enterprises. For instance, the total direct foreign licensing requirements regarding three types of licences, namely: capital share in a media service provider shall not exceed 50 per cent • the INTERNET-RD broadcast licence for online radio services; of the paid-in capital. Further, a foreign real or legal person can directly • the INTERNET-TV broadcast licence for online television become a partner of a maximum of two media service providers. services; and Although it is important to point out that if foreign real or legal persons • the NTERNET-IBYH broadcast licence for online on-demand broad- hold shares in companies that are shareholders of media service cast services. providers and become an indirect partner of the broadcasters, the chair, www.lexology.com/gtdt 169 © Law Business Research 2021 Turkey SRP Legal

As per the Regulation, online broadcasting licences shall only be granted Advertising to joint-stock companies established as per Turkish Commercial Law 21 How is broadcast media advertising regulated? Is online No. 6102, exclusively established for providing radio, television and advertising subject to the same regulation? on-demand broadcasting services. Under the Regulation, online platform operators that provide The main pieces of legislation governing broadcast media advertising various radio, television and on-demand broadcasts through their are Law No. 6112 on the Establishment and Broadcasting Services of uniform resource locator address or mobile applications must obtain Radio and Television Enterprises and the Advertisement Regulation of internet broadcast transmission authorisation from the RTSC. Radio and Television Authority of Turkey. The term of a broadcasting licence is 10 years, both according to As per Law No. 6112, advertisements and teleshopping in televi- Law No. 6112 and the Regulation, and there are no specific timescale sion and radio broadcasting services must be broadcast in a manner provisions for obtaining authorisation from the RTSC. that is easily distinguishable from the rest of the elements of the Licence fees are determined each year by the RTSC, and the most broadcasting programme services, by way of the use of audio or visual recent information on satellite, cable and online broadcasting licence warnings. Broadcast media advertisements are also within the scope of fees for radio, television and demand broadcasting services can be the Regulation on Commercial Advertisements and Unfair Practices (the found on the RTSC website. Regulation) published in Official Gazette No. 29232, dated 10 January 2015. Thus, advertisements and teleshopping must be made in compli- Foreign programmes and local content requirements ance with the Regulation. 20 Are there any regulations concerning the broadcasting Online advertising is subject to the Consumer Protection Law of foreign-produced programmes? Do the rules require a and the Commercial Advertisement Regulation, which are the main minimum amount of local content? What types of media fall legislation concerning advertisement rules. The Advertisement Board outside this regime? regulates the compliance of advertisements in all media, except for specific broadcasting rules that are governed under Law No. 6112. Law No. 6112 on Establishment and Broadcasting Services of Radio Also, all online broadcasts in Turkey are subject to Law No. 5651 on and Television Enterprises does not prohibit broadcasting in foreign Regulating Broadcasting in the Internet and Fighting against Crimes languages; however, broadcasts made in foreign languages shall follow Committed through Internet Broadcasting. If the content of an online the rules of that preselected language and be supervised by the RTSC. broadcast, including online advertising, constitutes specific crimes that On the other hand, the Regulation on the Procedures and Principles are listed in this Law, access to this website could either be banned of Media Services stipulates that providing broadcasts in languages by the Information Technology and Communication Authority or by the and dialects other than Turkish by media service providers is subject court, depending on the type of case and urgency. to permission to be issued by the RTSC. Thus, the RTSC permits broadcasting in a foreign language if it finds the media service provider’s Must-carry obligations application appropriate according to their broadcasting area and tech- 22 Are there regulations specifying a basic package of nical facilities. However, no permission is required for on-demand media programmes that must be carried by operators’ broadcasting services in languages and dialects other than Turkish. distribution networks? Is there a mechanism for financing the Under the same Law, if television enterprises that conduct general costs of such obligations? and thematic broadcasts include cartoons in the broadcasts for children, at least 20 per cent of the cartoons, and at least 40 per cent of There are no regulations regarding must-carry obligations under other children’s programmes, shall be productions made in the Turkish Turkish legislation. language and reflect Turkish culture. There are no further local content quotas for media service providers. Regulation of new media content However, content to be broadcast for television broadcasters 23 Is new media content and its delivery regulated differently holding a national terrestrial broadcasting licence is as follows: from traditional broadcast media? How? • television broadcasters are obliged to allocate at least 50 per cent of their broadcast time to European works, excluding the time Internet-based on-demand content has been traditionally regulated by allocated to news, sports events, contests, advertisements, tele- Law No. 5651 on Regulating Broadcasting in the Internet and Fighting shopping and related data broadcasts; and Against Crimes Committed through Internet Broadcasting. However, • they must allocate 10 per cent of their broadcast time or programme with the amendments to Law No. 6112 on the Establishment and budget broadcasts to European works of independent producers, Broadcasting Services of Radio and Television Enterprises, media excluding the time allocated to news, sports events, contests, service providers that make online broadcasting and platform operators advertisements, teleshopping and related data. that transmit these broadcasts via the internet are required to obtain a licence from the RTSC and online broadcasting activities are subject Additionally, as per the Regulation on Radio, Television and On-Demand to supervising and controlling of the RTSC under the same principles Broadcasts on the Internet, the broadcasting services of foreign media applied to TV and radio broadcasts as per Law No. 6112. service providers and foreign internet broadcasting platform operators Moreover, unlike traditional broadcast media such as radio under the jurisdiction of a country other than Turkey may be suspended and television, new media content is regulated under Law No. 5651. by the RTSC if it is decided by the RTSC that the media service providers Additionally, advertisements made via new media content are also or internet broadcasting platform operators have acted in violation of subject to Law No. 5651. Law No. 6112 or any international treaties within the scope of the RTSC’s authority to which Turkey is a party.

Digital switchover cooperative effort of ICTA and the RTSC. It is understood that the two 24 When is the switchover from analogue to digital broadcasting authorities are carrying out their activities in cooperation. required or when did it occur? How will radio frequencies As per the recently enacted Regulation, online broadcasting freed up by the switchover be reallocated? of radio, television and on-demand broadcasts shall fall under the authority and supervision of the RTSC, and online broadcast platforms Under Law No. 5651 on Regulating Broadcasting in the Internet and that only broadcast content over the internet shall also be obliged to Fighting Against Crimes Committed through Internet Broadcasting, obtain licences from the RTSC. As per the Regulation, the RTSC is now companies that obtained the right to a terrestrial digital multiplex also vested with the power to suspend online broadcasts that violate the capacity allocation in the ranking tender realised under the Regulation Regulation and Law No. 6122. Additionally, the broadcasting services of regarding Procedures and Principles on Terrestrial Broadcast Licences foreign media service providers and foreign internet broadcasting plat- and the Ranking Tender published in Official Gazette No. 30634, dated 23 form operators under the jurisdiction of a country other than Turkey December 2018, may, in line with their ranks and the analogue channel may be suspended by the RTSC, if it is decided by the RTSC that said capacity, be granted the right to make analogue broadcasts as well as media service providers or internet broadcasting platform operators terrestrial digital broadcasts for a period of a maximum of two years. have acted in violation of Law No. 6112 or any international treaties At the end of the two years, analogue broadcasts shall be terminated within the scope of the RTSC’s authority to which Turkey is a party. nationwide. The transition from analogue broadcasting to digital broad- Additionally, media service providers who transmit radio, television casting has not yet been completed. and on-demand broadcasts through the internet must obtain a broadcast licence from the RTSC. Specifically, licences are now required for Digital formats the activities listed below: 25 Does regulation restrict how broadcasters can use their • an INTERNET-RD broadcast licence for online radio services; spectrum? • an INTERNET-TV broadcast licence for online television services; and • an INTERNET-IBYH broadcast licence for voluntary broad- First, according to Law No. 5809 on Electronic Communications, ICTA cast services. is the competent authority for spectrum management, supervision and inspection in Turkey. However, under Law No. 5809, the RTSC is the Broadcast licences shall be granted exclusively to joint-stock compa- competent authority regarding the regulation of radio frequencies and nies established according to the Turkish Commercial Code Each media television channel broadcasts. service provider has the right to broadcast one radio, one television and The regulation restricts how broadcasters can use their spectrum. one on-demand service online and must obtain separate licences for So, after obtaining the terrestrial broadcast licence, current transmit- each of these broadcasters. ting facilities must be removed by the private media service providers Also, platform operators must obtain authorisation from the RTSC or must be transferred to a transmitter procurer and operating company to begin broadcasting. in exchange for a reasonable sum. In 2020, on-demand publishing licence applications were evalu- Under Law No. 6112 on the Establishment and Broadcasting ated by the RTSC. As a result, national and international organisations Services of Radio and Television Enterprises, the RTSC shall adopt that have continued their activities with a temporary broadcast permis- frequency plans concerning television channels and radio frequencies, sion for some time applied for a licence upon the notice of the RTSC within the framework of the frequency bands for terrestrial radio and and fulfilled the necessary obligations. International broadcast plat- television broadcasts allocated under Law No. 5809. Within the scope forms have established a joint-stock company resident in Turkey, and of the frequency plans the numbers and types of national, regional and general managers and representatives were appointed to the organisa- local terrestrial broadcast networks, as well as multiplex numbers for tions. The RTSC decided to issue 10-year on-demand broadcast service digital broadcasts, shall be determined. through the internet (Internet- IBYH) licences to Netflix, Amazon Prime Video, Fizy, TV8, Diyanet TV and Powerapp Music. Also, On Media was Media plurality authorised for internet transmission using the radio (Internet-RD) and 26 Is there any process for assessing or regulating media television (Internet-TV) licences, together with channel TV +. plurality (or a similar concept) in your jurisdiction? May the In the last quarter of 2019, significant negotiations were initi- authorities require companies to take any steps as a result of ated in connection with foreign broadcasting platforms in addition to such an assessment? local broadcasting platforms. As per the announcements published by the RTSC: Under Law No. 6112 on the Establishment and Broadcasting Services of • special importance shall be given to artificial intelligence; Radio and Television Enterprises, one of the duties of the RTSC is to take • when evaluating broadcasts, matters such as cyberbullying and essential precautions, in the field of media services, for media pluralism. violence shall be taken into consideration; On the other hand, the maximum number of media service providers • measures shall be taken for content that may adversely affect the in which a real person or a legal entity may directly or indirectly hold psychological and physical development of children; and shares is four. However, there is no specific regulation concerning • in connection with on-demand broadcasts, special attention shall media plurality in Turkey. be given to parental control mechanisms

Key trends and expected changes Some of the relevant expected changes and the steps to be taken 27 Provide a summary of key emerging trends and hot topics in accordingly within the media sector are as follows: media regulation in your country. • informing the legislative organ about the need for new regulations regarding issues on the establishment of a more effective sanction The most important piece of legislation currently adopted in Turkey system and the implementation of joint audit in connection to new is the Regulation on Radio, Television and On-Demand Broadcasts on technological developments; the Internet (the Regulation), which was published in Official Gazette • the strengthening of the cooperation among shareholders in the No. 30849, dated 1 August 2019. The Regulation has been drafted as a media sector; www.lexology.com/gtdt 171 © Law Business Research 2021 Turkey SRP Legal

• the drafting of more explicit and concrete regulations by the RTSC, After radio and television broadcasting, on-demand over the an independent and unbiased authority, especially regarding internet was taken under the control of RTÜK, the Supreme Council broadcasting principles in areas that are conceived negatively; discussed the file of a select-watch platform for the first time. RTÜK • the re-evaluation and revision of the legislative regulations in unanimously decided that the Minnoşlar film, which will be broadcast a manner that enhances the freedom of speech and freedom of on Netflix on 9 September 2021 and criticised for allegedly containing information stipulated under the laws; child abuse, should be removed from the catalogue. It also fined Netflix • the establishment of a more efficient mechanism to enable the for violating its streaming policy. consent analysis of the regulatory needs within the media sector Last, both the RTSC and ICTA must cooperate with the Competition and the overcoming of issues regarding regulatory activities; Authority regarding matters relating to competition and anti-competi- • conducting studies by ICTA to pave the way for domestic and tive practices. There have been cases where cooperation between ICTA national productions on new technologies to ensure cybersecu- and the Competition Authority has been low, and there have been some rity while it is at the design stage; and disputes regarding the respective scopes of the two authorities. ICTA • the draft Türk Telekomünikasyon A.Ş. Reference Interconnection and the Competition Authority signed a cooperation protocol in 2011 Offer opened to Public Opinion. and the scope of this protocol was expanded on 22 January 2015. This protocol aims to ensure the cooperation of the two regulatory bodies REGULATORY AGENCIES AND COMPETITION LAW and avoid conflicts of jurisdiction. However, within the scope of article 7 of the protocol, article 6/2 of Law No. 5809 regarding seeking the Regulatory agencies opinion of the Competition Authority has been emphasised. 28 Which body or bodies regulate the communications and media sectors? Is the communications regulator separate Appeal procedure from the broadcasting or antitrust regulator? Are there 29 How can decisions of the regulators be challenged and on mechanisms to avoid conflicting jurisdiction? Is there a what bases? specific mechanism to ensure the consistent application of competition and sectoral regulation? The Radio and Television Supreme Council, the Information and Communication Technologies Authority and the Competition Authority The communications sector is governed by Law No. 5809 on Electronic are all independent and impartial administrative authorities and render Communications. Whereas the media sector is mainly governed by administrative decisions related to the media sector in Turkey. The deci- Law No. 6112 on the Establishment of Radio and Television Providers sions are rendered under the earlier-mentioned laws and regulations, and Broadcasting Services, the communications regulator is sepa- and also the administrative laws and regulations, mainly Law No. 2577 rate from the broadcasting regulator. The competent authority for on Administrative Procedures. Criminal courts of peace, administrative the communications sector is the Information Technology and courts and the Council of State are competent for legal actions to be Communication Authority (ICTA) and the Competition Authority, taken against these administrative decisions. whereas the competent authority for the media sector is the Radio Decisions rendered by the Board of Advertisement, established and Television Supreme Council (RTSC). However, concerning online under the Ministry of Trade, can also be brought to administrative courts. broadcasting, both ICTA and RTSC are vested with certain regula- In principle, the time to bring an action for nullity is 60 days from tory powers. Last, the Competition Authority is the main competition the notification of the decision. Under Law No. 2577, an action for nullity and antitrust monitoring authority, and the primary law applied is against administrative decisions and actions can be brought forward Competition Law No. 4054. under the following circumstances: Besides this, the Advertisement Board, established under the • If the administrative decision is not made by the competent govern- Turkish Ministry of Commerce, is the main authority that is entitled to mental body; or monitor and supervise advertisements for all media, including broad- • If the form, rationale, subject or objective of the administrative deci- casts in Turkey and to determine the related rules and impose fines in sion is against the law. the case of violations. Under article 6/1 of Law No. 5809, one of the powers vested Administrative court decisions can be appealed before the regional in ICTA is the undertaking of regulations to establish and protect administrative courts within 30 days, starting with notification of the competition and to prevent activities that prevent, distort or restrict court’s decision. competition, and to impose remedies on operators with significant market power and other operators, if necessary. However, under para- Competition law developments graph 2 of the same article, it is stipulated that ICTA, while inspecting 30 Describe the main competition law trends and key merger competition breaches against the same Law concerning the electronic and antitrust decisions in the communications and media communications sector, and imposing sanctions, seeks the opinion of sectors in your jurisdiction over the past year. the Competition Authority on issues regarding breaches specified by the legislation. Moreover, under Law No. 5809, ICTA is authorised to One of the most important decisions rendered by the Competition conduct analysis and investigations and impose sanctions regarding Authority is the decision regarding Google LLC, Google International anti-competitive activities and practices, on the condition that the LLC andGoogle Reklamcilik ve Pazarlama Ltd Sti (Google). In the deci- opinion of the Competition Authority is also demanded. However, the sion, dated 19 September 2018, the Competition Authority imposed provisions of Law No.4054 are reserved. an administrative fine in the amount of over 98 million Turkish lira on Under Law No. 6112, one of the powers vested in the RTSC is Google, and the decision was finalised on 13 February 2020. The deci- to take the required precautions in the field of broadcast services to sion of the Competition Board was based on article 6 of Law No. 4054 guarantee freedom of expression and information, diversity of opin- on the Protection of Competition, stating that Google has abused its ions, competitive environment reserving the duties and powers of the dominant position in the mobile operating systems sector. Additionally, Competition Authority and pluralism and prevent concentration and the Competition Board granted Google three months to comply with protect the public interest. certain obligations determined in its decision; however, Google has not

172 Telecoms & Media 2021 © Law Business Research 2021 SRP Legal Turkey complied with said obligations. Additionally, another investigation was conducted against Google Reklamcilik ve Pazarlama Ltd. Sti., Google International LLC, Google LLC, Google Ireland Limited and Alphabet Inc. regarding their dominant position allegations on general search- services markets. The Competition Authority imposed an administrative SRP Legal fine of over 19 billion Turkish lira on the parties, and the decision was finalised on 13 November 2020. Further, the Competition Authority recently concluded another investigation against Google Reklamcilik ve Pazarlama Ltd. Sti., Google International LLC, Google LLC, Google Cigdem Ayozger Ongun [email protected] Ireland Limited and Alphabet Inc into abusing its dominant position in the general search-services market, highlighting its local search and Volkan Akbas accommodation price comparison services in a way that excludes [email protected] competitors. The Competition Authority imposed an administrative fine Selin Cetin of over 29 billion Turkish lira on the parties, and the decision was final- [email protected] ised on 8 April 2021. Moreover, The Competition Authority ex officio opened an inves- Şakayıklı Sokak No:10 tigation against Facebook Inc, Facebook Ireland Ltd, WhatsApp Inc Levent and WhatsApp LLC (Facebook) regarding the obligation to share data 34330 Istanbul imposed on WhatsApp users to determine whether the article titled Turkey ‘abuse of dominant position’ of the Law on the Protection of Competition Tel + 90 212 401 44 01 was violated. With the Competition Authority’s Decision No. 21-02/25-10, www.srp-legal.com dated 11 January 2021, it was unanimously decided to impose interim measures on Facebook that Facebook in Turkey shall stop enforcing the conditions imposed on WhatsApp users to use their data for other services as of 8 February 2021, and Facebook shall notify all users who Accordingly, ICTA stated that, operators shall take all necessary accept these conditions or read the informative document and do not measures to ensure that electronic communication services may be accept these conditions that the new conditions regarding data privacy provided without interruption, that any malfunctions that may occur will not be imposed until the mentioned date. are quickly eliminated, capacity increases are carried out quickly Another important decision concerns Huawei Telekomunikasyon against possible network bottlenecks, and that there is no discrimi- Dis Ticaret Ltd Sti (Huawei), dated 30 May 2019. The Competition Board, nation between operators that receive services at a wholesale level upon its investigations concerning the base station hardware and soft- without justified reasons. ware market and the base station antenna market, decided that Huawei Also, measures to be taken by operators for the protection of did not abuse its dominant position in the mobile network sector by way consumer rights during the covid-19 outbreak were adopted by the of predatory pricing. Department of Consumer Rights, No. 2020/DK-THD/100, dated 31 Last, Turkey’s Competition Authority has launched an investigation March 2020. Some of these measures include: into the online advertising sector on 6 March 2021, after the Board’s • Taking all necessary measures, including the development of flex- meeting on 21 January 2021. It is aimed to find out the structure and ible working opportunities with remote or home access within the functioning of the sector, the structural or behavioural competition bounds of possibility, to ensure that call-centre services can be problems in the sector and discuss the adequacy of existing compe- carried out by operators without interruption. tition law instruments and possible new instruments, to establish an • During the epidemic period, similar to the practices seen in national effective competition. In this respect, it is planned to meet with poli- and international examples, taking all necessary steps by the oper- cymakers, enterprises and association of undertakings to find out ators to implement the applications in favour of subscribers in our market failures and competition problems and to propose solutions in country (providing subscribers with discounted or free services the process. or voice, message and data benefits, expiry of the deadline, late payment, line restriction, closure or enforcement providing flex- Coronavirus ibility and convenience to subscribers in the follow-up measures, 31 What emergency legislation, relief programmes and other invoice payment terms and dates, etc). initiatives specific to your practice area has your state • During the epidemic period, due to the possibility that it may not be implemented to address the pandemic? Have any existing possible to send printed invoices to subscribers, sending invoices government programmes, laws or regulations been amended electronically (by using short message service, interactive voice to address these concerns? What best practices are advisable response and email) without requiring additional approval from for clients? subscribers, • In addition to continuing to make mobile electronic communication As a result of some operators submitting their requests to ICTA, the contracts with secure electronic signature over the e-Government measures to be taken by operators, within the scope of all access or portal, taking all necessary security measures in the establish- interconnection offers during the covid-19 outbreak was adopted by ment of subscription contracts, to keep physical contact with the ICTA Decision No. 2020/DK-ETD, dated 31 March 2020. The submitted consumer at a minimum level to prevent the spread of epidemic requests were: effects, without prejudice to the query or verification obligations of • taking measures regarding reference access or interconnection the operators regulated in the legislation. Also, the Procedures and offers or some issues regulated by other regulations of ICTA; Principles Regarding Application for Termination of Subscription • suspending some liabilities temporarily; or Agreements via the E-Government Gateway has been adopted by • granting additional time. the Department of Consumer Rights, with ICTA Decision No. 2020/ DK-THD/139, dated 12 May 2020. www.lexology.com/gtdt 173 © Law Business Research 2021 Turkey SRP Legal

• During the epidemic process, under the Information and Communication Technologies Authority Decision No. 2016/ DK-THD/496, dated 21 December 2016, letter of the Department of Consumer Rights No. E167, dated 4 April 2017, Procedures and Principles Regarding Measures for Socially Supported Sectors, postponing the deadline for three months for submitting the related reports which the operators are obliged to send to ICTA, without prejudice to their liabilities regarding the issue.

Last, the Measures for Remote Access Services document, the document regarding the phishing attacks on the terms ‘Coronavirus’ and ‘COVID-19’ and the measures to be taken against fake applications in this context, and the recommendation document containing the issues to be considered in terms of cybersecurity in the use of videoconfer- encing and meeting software have been published by ICTA.

Raza Rizvi Simmons & Simmons LLP

COMMUNICATIONS POLICY Foreign ownership restrictions that previously applied to onshore companies in the UAE have been eased following amendments under Regulatory and institutional structure Federal Decree-Law No. 26/2020 to the UAE’s Commercial Companies 1 Summarise the regulatory framework for the communications Law (Federal Law No. 2/2015). The new amendments will now allow sector. Do any foreign ownership restrictions apply to foreign investors to own 100 per cent of the shares in an onshore communications services? company. This will, however, be subject to the UAE Cabinet Committee releasing a list of commercial activities considered to have a strategic The United Arab Emirates (UAE) consists of seven emirates, each impact on the UAE’s economy (Strategic Impact List). Companies that of which operates as its own legal jurisdiction, and laws are made at perform these activities will be subject to unspecified minimum UAE both a federal and an emirate level. Some emirates have defined areas ownership or UAE board representation requirements. within them that have been designated as free zones, which typically Although the list is yet to be published, it is expected that many have separate civil and commercial laws for businesses and individuals or all of the sectors listed on the Negative List in the Foreign Direct in the relevant free zone, although they all remain subject to the UAE Investment Law will be listed on the Strategic Impact List. federal criminal law. Examples of free zones in the UAE include Dubai The amendments relating to foreign ownership will take effect only International Financial Centre, Dubai Creative Clusters Authority and after six months from the date of publication in the Official Gazette. The Abu Dhabi Global Markets. For the purposes of this chapter, unless future of free zones in the UAE following these amendments is yet to otherwise specified, we focus on the laws and regulations applying at be decided. a federal level. Companies established in free zones are exempted from these The principal law in the UAE that relates to the communications foreign shareholder restrictions and can be wholly foreign-owned, sector is Federal Law No. 3 of 2003 Regarding the Organisation of the and several international communications operators have established Telecommunications Sector (the Telecoms Law). wholly owned entities in such free zones; however, they cannot offer The Telecoms Law establishes the Telecoms and Digital Government public telecommunications services in the UAE which, since 2006, has Regulatory Authority (TDRA) as the regulator of the telecommunica- been a closed duopoly market. tions and information technology sector in the UAE. The Telecoms Law The two providers of public telecommunications services (du establishes a licensing-based regulatory framework for the supply of and Etisalat) are licensees of the TDRA. The eligibility element of each telecommunications services to customers in the UAE. Article 37 of the licence refers to the licensee being a ‘UAE juridical entity established Telecoms Law, for instance, provides that individuals and corporate and in good standing under the laws of the UAE’. entities may not provide ‘telecommunications services’ through ‘public Other than public telecommunications services, there is scope telecommunications networks’ to customers and ‘subscribers’ without for non-UAE businesses to actively participate in the broader commu- obtaining a licence. Article 37 of the Telecoms Law is complemented by nications sector, although even international businesses that have the TDRA’s Resolution No. (6) of 2008 regarding the Licensing Framework procured a specific licence from the TDRA have largely done so through (the Licensing Framework). The Licensing Framework provides that a UAE-incorporated entity as the licensee. Beyond the provision of public ‘regulated activities in the state are licensable’ by the TDRA. Here, ‘regu- telecommunications services in the UAE, there many businesses offering lated activities’ means the operation of a ‘public telecommunications products and services as part of the wider communications eco-system, network’ or the provision of ‘telecommunication services’. and many of these are not subject to foreign ownership restrictions. Telecommunications services are defined in the Telecoms Law as delivering, broadcasting, converting or receiving, through a telecommu- Authorisation/licensing regime nications network: 2 Describe the authorisation or licensing regime. • wire and wireless communications; • voice, music and other audio material; Under the Telecoms Law, the provision, operation or sale of any tele- • viewable images; communications services through a public telecommunications network • signals used or transmission (other than public broadcasts); in the UAE requires a licence from the TDRA. • signals used to operate and control machinery or equipment; Currently, only two operators are licensed for public telecommunica- • activities relating to the interconnection of equipment with a public tions in the UAE: du and Etisalat. This follows government policy on the telecommunications network; operation of a duopoly in the telecommunications field. We understand the • operating data transmission services, including the internet; and TDRA is not currently considering further licences to break the duopoly. • any other services approved by the High Committee appointed The licences granted to du and Etisalat have various features; for under the Telecoms Law. example, each is required to filter the content that flows through its networks in line with the priorities of the state. Notable content filtering www.lexology.com/gtdt 175 © Law Business Research 2021 United Arab Emirates Simmons & Simmons LLP

takes place concerning matters concerning the state, foreign policy and Structural or functional separation morality issues. The decision as to which content should be filtered is 5 Is there a legal basis for requiring structural or functional essentially made through private discussions between the TDRA and separation between an operator’s network and service the mobile operators (regarding TDRA policies on internet access), activities? Has structural or functional separation been but there is no practice of publishing details on specific content-level introduced or is it being contemplated? filtering rationale. In addition to the duopoly policy on fixed and mobile public tele- There is currently no directive that imposes structural or functional communications services, the TDRA has issued licences to other UAE separation between an operator’s network and its services in the UAE. entities for specific purposes, such as broadcast satellite transmission, public access mobile radio, mobile satellite and satellite services. Universal service obligations and financing All such licences are issued individually to entities meeting various 6 Outline any universal service obligations. How is provision of requirements under the Telecoms Law and under a decision made by these services financed? the TDRA board. A licence can be categorised as either a class licence or an individual licence. Individual licences refer to whether scarce It is the responsibility of the TDRA to oversee the provision of telecom- resources are requested such as spectrum or frequencies; class munications services throughout each emirate of the UAE and ensure licences are issued where non-scarce resources are required and that they are sufficient to meet public demand across the UAE; however, where the activities are insignificant enough that less regulatory super- this has not taken the form of a hard universal service obligation. The vision is required. TDRA fulfils this obligation via its relationships with the state-backed The TDRA requires an application form to be completed by a poten- public telecoms companies who each have references in their licences tial licensee, which includes relevant information such as management to financial obligations around universal service obligations; however, and shareholding structures, their business operations, including these provisions are typically only references back to the general regu- the type of networks and services they intend to provide and funding latory framework rather than a specific, hard obligation. Etisalat’s TDRA sources for these business operations. There is a fixed licence applica- licence differs from that of du on the issue of universal service and has tion fee, which is currently set at 20,000 UAE dirhams. a harder obligation that extends to certain services such as dial-up internet services. Flexibility in spectrum use The two public telecoms operators, du and Etisalat, have a signifi- 3 Do spectrum licences generally specify the permitted use cant government-ownership interest and have invested heavily in or is permitted use (fully or partly) unrestricted? Is licensed infrastructure and broadband. Given the nature of the duopoly, there spectrum tradable or assignable? are no direct government subsidies.

The Telecoms Law gives the TDRA responsibility for managing and Number allocation and portability regulating radio spectrum in the UAE. There is no established spectrum 7 Describe the number allocation scheme and number trading or leasing practice. The TDRA grants temporary authorisations portability regime in your jurisdiction. on application for up to 90 days and such authorisations are specific to the applicant. Under the Telecoms Law, the TDRA has the authority to control the In common with many other jurisdictions, the UAE has its National allocation of telephone numbers and numbering plans. To this end, Spectrum Plan. This is issued by the TDRA and provides that certain the TDRA has released a National Numbering Plan that sets out this services can only be provided within certain spectrum bands. In practice, approach to number allocation. This includes the numbering regimes the TDRA is known to have shown some flexibility in certain cases where used to indicate which emirate the call arose from, as well as reserving this would not cause interference. All of the 800, 900 and 1,800MHz certain numbers for the emergency service and premium paid-for calls. spectrum has been divided between the two mobile operators, which The licensed operators can apply to the TDRA for allocation of a means higher bandwidths can be supported in all frequency bands. Not batch of numbers, which is granted based on capacity, future demand, all the 2,100MHz band is currently licensed and the 3,500MHz band is utilisation by the licensee and administrative effort. The TDRA allocates licenced for fixed wireless access. rights to use numbers in continuous blocks of up to 100,000 numbers. The licensed operators are then responsible for allocating the numbers Ex-ante regulatory obligations to their subscribers. 4 Which communications markets and segments are subject to At the end of 2013, the UAE implemented a mobile number porta- ex-ante regulation? What remedies may be imposed? bility programme. Notwithstanding the mobile virtual network operator or independent branded services, there are only two mobile network Under the Telecoms Law, the TDRA does have the power to issue ex-ante operators in the UAE and so the only number portability is between the regulations and decisions concerning practices, as well as to conduct two. Both networks offer a number porting application form that can be ex-post investigations. Until 2012, it was not uncommon for the TDRA to submitted to request a number transfer. publish determinations and decisions concerning telecommunications services publicly, including on their website. Since 2012, it appears the Customer terms and conditions regulator has taken the decision not to publish such determinations 8 Are customer terms and conditions in the communications and decisions publicly but communicate them only to the relevant enti- sector subject to specific rules? ties instead. The TDRA has a short regulatory policy on ex-ante competition The TDRA is empowered by the Telecoms Law to represent customer safeguards, which details the various factors it may take into account in interests in the UAE. This encompasses issuing rules or regulations assessing competition and dominance in the UAE. The policy provides relating to the terms of supply to the customer and includes consumer wide discretion to the TDRA on the factors to be considered and the protection regulations, such as key terms that must be included in remedies to be imposed depending on the outcome of an assessment of contracts with customers (eg, restrictions on usage and rights to termi- the level of competition in the relevant market. nate) and detailed information that must be provided to the customer

176 Telecoms & Media 2021 © Law Business Research 2021 Simmons & Simmons LLP United Arab Emirates before the purchase of a service. The TDRA has also issued a consumer obtaining the consent of relevant individuals). There are also pockets protection guide that sets out a customer’s rights concerning their of data regulation seen in certain specific verticals, for example, in the service contract, the privacy of information, access to services and healthcare and consumer payments verticals. several others. Cybersecurity Net neutrality 13 Is there specific legislation or regulation in place concerning 9 Are there limits on an internet service provider’s freedom to cybersecurity or network security in your jurisdiction? control or prioritise the type or source of data that it delivers? Are there any other specific regulations or guidelines on net Key primary legislation relating to cybercrime includes Federal neutrality? Decree-Law No. 5 of 2012 on Combating Information Technology Crimes (the Cybercrime Law) and the Penal Code. No specific regulations require net neutrality in the UAE. Both of the The Cybercrime Law specifically deals with activities that would public telecoms operators have offered plans with zero rating on certain variously be described as hacking, identity theft and fraud, crimes that social media applications. involve computers, networks and electronic information. The Penal Code Bandwidth throttling by internet service providers is common. consists of general provisions prohibiting various criminal acts, some of Network traffic that relates to Voice over Internet Protocol (VoIP) which will apply to cybercrime. services is often blocked or has its capacity reduced to give partial effect The Cybercrime Law applies across all sectors, with no exceptions. to the TDRA’s policy on VoIP services, whereby such services (where In practice, it will be of particular relevance to the telecommunications there is network breakout) are not permitted unless provided by one of and financial services sectors, as these are typically entrusted with crit- either du or Etisalat. ical data and therefore more likely to be targets of cybercrime. The National Electronic Security Authority (NESA) is the UAE federal Platform regulation authority responsible for the cybersecurity of the UAE. NESA operates 10 Is there specific legislation or regulation in place, and have under the direction of the UAE Supreme Council for National Security. there been any enforcement initiatives relating to digital Government organisations, semi-government organisations and business platforms? organisations that are identified as critical infrastructure in the UAE are required to follow NESA compliance guidelines. The primary standard to There is no specific legislation or regulation concerning digital platforms. follow for NESA compliance is the UAE Information Assurance Standards. The TDRA has also established the UAE’s Computer Emergency Next-Generation-Access (NGA) networks Response Team, which was established by statute and has published a 11 Are there specific regulatory obligations applicable to wide-ranging information security policy. NGA networks? Is there a government financial scheme to promote basic broadband or NGA broadband penetration? Big data 14 Is there specific legislation or regulation in place, and have There are no specific regulations concerning NGA networks. Du and there been any enforcement initiatives in your jurisdiction, Etisalat are both committed to providing high-speed networks across addressing the legal challenges raised by big data? the UAE, and the UAE has a very high penetration of fibre-to-home connectivity. Given the nature of the public telecommunications duopoly There is no specific federal legislation or regulation in place; however, the in the UAE, there are no direct government subsidies or financial emirate of Dubai has introduced the Dubai Law No. 26/2015 (the Dubai schemes available. Data Law), which provides for local government and private entities to contribute certain non-confidential information relating to the emirate, Data protection known as Dubai Data, to a knowledge and database from which such 12 Is there a specific data protection regime applicable to the entities can benefit. The intention is to improve integration, harmonisa- communications sector? tion and efficiency between services and encourage the development of a smart economy. No, the communications sector-specific data protection principles come from general consumer protection guidance issued by the TDRA rather Data localisation than through a data protection regime covering the communications 15 Are there any laws or regulations that require data to be sector. The UAE does not currently have a stand-alone data protection stored locally in the jurisdiction? law in place although this is felt to be on the horizon (with the TDRA playing a role in the development of the law), so privacy is protected by There are no general laws or regulations that prevent data from being a variety of different laws such as the Penal Code (Federal Law No. 3 of exported from the UAE. 1987) restrictions on publishing information that relates to private or Certain key sectors, including telecommunications, have been given family life. Also, the UAE Ministry of Human Resources and Emiratisation guidance by their regulators on data domiciliation within the UAE, but passed Resolution No. 281 of 2020, which requires employers to main- this does not come in the form of hard law or publicly available guid- tain adequate IT safety by implementing policies that ensure data ance. State-owned entities are also expected to abide by certain data protection and privacy of information with regards to remote working domiciliation rules, which are not set out in hard primary legislation. as a result of the covid-19 pandemic. The financial services sector has specific laws in this regard (particu- Certain free zones, such as the Dubai International Finance Centre, larly entities registered in the Dubai International Financial Centre or Abu Abu Dhabi Global Market and Dubai Healthcare City have enacted data Dhabi Global Market where there is a specific regime around transfers protection laws that ensure that all personal data in the free zone is of personal data that impacts those businesses’ freedom to outsource treated lawfully and securely when it is stored, processed, used, dissem- or offshore certain functions). Other financial services requirements can inated or disclosed. These include certain formalities before personal impact the communications and ICT sector; for example, digital payment data may be transferred outside their respective jurisdictions (eg, service providers have recently been required through UAE Central Bank www.lexology.com/gtdt 177 © Law Business Research 2021 United Arab Emirates Simmons & Simmons LLP

regulation to store transaction data within the UAE for at least five years. Originally under the Media Law, the Ministry of Culture and One of the latest laws that creates data domiciliation requirements in a Information was the national media regulator. Then in 2006, Cabinet specific vertical is UAE Federal Law No. 2 of 2019 concerning the use of Resolution No. 14/2006 abolished the Ministry and established a new Information and Communication Technology in Healthcare. regulator for the media industry, the National Media Council (NMC). As well as being the regulator, it also operates the government’s official Key trends and expected changes news agency. 16 Summarise the key emerging trends and hot topics in The Media Law is now considered by many to be out of date owing communications regulation in your jurisdiction. to its obvious focus on print (rather than digital) media. In 2009 the NMC circulated a draft revision to the Media Law, but the content was As there is no expectation that the TDRA will permit any additional public criticised for being overly restrictive, containing heavy penalties for telecommunications service providers to enter the UAE market in the journalists, still failing to update the law sufficiently for the digital age near future, key changes in the market dynamics and regulation are and it was eventually shelved. In theory, it could still be signed into law likely to result from increased competition between the two operators. at any time, but in practice, this is considered unlikely. The TDRA has stated previously that the intention behind introducing a In 2010 the NMC issued a Chairman of the NMC Resolution No. 20 of second licensed operator was that ‘Competition is the drive for devel- 2010 (the Chairman Resolution), which stated that all media, including opment, where it leads to higher quality services, lower prices and the audio, visual and print forms, must comply with the content of the Media adoption of latest technologies. It is a race that pumps innovation and Law. This both reiterated the primacy of the Media Law and confirmed progress into the veins of the sector.’ There is an expectation going its application beyond the printed media the law envisaged. forwards that the TDRA will be keen to ensure that as much real compe- The Media Law contains restrictions on content that can be tition as possible emerges between the operators. published, including: Being considerably newer in its establishment, du has been playing • criticising the government or rulers of the emirates or the UAE; catch-up around the infrastructure and expertise to compete on a truly • material that could cause harm to the state interests or security; level playing field with Etisalat. The two providers have often divided • criticism of or disrespect to Islam; regions up geographically rather than compete directly for the same • criticism of the rulers of any Islamic or friendly foreign state; or customers, so customers are effectively faced with a service provider • circulating or promoting subversive ideas. with a de facto monopoly. From 2015, the two providers started bitstream access, a method by which the one network could be shared by the two In March 2018, the NMC published a set of regulations around elec- operators, permitting customers more flexibility to choose a provider tronic media (the EMR), which regulates a wide range of digital media where the infrastructure previously restricted their choice. Greater ability activities including websites that sell content and individuals who seek for customers to switch between the providers has also been encour- to monetise their social media popularity by way of an annual licence aged. It is likely that the TDRA will continue to encourage this competition. arrangement. The marked perception of increased competition in the mobile There are also relevant provisions relating to media found in the market was increased in 2017 when each of du and Etisalat launched Penal Code, particularly in regard to defamation, and the Cybercrime mobile services under new brands: du acquired rights to launch a Virgin Law, when considering digital communications. mobile branded service and shortly after, Etisalat launched a prepaid Across the UAE there are various media-related free zones that service branded as ‘SWYP’. Neither the Virgin Mobile nor the SWYP have their own civil regimes, while still being subject to the same services are regulated independently of their respective MNOs. criminal restrictions as the main jurisdictions. Many national and inter- Enterprise-focused ICT services growth through operator divisions national media companies are established in these zones. or subsidiaries is a key area to watch, particularly as these divisions will compete with a large pool of non-operator affiliated entities. As regards Ownership restrictions the ICT services growth being experienced by the operators, enterprise 18 Do any foreign ownership restrictions apply to media adoption of emerging technology will continue to require regulatory guid- services? Is the ownership or control of broadcasters ance from the TDRA, as well as other concerned regulatory bodies in the otherwise restricted? Are there any regulations in relation UAE, to ensure the balance between advancement in technology and risk to the cross-ownership of media companies, including radio, management is addressed. television and newspapers? The TDRA has been active in terms of regulatory and policy output covering a range of communications areas including Earth Article 25 of the Media Law and the resolutions by the NMC provide that Station Regulations, Space Service Regulations and a new Information the owner of a media service must: Assurance Regulation. One of the most significant developments in light • be a UAE national; of the various Smart City ambitions in the UAE is the IoT Regulatory • be at least 25 years of age; Policy, which remains largely untested and has a seemingly broad ambit • be ‘fully competent’ to run the service; covering IoT services. • be of good character and behaviour; • not have been convicted of certain offences relating to morality; MEDIA • not occupy a public service role; and • not be employed by any foreign agency. Regulatory and institutional structure 17 Summarise the regulatory framework for the media sector in Many media outlets are owned, in whole or in part, by the government your jurisdiction. or powerful ruling families closely aligned with the government. There are also certain academic and experience qualification The principal source of law in relation to the media sector in the UAE is requirements on editors-in-chief and standard writers and journalists, Federal Law No. 15 of 1980 concerning Printing and Publishing (the Media though these are typically not enforced in practice. Law). The law covers a large number of regulations on the media including The recently introduced EMR set out requirements of applicants ownership, prohibitions on certain types of reporting and defamation. for the licensing regime as well as the mandatory appointment of a

‘responsible manager’ to act as a representative, although breaches of The Telecoms Regulatory Authority (TRA) Consumer Protection the EMR by an applicant or licensee do not extend to liability on the part Regulations also contain restrictions on the advertising of products or of this responsible manager. There is no requirement in the EMR for the services regulated under the Telecoms Law. These include the require- responsible manager to be a UAE national. ment to be able to evidence to the TDRA’s satisfaction any statements or claims made in the advertisement, whether direct or implied and Licensing requirements restrictions on the form of comparative advertising. 19 What are the licensing requirements for broadcasting, including the fees payable and the timescale for the Must-carry obligations necessary authorisations? 22 Are there regulations specifying a basic package of programmes that must be carried by operators’ broadcasting Under the Media Law, all newspapers and news agencies are required distribution networks? Is there a mechanism for financing the to hold a licence before they can be published. The resolutions issued costs of such obligations? by the NMC have made clear that they consider this to apply to all forms of media outlets in the UAE, not just the printed media. No, there are no official must-carry obligations in the UAE. In line The proposed news media outlet must apply to the NMC, requesting with the requirements on the media not to insult or harm the state the granting of such a licence. This can be done online via the NMC’s and for official news reporting to be undertaken through a centralised, website and must include details of the owner and the proposed media state-controlled function, certain state media content will sometimes outlet brand. Applications must be in Arabic. The NMC will review the unofficially be required to be included as part of the schedule. Also, application and, if it is in favour of the licence being granted, will support local broadcast media channels will observe mourning content (eg, the application in front of the federal government. The federal govern- soft music or recitation of the Holy Quran) in circumstances where ment must then approve the application and grant the licence. there has been a death of a royal or some other nationally observed The Media Law provides for an applicant to deposit a guarantee of tragic event. 50,000 UAE dirhams for an application for a newspaper and 25,000 UAE dirhams for other media outlets to be paid along with the application. Regulation of new media content Fines imposed will be removed from this deposit, which must then be 23 Is new media content and its delivery regulated differently topped up to maintain its original level. The NMC can also charge a range from traditional broadcast media? How? of service fees ranging from 3,000 UAE dirhams to 50,000 UAE dirhams, dependent on the type of licence sought and the activities covered. There is no distinction in the Media Law between different types of The EMR also sets out an annual licensing regime for electronic media content according to their delivery. The Chairman Resolution media activities that have variable fees depending on the category of specifically confirmed the application of the Media Content across the regulated activity: the most expensive of the categories identified in different forms of delivery. In July 2017, the UAE Cabinet issued the EMR is the electronic or online accounts and websites, including the Resolution No. 23 of 2017 concerning media content consolidated specialised ones (commercials, advertising, news, etc), which attracts content rules and extended these specifically to digital content and a new application processing fee of 15,000 UAE dirhams and the same then, more recently, the EMR established a licensing and compliance amount for a renewal. framework for digital media (including licensure relating to social media ‘influencers’). Ultimately, the fundamental principles behind the Foreign programmes and local content requirements UAE’s regulation of traditional media and the UAE’s regulation of new 20 Are there any regulations concerning the broadcasting media are not different. of foreign-produced programmes? Do the rules require a minimum amount of local content? What types of media fall Digital switchover outside this regime? 24 When is the switchover from analogue to digital broadcasting required or when did it occur? How will radio frequencies There are no specific regulations preventing the broadcasting of foreign- freed up by the switchover be reallocated? produced programmes, providing that they do not contain any content that is not permitted under the Media Law. There are also no official The switchover from analogue to digital broadcasting completed in requirements in relation to the minimum amount of local content. 2012, coordinated with other GCC states such as Qatar and Saudi Arabia. The additional radio capacity was allocated to improve mobile tele- Advertising phone services, such as next-generation 4G. 21 How is broadcast media advertising regulated? Is online advertising subject to the same regulation? Digital formats 25 Does regulation restrict how broadcasters can use their The Media Law contains several restrictions on advertising similar to spectrum? those found in many other nations, though unlike in jurisdictions that rely largely on self-regulation, advertising standards are enforced No, there is no regulation that restricts how broadcasters are permitted by the NMC. to use their spectrum allocation. Prohibited advertisements include those that are ‘inconsistent with public conduct’, a phrase capable of covering a broad range of cultural sensitivities including inappropriate dress or behaviour. It also prohibits adverts that mislead the public, could cause harm to the state or the value of society or contain subversive ideas. The EMR addresses electronic advertisements, including the use of digital social media and imposes a broad licensing requirement on those involved in such online advertising. www.lexology.com/gtdt 179 © Law Business Research 2021 United Arab Emirates Simmons & Simmons LLP

Media plurality that the Competition Department has been established and issued 26 Is there any process for assessing or regulating media views on specific cases that have been brought to it (in particular, with plurality (or a similar concept) in your jurisdiction? May the regard to merger control notifications). authorities require companies to take any steps as a result of The Competition Law provides that its provisions shall be enforced such an assessment? on all businesses in relation to their economic activities or the effect of their economic activities in the UAE (even where the conduct takes place There is no official assessment or regulation of media plurality in the outside of the UAE). It is as yet unclear how the courts will react to any UAE. Many media service providers are owned or part-owned by the jurisdictional disputes. UAE government or members of the ruling families closely linked to the The telecommunications sector is currently specifically excluded government. from the remit of the Competition Law. The Telecoms Law stipulates The NMC oversees the content prepared by the media and any that the TDRA shall have the competence to issue regulations, instruc- material that is considered to be undesirable is likely to be blocked. tions, decisions and rules regulating and ensuring competition in the Particularly in a commentary in relation to the state, foreign affairs or telecommunications sector. The TDRA includes terms in the licences Islam, journalists are likely to self-censor and a similar position will issued to operators requiring them not to participate in anticompetitive typically be taken across all media outlets. On controversial or sensi- practices. tive issues, journalists will often take their lead from the single official government news agency, the Emirates News Agency operated by the Appeal procedure NMC, and adopt identical reporting positions. 29 How can decisions of the regulators be challenged and on what bases? Key trends and expected changes 27 Provide a summary of key emerging trends and hot topics in Decisions of the Competition Department can be appealed directly to media regulation in your country. the Minister of Economy within 14 days of the applicant becoming aware of the decision. Such appeals will be considered by the Committee, Notwithstanding the introduction of the EMR, there remains a general which will submit recommendations to the Minister within 10 days. The expectation that there will at some point be an overhaul of the legal Minister must then respond to the applicant within 30 days of the appeal framework surrounding the media in the UAE, in particular, to address being filed; if nothing is heard in this time, the decision is deemed to be digital media and journalist liability. There are no clear indications that rejected. After this, the only remaining appeal is to a court of law (which this is likely to take place shortly or whether the 2009 draft media law must take place within 60 days of the decision or the deemed decision). would point to the likely outcome of such overhaul. Given the breadth Decisions issued by the NMC may under the Media Law be chal- of the EMR, we await feedback on its enforcement and the effect that lenged before the courts within 60 days of the decision that is objected the new licensing regime will have on the media industry. Another key to. In practice, it would be normal to first object to the decision unof- area to observe will be around the website censorship committee estab- ficially and discuss the matter directly with the NMC, prior to launching lished through the NMC but with representatives of each of the Ministry a formal court action. of the Interior, the TDRA and the National Electronic Security Authority. Competition law developments REGULATORY AGENCIES AND COMPETITION LAW 30 Describe the main competition law trends and key merger and antitrust decisions in the communications and media Regulatory agencies sectors in your jurisdiction over the past year. 28 Which body or bodies regulate the communications and media sectors? Is the communications regulator separate The key concepts in the Competition Law include a prohibition on anti- from the broadcasting or antitrust regulator? Are there competitive agreements, a prohibition on any abuse of a dominant mechanisms to avoid conflicting jurisdiction? Is there a position and merger control. Anticompetitive behaviour is broadly specific mechanism to ensure the consistent application of similar to the regimes in jurisdictions with more developed competi- competition and sectoral regulation? tion law systems, such as Europe and the United States. The threshold for dominance is defined by the Regulations to be 40 per cent of the The communications and media sectors are regulated by the TDRA and relevant market. Mergers or joint ventures of a certain size must be the National Media Council (NMC) respectively. Given the convergence pre-notified to the relevant government ministry at least 30 days before in the sector, there is some overlap between these and indeed other completion. UAE regulators and their respective jurisdictions. The Competition Law also provides for the issue of individual With regard to competition, despite the UAE adopting a competition exemptions for businesses in relation to particular agreements or prac- law framework in the form of the Federal Law No. 4 of 2012 concerning tice where this is considered appropriate, which can be obtained by the Regulation of Competition (the Competition Law) several years ago, application to the Ministry’s Competition Department. regulation in the UAE is still in its early stages. The Competition Law has It remains to be seen how the Competition Law will be imple- technically been in force since 2013; however, the executive regulations mented in practice. Once the Competition Department and Competition (Council of Ministers’ Resolution No. 37 of 2014) (the Regulations) were Regulation Committee begin to make decisions and recommendations, not passed until 2014 and two relevant resolutions, which provided key it is unlikely that these will be available to the public. The Competition thresholds and definitions, were not passed until 2016 (the Resolutions). Law specifically requires the Competition Department to take steps The Competition Law also provided for a Competition Regulation to maintain the confidentiality of information provided by the parties, Committee (the Committee) to be established to oversee general compe- which is considered confidential. tition law policy in the UAE. Day-to-day enforcement of the Competition Law is the responsibility of the Ministry of Economy, acting through its Competition Department. To date, there have been no officially publicised cases of Competition Law enforcement, although we are aware

In March 2020, the UAE Ministry of Human Resources & Emiratisation Raza Rizvi [email protected] issued Ministerial Resolution No. 281 of 2020 (the Resolution) to regulate remote working in private establishments, in response to the need for companies to transition to remote working, as a result of the covid-19 Level 7, The Gate Village, Building 10 pandemic. According to the Resolution, private sector employers are Dubai International Financial Centre obligated to implement effective IT policy frameworks associated with PO Box 506688 creating a safe remote working environment that will ensure privacy Dubai and data confidentiality. In addition, employers must have a codified United Arab Emirates Tel: +971 4 709 6600 privacy policy that references the risks related to remote working and Fax: +971 4 709 6601 employees are obligated to comply with their employer’s privacy policy. www.simmons-simmons.com Further, the TDRA announced that VoIP services such as Zoom and Microsoft Teams would be unblocked in order to facilitate remote working. However, VoIP services such as Facetime, Skype, Whatsapp Call etc. continue to be blocked by du and Etisalat as they are considered to be unlicensed services. According to the TDRA’s Regulatory Policy for VoIP, du and Etisalat are empowered to block a VoIP service if they believe that a VoIP service is being provided by unlicensed or unauthorised persons. It is important to note that while du and Etisalat have collaborated with the TDRA to unblock Zoom and Microsoft teams, the regulations have not been amended, therefore, this is considered temporary for the duration of the pandemic. Due to the increase in cybercrime and data privacy violations during the covid-19 pandemic, companies are being strongly advised to adopt policies aimed at ensuring the safety of their IT systems and preventing such risks. Implementing up to date antivirus software for all employee devices, enabling access to Virtual Private Networks (VPN) to ensure a higher degree of security while accessing company sensitive files, emails and other confidential information as well as introducing compulsory IT training that explains effective mechanisms to avoid the potential of falling prey to phishing emails or opening harmful links are some effective measures to guard against the threat of cybercrimes.

Alexander Brown and David Trapp Simmons & Simmons LLP

COMMUNICATIONS POLICY at 11pm). Both of these statutory instruments amend certain defi- ciencies within the Communications Act 2003. Additionally, the United Regulatory and institutional structure Kingdom has implemented Directive (EU) 2018/1972 (the European 1 Summarise the regulatory framework for the communications Electronic Communications Code) (EECC) through the Electronic sector. Do any foreign ownership restrictions apply to Communications and Wireless Telegraphy (Amendment) (European communications services? Electronic Communications Code and EU Exit) Regulations 2020, which were made on 2 December 2020 and came into force on 21 December Communications law and regulation in the United Kingdom is principally 2020. The EECC replaces the previous EU authorisation directives but founded on the Communications Act 2003 (CA 2003). This legislation the authorisation regime remains largely unchanged. implemented several EU laws aimed at harmonising, simplifying and increasing the usability of telecoms regimes across all EU member states. Authorisation/licensing regime CA 2003 also grants authority to the Office of Communications (Ofcom), 2 Describe the authorisation or licensing regime. the United Kingdom’s national regulatory authority for communications. The role of Ofcom is to set and enforce regulatory rules in all The general authorisation regime under CA 2003 makes no distinction sectors for which it is responsible and, along with the Competition and between fixed, mobile and satellite networks and services. All electronic Markets Authority (CMA), to promote fair competition across the industry communications networks (ECNs), electronic communication services by enforcing competition laws. (ECSs) and associated facilities (AFs) fall under the scope of CA 2003, As part of Ofcom’s regulatory principles, Ofcom must take the irrespective of the means of transmission. Moreover, under the general least intrusive approach to intervention and will only do so where the authorisation regime, there is no requirement for specific licensing of intervention would be evidence-based, proportionate, consistent and ECNs, ECSs and AFs. transparent. The broad definition of ECN to include any transmission system Although Ofcom is accountable to Parliament, the Department for for the conveyance of signals between a transmitter, a medium and a Culture, Media and Sport (DCMS) is the UK government department receiver, by use of electrical, magnetic or electromagnetic energy, is with overall responsibility for developing the telecoms regulatory frame- in line with the European Union’s overarching principle of technology work within the United Kingdom. Ofcom is restricted to acting within the neutrality. Equally widely defined, an ECS is a service that has as its powers conferred on it by Parliament. principal feature the conveyance of signals through an ECN, excluding The proposed Ofcom 2021/2022 Plan of Work focuses on ongoing content services (the provision of material such as information or enter- investment in faster broadband and better quality mobile networks tainment). Under CA 2003, an AF is a facility, element or service that is, or across the United Kingdom, ensuring people and businesses across the may be, used to enable the provision of an ECN or ECS or other services country can access key communications services, ensuring customers on that network or service, or supports the provision of such services. are treated fairly by their providers, supporting and developing UK ECNs or ECSs can provide networks or services to the public broadcasting, and preparing to regulate on protecting people from without the need for prior authorisation from Ofcom where they have harmful content online. complied with the General Conditions of Entitlement (the General Although there are currently no restrictions on foreign owner- Conditions). A revised version of the General Conditions came into force ship of telecoms services within the United Kingdom, the current UK on 1 October 2018. In more limited circumstances, the ECNs or ECSs government pledged to introduce new rules on foreign control for may also need to comply with specific conditions. The General Conditions the telecoms industry as part of its general election manifesto in May apply to ECNs irrespective of whether a provider owns or rents some or 2017. The National Security and Investment Act 2021, which is due to all of the network in question. The ECS will generally be the entity with a come into effect in late 2021, will reform the UK government’s ability direct contractual relationship with the end user, or the reseller or other to scrutinise foreign investment in the communications and data infra- intermediary in the case of a wholesale provider. Ofcom provides further structure sectors. guidelines on which organisations will fall within these categories. As a consequence of Brexit, certain parts of the UK electronic The implementation of the EECC means that ECSs now expressly communications regulatory framework have required amendment. For include internet access services, interpersonal communications services example, the requirement to notify matters to the European Commission (differentiated into number-based or number independent) and services ceased to be applicable when the United Kingdom ceased to be a consisting wholly or mainly in the conveyance of signals. Number- member of the European Union. The Electronic Communications and independent interpersonal communications must not be subject to Wireless Telegraphy (Amendment etc) (EU Exit) Regulations 2019 and the General Conditions as they ‘do not benefit from the use of public the Broadcasting (Amendment) (EU Exit) Regulations 2019 were made numbering resources and do not participate in a publicly assured inter- on 12 February 2019 and came into force on exit day (31 January 2020 operable ecosystem’.

Entities using radio spectrum, such as mobile network operators authorisation regime are not subject to licensing requirements and, or satellite service providers, will require the grant of a licence from therefore, there is no set licence duration applicable to the provision of Ofcom under the Wireless Telegraphy Act 2006 (WTA 2006). Each grant ECNs and ECSs. will detail the specific frequency, use, fees and duration of the licence. Some services, such as receive-only earth stations, may not fall within Modification of licences the scope of the WTA 2006 licence condition, but still require Ofcom to Although ECNs and ECSs will not be subject to any direct licence modi- authorise any such use under a scheme of recognised spectrum access. fication, under CA 2003 Ofcom may impose changes to the General Operators of set-top boxes that convert signals for viewing will also Conditions or specific conditions from time to time. CA 2003 requires need an operating licence under the Broadcasting Act 1996. The use of that Ofcom publish a notice, outlining the proposed changes and justi- certain frequencies in the radio spectrum for short-range devices, such fying its reasons for these, providing a period for proposals from those as alarms and radio frequency identification equipment, is exempt from providers affected of not less than one month. Variations to SMP condi- the need to obtain licences. tions are subject to additional requirements, including that Ofcom Ofcom’s approach to spectrum award is to allow the market as must consider all representations made to it about the proposal and much flexibility in how the spectrum is used without assigning it to a have regard to every international obligation of the United Kingdom as particular technology or application. While spectrum licences are most notified to it by the Secretary of State. Licences under WTA 2006 may commonly awarded via auction, Ofcom can design these in such a way be varied by Ofcom providing written notice to the licence holder or as to ensure that there is the greatest possible competition within the publishing a general notice to all holders of a class of licence. market. The United Kingdom’s latest auction by Ofcom was for spectrum to service 5G in April 2021. Fees There are currently 17 General Conditions in force, the majority As a result of the passing of the Digital Economy Act 2017 (DEA of which must be complied with by all ECNs and ECSs. The remainder 2017), Ofcom is entirely funded through industry fees and charges. apply in more limited circumstances, such as for public pay telephones. Communications service providers (with a revenue of more than £5 Under CA 2003, Ofcom has the power to amend or revoke any of the million) must pay a fee based on 0.1064 per cent of relevant turnover for General Conditions as appropriate. the year ending 31 December 2019. Operators that have Code powers In the smaller number of cases where an ECN or ECS is subject to under the Electronic Communications Code (conferring benefits such as specific conditions, Ofcom will notify that provider of the fact that those not having to apply for a street works licence to install certain equip- conditions are to be imposed. A summary of the main types of specific ment) must also pay an annual fee to Ofcom. The charge for 2021 to condition is given below. 2022 is £1,000. Operators must also pay a one-off charge of £10,000 for Ofcom’s cost of dealing with the application for Code powers. Universal service conditions The basis for this condition is to ensure that everyone within the United Radiocommunications Kingdom is afforded basic access to telephony. In the United Kingdom, Ofcom has the power under WTA 2006 to set fees concerning wireless the designated service providers are Kcom in the Hull area and BT for telegraphy licences, other than for those awarded by auction. Under the rest of the United Kingdom. WTA 2006, Ofcom can prescribe administered incentive pricing, allowing for fees to be set at above administrative costs to encourage efficient use Social tariff conditions of the spectrum. Ofcom must set out the fees through published regula- This condition requires social tariffs to be used concerning qualifying tions. Ofcom can either update existing regulations or publish new ones. services. A social tariff is defined as a special tariff available to indi- Most recently, the Wireless Telegraphy (Licence Charges) Regulations viduals meeting criteria relating to low income or special social needs. 2020 came into force on 21 October 2020. Ofcom held consultations on proposed Annual Licence Fees for mobile network operators of 900MHz Access-related conditions and 1800MHz frequency bands, which closed on 3 August 2018 and To ensure end-to-end connectivity for end users through the intercon- for UK Broadband’s 3.4GHz and 3.6GHz spectrum, which closed on 11 nection of different networks, Ofcom may impose specific conditions February 2019. See Ofcom’s website for more details. relating to access on ECNs. Television and radio Privileged supplier conditions Ofcom also charges licence fees for the radio and television sectors. The Where a supplier has special or exclusive rights concerning the provi- percentage of annual turnover payable varies according to the turnover sion of any non-communications service (services other than ECNs or of the operator. Further details can be found on Ofcom’s website. ECSs) then Ofcom must ensure that the privileged supplier complies with specific accounting requirements under CA 2003. Public Wi-Fi The Investigatory Powers Act 2016 (IPA 2016) applies to public Wi-Fi Significant market power conditions providers, which may result in them being required to retain and An operator will have significant market power (SMP) if it is in such disclose communications data to authorities. a position to act independently of its competitors and consumers or end users. Flexibility in spectrum use 3 Do spectrum licences generally specify the permitted use Licence duration or is permitted use (fully or partly) unrestricted? Is licensed Licences issued by Ofcom under WTA 2006 have varying durations spectrum tradable or assignable? depending on the type of licence granted. The mobile 3G licences granted in 2000 were subject to a fixed term of 20 years. Following In its 2014 Spectrum Management Strategy statement, Ofcom high- the WTA (Directions to Ofcom) Order 2010, and subsequent consulta- lighted the importance of providing as much flexibility as possible in tion by Ofcom, mobile licences will continue for an indefinite period but spectrum licence conditions to liberalise the rights of the licensee, be subject to annual renewal fees. ECNs and ECSs under the general allowing that user to re-purpose the use of its spectrum without www.lexology.com/gtdt 183 © Law Business Research 2021 United Kingdom Simmons & Simmons LLP

needing to seek a licence variation. Subject to certain boundaries (such As the UK NRA, Ofcom is required to carry out SMP assessments and as interference risks), licensees are afforded the ability to determine review and report on existing SMP determinations every five years. how that licence should be used without referral to Ofcom. Defining Since 31 December 2020, Ofcom’s decision-making concerning SMP interference parameters remains an important tool for allowing licence markets and related conditions is no longer subject to EU oversight. The owners to understand how they can use their own network and the current position on SMP markets in the United Kingdom is as follows. possible interference levels they may experience. In its 2014 statement, Ofcom indicated that the process of liberalising certain classes Business connectivity markets of mobile and business radio services was already complete. In Ofcom’s On 28 June 2019, Ofcom published the final statement and concluded consultation on its spectrum management strategy for the next 10 years that it will continue to regulate what Openreach can charge providers to in December 2020, the importance of maintaining flexibility in spectrum use their leased-line networks and imposed requirements on Openreach use to support innovation was again emphasised. for repairs and installations. Openreach will also be required to give competitors in certain areas physical access to its fibre-optic cables. Spectrum trading Spectrum trading is allowed in the United Kingdom, with the prior Physical infrastructure market consent of Ofcom only required for the trading of mobile licences. The On 28 June 2019, Ofcom decided on regulation that will allow all tele- laws governing such trading are: coms providers access to Openreach’s network of underground ducts • WTA 2006; and telegraph poles. • the Wireless Telegraphy (Spectrum Trading) Regulations 2012 (the Trading Regulations); and Wholesale fixed telecoms market (Hull) • the Wireless Telegraphy (Mobile Spectrum Trading) Regulations The Ofcom consultation published in July 2020 setting out regulation 2011 (the Mobile Trading Regulations). plans for five years from April 2021, including proposals to remove regulation from the wholesale fixed analogue exchange line, integrated The parties to the transfer must notify Ofcom with certain informa- services digital network 2 and 30, wholesale call origination, and whole- tion about the trade before Ofcom can then publish a notice setting sale broadband access markets. Regulation to remedy Kcom’s SMP out information on the trade and basic details about the licence. For will continue. mobile transfers, Ofcom must consent to the transfer, possibly giving further directions to the parties. Certain types of partial transfers are Wholesale fixed telecoms market also permissible under the Mobile Trading Regulations, although these The Ofcom statement published on 18 March 2021 continues to allow may be restricted to limit the number of available licences in the band. all network operators access to Openreach’s network of underground On 15 May 2020, Ofcom published a statement setting out its decisions ducts and telegraph poles. Depending on local competition, Openreach for the award of spectrum in the 700MHz and 3.6-3.8 GHz bands and may continue to be required to provide wholesale access to its network the regulations to implement those decisions, the Wireless Telegraphy or be subject to a cost-based charge control. Ofcom did not impose price (Licence Award) Regulations 2020. caps on full-fibre connections provided by Openreach.

Ex-ante regulatory obligations Wholesale voice market 4 Which communications markets and segments are subject to The Ofcom statement published on 30 March 2021 states the decision to ex-ante regulation? What remedies may be imposed? deregulate wholesale call origination and remove mobile donor conveyance charges price cap, although these continue to be required to be set Ofcom has powers to impose ex-ante regulations on markets where at cost. Regulation and charge controls on mobile call termination and that market is found not to display effective competition. Under these wholesale call termination have been retained. New internet protocol ex-ante regulatory powers, Ofcom may impose certain SMP conditions interconnection regulations were introduced. on a communications provider where that provider is deemed to have On 6 February 2019, Ofcom imposed reporting directions across all SMP such that it can dominate a market, ie, it has a position of economic markets in which Kcom is regulated (the wholesale local access market, strength affording it the power to behave to an appreciable extent inde- the business connectivity markets, the narrowband markets and the pendently of competitors, consumers and customers. The EECC requires wholesale broadband access market). that Ofcom carries out market reviews to establish the level of competition before any SMP regulation can be imposed. If a market is found effec- Structural or functional separation tively competitive (ie, no operator has SMP), taking into account changing 5 Is there a legal basis for requiring structural or functional market conditions, no regulation can be imposed. Ex-ante regulation must separation between an operator’s network and service be removed when the market has become effectively competitive. In 2002, activities? Has structural or functional separation been the European Commission published guidance on how national regula- introduced or is it being contemplated? tory authorities (NRAs) should approach imposing SMP conditions on a provider. These were updated in 2018 to reflect the changes to EU compe- In 2005, BT gave binding undertakings to Ofcom under the Enterprise tition law generally as well as changes to the telecoms sector. Act 2002 (EA 2002) under which it agreed to implement a functional Under the EU framework, the European Commission identifies separation of its network division – Openreach – from the rest of the BT the set of markets in which ex-ante regulation may be warranted. In its group. Organisational boundaries and information barriers comprised latest Recommendation on Relevant Markets, adopted on 21 December the basis of this functional separation, with Openreach obliged to deliver 2020, only the following markets were identified: products providing access to the first-mile infrastructure to all commu- • wholesale local access provided at a fixed location (to ensure nications providers on a non-discriminatory basis. access-based competition in the broadband mass market); The status and operation of Openreach was reviewed in 2016 with • wholesale dedicated capacity (which is mainly relevant for busi- Ofcom considering proposals, including retaining functional separa- ness use requiring a higher quality of connectivity). tion with increased independence of Openreach’s governance, along with stricter access and quality requirements for Openreach (following

184 Telecoms & Media 2021 © Law Business Research 2021 Simmons & Simmons LLP United Kingdom several criticisms levelled at BT for abuse of their Openreach monopoly, Number allocation and portability underinvesting in the UK’s broadband infrastructure and charging 7 Describe the number allocation scheme and number high prices with correlating poor customer service). Following Ofcom’s portability regime in your jurisdiction. announcement of its intention to file a formal notification to the European Commission to commence the separation process, in March 2017, BT Under retained EU law, end users have a right to keep their original Group agreed to implement a legal separation of Openreach from the telephone number when switching communications provider. Under its BT group. On 31 October 2018, Ofcom published a notice confirming powers under CA 2003, Ofcom has laid out the conditions for number that BT was released from its EA 2002 undertakings given in respect portability under General Condition B3. Under this condition, an end of Openreach. Ofcom continues to monitor Openreach’s strategic inde- user’s original service provider must provide them with a porting pendence to ensure that the separation is operating in practice. If Ofcom authorisation code in the shortest possible time when requested. The is not satisfied that it does, a further option would be a structural sepa- end user may then pass this code to a new provider and the porting ration that would see Openreach being completely separated from must then take place within one business day. the BT Group. Ofcom has, however, outlined its preferred view that number portability should, in fact, be ‘gaining-provider led’. Under this approach, Universal service obligations and financing the transfer of a number would be controlled by the new provider, 6 Outline any universal service obligations. How is provision of with the consumer only needing to contact this party. Ofcom believes these services financed? that this would allow for easier and quicker transferring of numbers. Ofcom started a consultation on the mobile switching process (including The law on universal service provision is partly derived from Directive number portability) in 2016 and in December 2017 published the deci- 2009/136/EC (Universal Service Directive), which has now been incor- sion to reform the process for switching mobile provider. In January porated into the EECC and was implemented in the United Kingdom 2019, further guidance was published relating to requests for switching on 21 December 2020. Under the Electronic Communications (Universal multi-Sim contracts and accounts. In July 2019, Ofcom introduced Service) Order 2003, BT and Kcom must comply with conditions aimed new rules under which mobile customers can leave their network by at ensuring the provision of universal service. The obligations include: sending a short, free text message without needing to call their existing • special tariff schemes for low-income customers; provider. Ofcom has also banned mobile providers from charging for • reasonable geographic access to public phone boxes; a notice period that runs after the switch date. Also, if a customer’s • a connection to the fixed network (including functional internet request to port their number is being frustrated, the old provider will access); and be put on notice and will have up to five days to resolve any issues. If it • the provision of a text relay service for customers with hearing fails to do so, the customer now has the right to trigger the process that impairment. will enable their new provider to override this obstacle. The customer will need to submit a complaint on Ofcom’s website, which will be DEA 2017 established a power for the Secretary of State to include a assessed by an independent industry panel. See the Ofcom website for broadband universal service obligation (USO) for a legally binding more details. minimum level of broadband service with a connection of at least Ofcom’s consultation, launched on 3 February 2021, confirmed 10Mbps download speed and upload speeds of at least 1Mpbs by giving new switching rules for providers of landline, broadband and mobile each household and business a new legal right to demand an afford- services, which will come into force in December 2022. The consulta- able broadband connection up to a reasonable cost threshold. This tion sets out proposals on the process that residential landline and was implemented through the Electronic Communications (Universal broadband customers will use to switch from that date and proposes Service) (Broadband) Regulations 2018, which came into force on limited changes to the information mobile providers must give residen- 4 December 2018. Ofcom designated BT and Kcom (in Hull) as the tial customers when they want to switch. universal service providers to which broadband conditions are to apply. With the Broadband Delivery UK programme having brought fixed-line Customer terms and conditions superfast broadband to more than 96 per cent of the United Kingdom, 8 Are customer terms and conditions in the communications the 2018 USO is geared towards achieving the final 4 per cent. sector subject to specific rules? From 20 March 2020, customers have the right to request an affordable broadband connection from BT or Kcom. The relevant provider Part C of the General Conditions imposes consumer protection will have 30 days from the request to confirm whether the customer is conditions. Condition C1 imposes minimum information provision eligible. The customers will be eligible if their property does not already requirements in consumer contracts, including a maximum initial dura- have access to affordable broadband and is not due to be connected tion of two years and conditions for termination. One of the matters to be by a publicly funded scheme within 12 months. The costs of providing disclosed includes details of prices and tariffs, which is further extrapo- connection will be paid for up to £3,400. If the required work costs more, lated under Condition C2. Under this Condition, all operators must make the customers will have an option to either pay the additional costs or available clear and up-to-date information on their prices and tariffs, as seek an alternative solution outside the universal service. well as on their standard terms and conditions of access to, and use of, The Electronic Communications (Universal Service) (Costs) publicly available telephone services. Regulations 2020, which came into force on 15 June 2020, set out how Condition C4 and CA 2003 further require that dispute resolution universal service providers BT and Kcom will be compensated, including mechanisms provided by the communications provider or otherwise are Ofcom rules for assessing the extent of the financial burden associated accessible to their domestic and small business customers (ie, busi- with the provision of universal services. nesses with 10 or fewer employees). The two dispute resolutions schemes approved by Ofcom for this purpose are the Ombudsman Services and the Communication and Internet Services Adjudication Scheme. In 2019, Ofcom introduced a series of new rules with a view to increasing fairness for customers. The new protections require providers to: www.lexology.com/gtdt 185 © Law Business Research 2021 United Kingdom Simmons & Simmons LLP

• provide clear and honest information to prospective broadband Platform regulation customers concerning a minimum guaranteed speed before they 10 Is there specific legislation or regulation in place, and have commit to a contract; there been any enforcement initiatives relating to digital • compensate broadband and landline customers when they experi- platforms? ence difficulties and delays in receiving the service; • inform customers before their contract comes to end and explain While there is, at present, no legislation or regulation specifically their best available deal (including those available to new governing digital platforms in the United Kingdom, general authorisation customers); and provisions under CA 2003 will apply. Ofcom’s remit covers the following • allow mobile phone customers to switch provider with a platforms: text message. • digital terrestrial television; • digital audio broadcasting; As part of the Fairness Framework, Ofcom has also launched a review to • radio; and ensure clearer, fairer deals for customers with bundled mobile airtime • video-on-demand (VOD) services. and handset contracts and started reviewing broadband pricing practices, examining why some customers pay more than others. Any other digital platforms are subsequently only subject to general In January 2020, Ofcom published a framework outlining how it will competition law and sector-specific regulations. determine whether customers are treated fairly by telecom and pay-TV The complex nature of digital platforms and the difficulties in under- companies. Ofcom will consider the following aspects: standing their competitive effects has led the UK government and the • how providers treat their customers throughout the CMA to take a flexible and case-by-case approach to policing digital customer journey; platforms. • who is being harmed; The United Kingdom, along with several other EU member states, • the extent of the harm; advised in an open letter dated 4 April 2016, that while the European • the importance of the service; and Commission is right to emphasise the importance of the issue of digital • whether the service depends on risky new investment. platforms and collect evidence to inform and define the role of such platforms within the Digital Single Market Strategy, care should be taken In July 2020, Ofcom published a guide for phone, broadband and pay-TV to avoid excessive regulation that could end up harming rather than providers on treating vulnerable consumers fairly. Ofcom will monitor furthering the initiative. companies’ performance, including against its Fairness for Customers On 1 March 2018, the European Commission issued a recommenda- commitments. tion regarding measures to tackle illegal content online. EU Regulation (EU) No. 2019/1150 on fairness and transparency in online platform Net neutrality trading entered into force in July 2019, and the platforms will need to 9 Are there limits on an internet service provider’s freedom to comply with its provisions by 12 July 2020. These legislative instruments control or prioritise the type or source of data that it delivers? aim to address unfair contractual clauses in platform-to-business rela- Are there any other specific regulations or guidelines on net tionships and make progress with procedural aspects and principles neutrality? on the removal of illegal content. The regulation applies to providers of online intermediation services and online search engines. The principle of net neutrality was enshrined into law by Regulation As part of the report published on 13 March 2019 by the Digital (EU) No. 2015/2120 (the 2015 EU Roaming and Open Internet Access Competition Expert Panel, led by Jason Furman, ‘Unlocking digital compe- Regulation) (the 2015 Regulation) (implemented in the United Kingdom tition’ (the Furman Report), the panel recommended that a new code of by the Open Internet Access (EU Regulation) Regulations 2016 – neces- conduct should be established for companies designated as having stra- sary for designating Ofcom as the UK national regulatory authority), tegic market status on acceptable norms of competitive conduct on how which prohibits discrimination, interference or paid prioritisation they should act concerning smaller firms and consumers. affecting end-user access. It includes transparency rules requiring The CMA published a report of its online platforms study in July 2020, internet access services to publish information on any traffic manage- recommending the implementation of a new pro-competition regulatory ment measure that could affect end users (in terms of quality, privacy regime. A Digital Markets Unit (DMU) should be empowered to enforce a and data protection), as well as information on fair use policies, actual code of conduct to govern online platforms with market power and make speeds, data caps and download limits (among others). It further pro-competitive interventions to tackle sources of market power. The requires Ofcom to monitor and enforce the rules. Ofcom published its government responded in November 2020, accepting the CMA’s findings latest report on compliance in July 2020 to cover the period from May and commissioning the Digital Markets Taskforce to provide advice on 2019 to April 2020, finding that the quality of fixed IAS has improved, the code of conduct. The new DMU was established within the CMA on 7 Ofcom’s recent work has ensured ISPs remain compliant with the April 2021 to focus on operationalising and preparing for the new regula- 2015 Regulation, and the UK’s networks coped during the peak of the tory regime to be legislated by the government later in 2021. covid-19 pandemic thereby ensuring that consumers stayed connected with access to mobile and fixed broadband networks. See the Ofcom Next-Generation-Access (NGA) networks website for more details. 11 Are there specific regulatory obligations applicable to NGA The 2015 Regulation now applies as retained EU law, as amended networks? Is there a government financial scheme to promote by the Open Internet Access (Amendment etc) (EU Exit) Regulations 2018 basic broadband or NGA broadband penetration? to address issues arising from the United Kingdom exiting the European Union and provide for amendments such as removing references to There is currently no legislation or regulation covering NGA networks in ‘national regulatory authority’, ‘common rules’ and requirements for the United Kingdom. Indeed, Ofcom has stated its role is not to provide Ofcom to follow requirements set by the European Commission and the operators with incentives to make particular investments, but rather to Body of European Regulators for Electronic Communications (BEREC). attempt to ensure that the incentives for efficient investment are not distorted as a result of disproportionate regulation.

Pursuant to the undertakings entered into between BT and Ofcom Data protection in 2002, BT must allow its competitors access to its virtual unbundled 12 Is there a specific data protection regime applicable to the local access points to foster competition over the supply of super- communications sector? fast broadband services to consumers. BT is also required to allow other providers the option of investing in NGA by giving access to its Regulation (EU) No. 2016/679 (General Data Protection Regulation) ducts and poles and other physical infrastructures. On 28 June 2019, (GDPR) governs data protection in the United Kingdom with effect from Ofcom decided to open up BT’s infrastructure to improve access to 25 May 2018. The GDPR generally imposes more stringent compliance Openreach’s underground ducts and poles for competing providers of obligations on both data controllers and data processors, alongside fibre broadband. more onerous information requirements, to ensure that the personal There is a general EU prohibition restricting the UK government’s data of data subjects is afforded an adequate level of protection. The ability to invest directly in broadband infrastructure in the United scope of the regulation is also expanded and may, therefore, affect tele- Kingdom. However, the UK government is, through Building Digital UK, coms providers located outside the European Union. supporting investment in: The GDPR is supplemented by the Data Protection Act 2018 (DPA • the provision of superfast broadband coverage to 95 per cent of the 2018), which received Royal Assent on 23 May 2018 and came into force United Kingdom (achieved by December 2017); on 25 May 2018. The purpose of DPA 2018 includes: • the provision of access to basic broadband (2Mbps) for all; and • incorporating elements of the GDPR into UK law, meaning that • the stimulation of private investment in full-fibre connec- the UK and EU data protection regimes are aligned after Brexit tions by 2021. (which may increase the likelihood of an adequacy decision from the European Commission); In March 2021, the UK government announced the launch of £5 billion • exercising derogations to the GDPR in certain areas; Project Gigabit, which in its first phase will provide more than one • clarifying the role of the Information Commissioner’s Office million hard-to-reach homes and businesses with next-generation (ICO); and gigabit broadband. In November 2017, the UK government announced • consolidating data protection enforcement, by increasing fines and that local bodies could apply for funding for investment in fibre introducing two new criminal offences. networks, the Local Full Fibre Network (LFFN) challenge fund. In August 2018, the third allocation of funding, worth £95 million, was opened up The Withdrawal Act ensured that the effect of the Data Protection, to bidding. The UK government had confirmed nine winning bidders Privacy and Electronic Communications (Amendments etc) (EU Exit) that cumulatively had secured £53 million of the total available. The Regulations 2019 (SI 2019/419) (DP Brexit Regulations 2019) would LFFN programme ended in March 2021 and comprised £287 million of not have effect until the end of the transition period so that UK law investment. did not diverge from EU law. After the transition period, the DP Brexit Ofcom plays a key role in facilitating both investment and competi- Regulations 2019 introduced the new UK GDPR and the GPDR will now tion in superfast broadband. In February 2018, Ofcom cut the wholesale be known as the EU GDPR in the United Kingdom. These Regulations price that Openreach can charge telecoms companies for its superfast ensure that the UK data protection framework can continue at the end broadband service to allow cheaper prices to be passed on to consumers of the transition period and incorporates certain features of the EU and promote further competition and thus investment and develop- GDPR for domestic purposes, such as a wide territorial scope. Several ment. The rules also include stricter requirements on Openreach to changes include the following: repair faults and install new broadband lines more quickly. • the Secretary of State has the power to designate a third country or In January 2020, Ofcom published a four-point plan to support international organisation as providing an adequate level of protec- investment in fibre networks, which included: tion for personal data under UK GDPR without needing to consult • setting Openreach’s wholesale prices in a manner that encourages the European Data Protection Board (the ICO will still need to be competition from new networks and investment by Openreach; consulted); • ensuring that customers can access affordable broadband and • the Secretary of State may approve standard contractual clauses preventing Openreach from restraining competition; (SCCs) for transfers of personal data (the ICO has announced that • supporting Openreach’s investment in rural areas; and draft UK SCCs will be published for public consultation in the • closing the copper network to cut Openreach’s costs of running two summer of 2021); parallel networks. • the recognition of existing adequacy decisions (SCCs and Binding Corporate Rules) as adequate protection for international transfers In March 2021, Ofcom published its Wholesale Fixed Telecoms Market under UK GDPR; and Review Statement, setting out Ofcom’s regulatory decisions for the • the ICO is no longer a party to the EU GDPR consistency mecha- promotion of competition and investment in the fixed telecoms market, nisms or the supervisory authority for the purposes of the EU GDPR. for the period April 2021 to March 2026. BEREC released a final report, dated 13 June 2019, concerning The Trade and Co-operation Agreement is largely silent on data protec- access to physical infrastructure in the context of market analyses, tion but does include a temporary bridging mechanism for personal citing that physical infrastructure (eg, ducts and poles) represent a data transfers from the European Union to the United Kingdom, during significant proportion of the investment in NGA networks. The report which time the United Kingdom will not be treated as a third country emphasised the benefits of measures aimed at facilitating greater use for the purposes of personal data transfers from the European Union. of existing physical infrastructure that can reduce the civil engineering This is for six months until an EU adequacy decision is implemented works required to deploy new networks, significantly lowering costs. In that allows ongoing free flow of data between the European Union time, this may see regulatory change around access to physical infra- and the United Kingdom. For outbound international transfers of structure supporting NGA networks. data, the UK GDPR will apply. The UK government has implemented DP Brexit Regulations, which recognises all EAA countries, Gibraltar and EU institutions as ‘adequate’ and permits data transfers to these countries. www.lexology.com/gtdt 187 © Law Business Research 2021 United Kingdom Simmons & Simmons LLP

The likelihood of this adequacy decision being made depends on several safeguards against the possible abuse of power and was there- the European Court of Justice ruling of 16 July 2020 in Data Protection fore not in breach of the Human Rights Act 1998. Commissioner v Facebook Ireland and Maximillian Schrems (Case Additionally, Ofcom offers guidance as to how communications C-311/18) (Schrems II). This held that SCCs for the transfer of personal providers should implement technical and organisational security data from EU controllers to processors in third countries are still valid, measures to manage the security risks of public ECNs and ECSs. This but subject to additional safeguards where the non-EAA data importer guidance was updated in December 2017. cannot guarantee a level of data protection essentially equivalent to that of the European Economic Area. This decision separately held that Cybersecurity the adequacy of the decision of protection by the EU–US Privacy Shield 13 Is there specific legislation or regulation in place concerning was invalid. This ruling has led to many businesses with international cybersecurity or network security in your jurisdiction? trade links conducting an urgent risk review of their data flows to check whether alternative measures must be implemented. There is no single piece of legislation or regulation in place concerning The GDPR is complemented by the Privacy and Electronic cybersecurity or network security in the United Kingdom. It is instead Communications (EC Directive) Regulations 2003 (as amended) (the covered by several pieces of legislation, such as CA 2003, Privacy and PEC Regulations). The PEC Regulations (which implement Directive Electronic Communications Regulations, GDPR and also the Network 2002/58/EC on privacy and electronic communications (ePD) provide and Information Systems Regulations 2018 (the NIS Regulations). The for measures such as: NIS Regulations impose cybersecurity and incident reporting obliga- • the safeguarding the security of a service by public ECSs; tions on two classes of operator in the United Kingdom: relevant digital • notice requirements, should there be any breaches of security; service providers; and operators of essential services (provided they • prohibitions on unsolicited or direct marketing communications; operate in certain sectors and meet threshold requirements). Now that • restrictions on the processing of user identity and location; and the transition period has completed, digital service providers will, if they • how long personal data may be held or held without modification. wish to offer services within the European Union, need to register with the NIS regulator for the EU member state where they have their main In 2017, the European Commission published a draft of the ePrivacy establishment located there. Regulation (ePR) to bring the provisions of the existing ePD in line CA 2003 requires public ECN and ECS providers to take appropriate with the GDPR and to take account of technology changes. Failure technical and organisational measure to manage the ECNs and ECSs, to comply with either of these Regulations could lead to fines being the focus of which is to minimise the impact of security breaches on imposed on a business of the higher of 4 per cent of worldwide annual end users and the interconnections of public electronic communications turnover or €20 million. The ePD is still being revised and a new draft networks. CA 2003 also imposes several notification requirements on was published in February 2020. In its current drafted state, there is these providers. The PEC Regulations similarly impose obligations on a two-year transition period before draft ePR becomes directly appli- public ECSs to ensure that personal data is handled appropriately and cable in EU member states and therefore it did not form part of UK subject to appropriate security policies. law automatically under the European Union (Withdrawal) Act 2018 Under the GDPR, data controllers and data processors have to (the Withdrawal Act). In this case, organisations will need to comply ensure that appropriate technical and security measures are put in with dual regimes under UK and EU law to the extent that the ePR place when handling a data subject’s personal data. differs from the UK’s PEC Regulations. The UK government will need The new European Electronic Communications Code introduced to consider introducing equivalent provisions in domestic law for the certain changes that aimed at strengthening the current network secu- United Kingdom to stay fully in line with the EU laws on e-privacy. It rity provisions. The government decided it was not appropriate to consult may well be that UK companies will be caught by the extended territo- on the implementation of these provisions due to the then-ongoing rial scope of the EU regime. Telecom Supply Chain Review, which included a review of the legisla- IPA 2016 deals with data retention, interception and acquisition. tive framework for the security and resilience of telecoms network and Some of the key changes introduced by this legislation included: services. As a result of the Review, the government decided to develop • an extension of government powers to require telecoms operators a new security framework for telecoms. to retain data about users including their web-browsing history; • the potential for communications providers to be prevented from Big data implementing end-to-end encryption of user data; and 14 Is there specific legislation or regulation in place, and have • an expansion of the types of operators that will be affected by such there been any enforcement initiatives in your jurisdiction, investigatory powers to include by public and private telecoms addressing the legal challenges raised by big data? operators. While general data protection legislation applies to big data, no The UK government has, as of 22 July 2020, brought into force all the particular UK legislation or regulation covers big data specifically. remaining provisions of CA 2003. IPA 2016 was previously challenged in However, several inquiries have been conducted by UK bodies into the courts in November 2018 when a human rights group won the right benefits and challenges arising from the exponential growth in the use to a judicial review of Part 4 of IPA 2016, which gives government agen- of big data (and its link to the internet of things). In November 2018, cies powers to collect electronic communications and records without the UK government created the Centre for Data Ethics and Innovation, reason for suspicion. The government had until 1 November 2018 to which aims to assist the UK government with identifying and addressing amend the legislation. The Data Retention and Acquisition Regulations areas where clearer guidelines or regulation concerning data and data- 2018, which came into force on 31 October 2018, increased the related technologies are needed. In 2019, the ICO appointed a new role threshold for accessing communications data to serious crime only and of data ethics adviser whose key task is to contribute to ongoing data imposed a requirement on authorities to consult with an independent ethics discussions. Investigatory Powers Commissioner before requesting data. However, Further, the fallout from Cambridge Analytica harvesting data from in July 2019, the High Court dismissed a human rights group’s latest Facebook on a large scale has turned the spotlight on big data collection challenge against surveillance laws and held that IPA 2016 includes and processing activities and, in November 2018, the ICO produced a

188 Telecoms & Media 2021 © Law Business Research 2021 Simmons & Simmons LLP United Kingdom report into this subject titled ‘Investigation into the use of data analytics of telecoms networks and services without prior formal authorisation, in political campaigns’. to agree terms with suppliers to provide networks and services that In its Furman Report, the Digital Competition Expert Panel recog- are transparent, procedure rules for allocation of scarce resources, nised the importance of data as a competitive tool in the UK’s digital disputes and independent regulation. market. Specifically, it saw how digital markets tended towards The EU regulatory framework on low wholesale voice termination concentration, with limited degrees of in-market competition, leading rates will no longer apply to UK service provides for calls between the to significant barriers to entry because of the accumulation of data by European Union and the United Kingdom and this may lead to increases incumbent firms. Some recommendations, therefore, sought to enable in the termination rates for calls and increased retail tariffs for such calls. greater personal data mobility and systems with open standards. The The trade agreement does not extend provisions of the EU roaming Panel also encourages policies of data openness in granting access regulations and simply contains a provision requiring the parties to to non-personal or anonymised data to new market participants. The endeavour to cooperate on promoting transparent and reasonable rates government accepted the recommendations of the Furman Report and for international roaming. EU mobile operators will no longer be limited announced the establishment of a new Digital Markets Unit on 7 April in what they can charge UK operators for providing roaming services. 2021. This Digital Markets Unit will be a government statutory body that This will mean that surcharge-free roaming may no longer be a standard. will oversee the new regime for digital markets and monitor compli- In its no-deal Brexit technical notice on mobile roaming, the governance with a new enforceable code of conduct to govern the behaviour ment said that roaming charges will become a commercial matter, of platforms funded by digital advertising that are designated as having which suggests that it does not intend to legislate to require mobile strategic market status. companies to offer surcharge-free roaming. The Mobile Roaming (EU Exit) Regulations 2019, made on 14 March 2019, removed the require- Data localisation ment on UK mobile operators to guarantee surcharge-free roaming for 15 Are there any laws or regulations that require data to be customers in the European Union. It also implemented an obligation on stored locally in the jurisdiction? operators to notify customers travelling abroad when they use 80 per cent and 100 per cent of their data allowance and to advise customers There are no data localisation requirements in the United Kingdom. on how to avoid inadvertent roaming in border regions. There are, however, rules in the GDPR that require personal data trans- Brexit could also have an impact on development programmes for ferred outside the European Economic Area to be subject to adequate 5G, the internet of things and the deployment of broadband networks protection. that benefit from EU funding. The United Kingdom will likely need to enter into a mutual recognition agreement with the European Union Key trends and expected changes to enable the accreditation process for electronic products to remove 16 Summarise the key emerging trends and hot topics in restrictions for market entry of telecoms equipment. The United communications regulation in your jurisdiction. Kingdom would also need to become a stand-alone member of the WTO Information Technology Agreement to be able to benefit from zero tariffs Brexit on many IT goods. CA 2003, and much of the regulation surrounding the telecoms market, However, the United Kingdom may benefit from a shortened has its foundations in EU law. Following the United Kingdom’s departure approval process of state aid initiatives as a result of the European from the European Union, Ofcom is no longer subject to EU oversight Commission no longer having to assess the compliance of public funding and the considerations that influence its regulation of the market are with competition rules. likely to be more UK-centric as a result. Consequently, a more divergent In light of the European Commission losing its oversight of Ofcom, approach may be seen between the United Kingdom and the European Broadband Stakeholder Group has called for the third party’s supervi- Union over time. For example, aspects such as the general conditions sion (the CMA) to ensure appropriate scrutiny of Ofcom’s decisions and and specific conditions could be altered to better serve the interest of its independence from the government. the UK public, rather than having a broader EU focus. Although the UK government has stated its commitment to certain Even following the transition period UK telecoms law does not areas of current and future EU legislation (eg, the GDPR), the lack of significantly differ from the current regime. This is because the United certainty for many areas of the law means that any changes will have to Kingdom adheres to the World Trade Organization’s Basic Agreement be closely monitored in the future. and more particularly its Reference Paper, which has been described The EECC Directive came into force on 20 December 2018, replacing as EU law ‘writ large’. This means that if the United Kingdom falls out and reforming the Framework Directive (Directive 2002/21/EC), the of line with the EU regulatory framework, it will also not be in line with Authorisation Directive (Directive 2002/20/EC), the Access Directive the regulatory frameworks of the countries that adhere to the Basic (Directive 2002/19/EC) and the Universal Service Directive (Directive Agreement. 2002/22/EC), which were all transposed into UK law through national The WTO’s General Agreement on Trade in Services (GATS) is now legislation (mainly the CA 2003 and WTA 2006) and incorporate them not as relevant as it would have been had a deal not been reached. into a single document on 21 December 2020. The United Kingdom was GATS provides for several basic regulatory provisions such as major required to implement the EECC because the implementation date fell suppliers’ obligation to interconnect, transparent authorisation regime, within the Brexit transition period. The government published the draft independent regulation and procedural rules for allocation of scarce Electronic Communications and Wireless Telegraphy (Amendment) resources. (European Electronic Communication Code and EU Exit) Regulations In December 2020, the United Kingdom and European Union with a focus on the most significant changes introduced by the EECC, reached a trade deal, which will govern their relationship from the end such as investment in very high-capacity broadband networks, effec- of the transition period. tive consumer protection and engagement, ensuring efficient spectrum After the transition period, UK operators are still able to provide management to support 5G service rollout and expanding the definition cross-border telecoms services and operate in the European Union. The of ‘electronic communications service’ to include interpersonal commu- UK–EU trade agreements permit the United Kingdom to benefit from an nications services (such as internet phone and messaging services), obligation to interconnect with major suppliers, to permit the provision which will bring these types of services within the scope of regulation. www.lexology.com/gtdt 189 © Law Business Research 2021 United Kingdom Simmons & Simmons LLP

Spectrum changes MEDIA Spectrum allocation and bandwidth remains a major issue in the UK market both to manage existing capacity and coverage constraints and Regulatory and institutional structure requirements, but also to prepare for 5G service rollout. In December 17 Summarise the regulatory framework for the media sector in 2018, Ofcom proposed to include coverage obligations in their auction your jurisdiction. rules for the release of 700MHz and 3.6–3.8 GHz spectrum bands. Ofcom’s auction for radio spectrum suitable for mobile and 5G connec- Broadcasting is regulated by the legislation set out in the above questions in the 700MHz and 3.6-3.8GHz bands was held in May 2021. In tion with additional regulation from the Broadcasting Act 1990 (as March 2020, the government announced that it reached agreement amended by the Broadcasting Act 1996 and the Communications Act with four mobile network operators on their commitment to the Shared 2003 (CA 2003)). There have also been some minor changes to the regu- Rural Network plan, which aims to deliver good quality 4G coverage to latory regime through the Digital Economy Act 2017. at least 90 per cent of the United Kingdom over six years. The plan will EU Directives that have been transposed into UK law in advance be supported by government funding of £500 million. In light of these of the end of the Brexit transition period (ie, 31 December 2020) will commitments, Ofcom decided to no longer include coverage obligations be effective as UK law. The government has confirmed that Office of in their auction in spring 2020. It still, however, proposed to place a 37 Communications (Ofcom) licences will continue to apply after the transi- per cent cap on the overall spectrum that any one mobile company can tion period so that broadcasters can continue to broadcast to the United hold following the auction. Kingdom without applying for a new licence. UK broadcasting services In January 2020, Ofcom proposed to make additional spectrum available in the European Union may need two types of licences available for Wi-Fi in the 6GHz frequency band without the need for a depending on the countries to which they broadcast (one for services licence and to open extremely high-frequency spectrum, which is vital receivable in European Convention on Transfrontier Television (ECTT) for developing innovative future services. The consultation was open countries and one for services for non-ECTT countries). Services from until 20 March 2020. In December 2020, Ofcom published its consulta- countries that have signed and ratified the ECTT need no licence in addition on spectrum management strategy for the 2020s. It proposed action tion to the licence from their home country. Services from countries that in three areas of supporting wireless innovation, licensing to fit local have not signed and ratified the ECTT will need a licence from Ofcom to and national services and promoting spectrum sharing. be received in the United Kingdom.

Statement of Strategic Priorities Ownership restrictions The Statement of Strategic Priorities for telecommunications, the 18 Do any foreign ownership restrictions apply to media management of radio spectrum, and postal services was designated services? Is the ownership or control of broadcasters on 29 October 2019. It set out the government’s strategic priorities in otherwise restricted? Are there any regulations in relation several areas such as gigabit-capable broadband deployment, 5G, spec- to the cross-ownership of media companies, including radio, trum management, security and resilience of telecoms infrastructure television and newspapers? and furthering telecoms consumers’ interests. Restrictions as to who can hold a broadcasting licence and control a Ofcom Proposed Annual Plan 2021/22 broadcaster are set out in both the 1990 and 1996 Broadcasting Acts; The Ofcom Proposed Annual Plan for 2020/21 focuses on: these were revised by CA 2003, which relaxed these provisions. If at • ongoing investment in faster broadband and better mobile any point there is a change in control over the licence or the owner of coverage across the country; the licence, they must notify Ofcom, which will ensure that no person • keeping everyone connected through providing access to key disqualified from holding the licence has taken control. Ofcom will also communication services including in harder to reach locations; undertake a review to ensure that change of control will not negatively • ensuring customers are treated fairly; affect the programme content. If Ofcom does believe certain aspects of • supporting UK broadcasting; the programming may change, it could vary the licence. • working with the government on emerging policies that are meant Those who will be disqualified from holding a broadcasting licence to protect people from harmful content online (the UK government will generally fall under two categories: religious or political groups and has confirmed it intends to appoint Ofcom as the regulator for advertising agencies. online harms); and Although religious bodies are generally restricted from holding a • ensuring that the UK’s networks are secure, resilient and protected broadcasting licence, there are exceptions to this rule. They may own against cyber-attacks and outages. local analogue radio and satellite, cable broadcasting, local digital sound programme, national digital sound programme, television restricted There have also been important market reviews conducted by Ofcom service, digital programme service and digital additional service licences. that aim to assess and address competition issues in the fixed-line and mobile markets. Licensing requirements Following the legal separation of BT and Openreach agreed in March 19 What are the licensing requirements for broadcasting, 2017, Ofcom published its fourth Openreach Monitoring Unit report on including the fees payable and the timescale for the BT and Openreach compliance with the Openreach governance arrange- necessary authorisations? ments on 19 November 2020. The report notes the good progress made in strengthening and safeguarding Openreach’s strategic independence BBC while BT has also increased its full-fibre rollout. The report also noted The main document that regulates the BBC is the founding charter. how Openreach had worked constructively with the industry during The revised charter came into force on 1 January 2017. This revised the covid-19 pandemic and improved its engagement with wholesale charter made multiple changes to the regulation of the BBC. A unitary customers. The reports have noted concerns that the legal separation board was formed to replace the BBC Trust and BBC Executive. This between the two entities is not working as well as it could but has not new board ensures that the BBC’s strategy, activity and output are in found evidence of coordination in breach of the separation commitments. the public interest. From 2017, the BBC fell under the remit of Ofcom.

Channel 4 • analogue sound broadcasting services at a national or local level; The most recent licence for Channel 4 came into effect in January 2015 • radio licensable content services (services provided in digital or and was varied in December 2017 following a 2014 spectrum manage- analogue form, broadcast from a satellite or via an ECN, for use by ment decision by Ofcom. Channel 4 previously operated on a digital the public and consisting of sound programmes); replacement licence that replaced its original analogue broadcasting • additional radio services (a service consisting of the sending licence in 2004. The most recent licence keeps things essentially the of signals for transmission by wireless telegraphy using space same, although the 2017 variation provides for the clearance of the capacity within signals carrying any sound broadcasting service); 700MHz band for mobile data use by 1 May 2020 (note that 700MHz DTT • digital radio multiplex services; Clearance Programme was completed on 20 August 2020). • digital sound and digital additional sound services at both a national and local level (text and data services not intended to be Channels 3 and 5 related to programming); and The most recent licences for both Channels 3 and 5 came into effect • radio restricted services (licences intended to cover small-scale in January 2015 and were varied in December 2017 following a 2014 community uses). spectrum management decision by Ofcom. Channels 3 and 5 previously operated on digital replacement licences, which came into effect in 2004 Fees, duration and permissible content vary depending on the type of and replaced the analogue Channel 3 and 5 licences. The current licence licence to be granted. Ofcom suggests that the easiest way to set up a includes amendments to the regional programming commitments in radio service is to start an online radio station. Ofcom currently does Channel 3 licences for English regions; and creates a more localised not regulate online-only radio services which, therefore, do not require Channel 3 news service, while also lowering obligations. The 2017 varia- a licence from Ofcom. tions also provide for the clearance of the 700MHz band for mobile data use by 1 May 2020 (note that 700MHz DTT Clearance Programme was Foreign programmes and local content requirements completed on 20 August 2020). 20 Are there any regulations concerning the broadcasting of foreign-produced programmes? Do the rules require a Digital television programme services minimum amount of local content? What types of media fall Other than those provided by Channel 3, 4 or 5, digital television outside this regime? programme services (DTPS) licences cover the provision of television programmes services. The broadcasts covered will be in digital form for CA 2003 contains a limited number of provisions covering the broad- general reception on a digital television terrestrial multiplex. They will casting of foreign programmes. Regulations set out in Directive also cover ancillary services such as subtitling. 2010/13/EU (Audiovisual Media Services) (as amended by Directive (EU) 2018/1808 and incorporated into the Broadcasting Code), require that, Digital television additional services where practicable, European production (referred to as European Works) Digital television additional services licences cover television services should account for over 50 per cent of the transmission hours of each text and data services including teletext and electronic programme broadcaster established in that market (subject to certain exclusions). guides. These are not covered by DTPS licences as they are not consid- The amending Directive (EU) 2018/1808 provided, among other ered an ancillary service or digital television programme services. They things, for an increased European Works content quota for on-demand are broadcast in a digital form on a digital television multiplex. services, raised from 20 per cent to 30 per cent. The United Kingdom was required to fully implement the amending Audiovisual Media Television licensable content services Services Directive despite its exit from the European Union, as the date A television licensable content services (TLCS) licence covers services for implementation (19 September 2020) fell before the end of the Brexit broadcast from a satellite, distributed using an electronic communica- transition period. Despite the United Kingdom’s exit from the European tions network (ECN) or electronic communication service made available Union, works produced in the United Kingdom are still considered to by a radio multiplex. Its principal purpose must be the provision of fulfil the definition of European Works, as European Works are defined television programmes or electronic programme guides or both. The by reference to production by ECTT countries, rather than EU member service must also be available for reception by members of the public. states. As a result, there may not be a significant downturn in demand Services such as Channels 3, 4 and 5, covered by the other licences for UK-produced works, as they will continue to help fulfil European outlined in this section, do not require a TLCS licence. Internet services, Works quotas post-Brexit. pure video-on-demand (VOD) services and two-way services, such as Also, the Secretary of State maintains powers under CA 2003 to videophone, do not require a TLCS licence. disallow foreign television and radio should it fall foul of provisions A new local television licence regime was created as part of the in CA 2003 (eg, those that offend against taste or decency). Regarding Local Digital Television Programme Services (L-DTPS) Order 2012. An online and mobile content, there are no equivalent foreign restrictions. L-DTPS will have sufficient capacity at its location for one standard- CA 2003 gives Ofcom the power to require local programming to be definition digital service on the local multiplex. These are operated on included in the output of broadcasters where appropriate. An example Multiplex L with 29 L-DTPS licences awarded. of this is in Ofcom’s inclusion in every Channel 3 licence of a condi- Under the Broadcasting Act 1990, Ofcom must not grant a licence tion requiring a regional channel with programmes targeted at persons to any person unless it is satisfied that the person is a ‘fit and proper’ living in the area. person to hold it and is not disqualified by statute from holding the licence. The proposed service cannot be contrary to the standards Advertising objectives laid out in CA 2003. 21 How is broadcast media advertising regulated? Is online The complete Ofcom tariff table is available on its website. advertising subject to the same regulation?

Radio Ofcom’s role under CA 2003 is to regulate advertising on broadcast Under CA 2003, Ofcom has the authority to regulate the following media to ensure advertising rules and standards are met. These rules concerning independent radio services: and standards can be found across several instruments. Primarily, www.lexology.com/gtdt 191 © Law Business Research 2021 United Kingdom Simmons & Simmons LLP

broadcast media must follow the UK Code of Broadcast Advertising Must-carry obligations (the BCAP Code) which covers misleading advertising, protection of 22 Are there regulations specifying a basic package of children, harmful and offensive content, a ban on political advertising, programmes that must be carried by operators’ broadcasting and rules on environmental claims, to name but a few. Additional rules distribution networks? Is there a mechanism for financing the are contained in Ofcom’s Broadcast Codes, which cover issues such as costs of such obligations? taste, decency and product placement. Enforcement of the aforementioned rules, while ultimately Ofcom’s responsibility, has been largely Under CA 2003, public service broadcasters, including (but not limited contracted out to the Advertising Standards Authority and its associ- to) the BBC, ITV, Channel 4 and Channel 5, must provide public service ated bodies. broadcasting (PSB) channels to all the main distribution platforms. As One of the key amendments to the Audiovisual Media Services a result, such channels have a right to be carried on all the main plat- Directive, which were approved by the European Parliament in October forms on a free-to-air basis. Ofcom has a responsibility under CA 2003 2018, was to introduce new rules concerning the proportion of daily to review and report on the extent to which the PSBs have fulfilled the broadcasting time that would be taken up by advertisements. Under the purposes of PSB and make recommendations regarding how to main- new rules, advertising can take up a maximum of 20 per cent of the daily tain and strengthen the quality of PSB in the future, with reviews taking broadcasting period between 6.00am and 6.00pm, but broadcasters can place every five years. The purposes of PSB in the United Kingdom are: adjust their advertising slots within this time period so long as they do • to provide a variety of programmes on a wide range of not exceed the total 20 per cent limit. The new rules also introduce a subject matters; prime-time window between 6.00pm and midnight, during which adver- • to provide television services that are likely to meet the needs and tising will also only be allowed to take up a maximum of 20 per cent of interest of as many different audiences as practicable (as well as broadcasting time. those of the actual available audiences); and Product placement, while allowed in films, series made for televi- • to maintain high standards in respect of programme content, sion, sports programmes and light entertainment programmes (both development and skill, and editorial integrity. foreign and national), is prohibited in news and children’s programmes. This was a change brought in during Ofcom’s February 2011 change to In February 2020, Ofcom published Small Screen: Big Debate, a review the Broadcasting Code and includes rules requiring special logos to be of PSB covering 2014 to 2018. It noted that live broadcast viewing shown at the beginning and end of the programme, as well as at the end has declined over the period due to the increased use of online and of each advertising break to signify the use of product placement. on-demand services. In response, the report noted that PSB broad- There are strict rules on advertising and product placement in chil- casters are increasing their online and on-demand services to try and dren’s television programmes and content available on VOD platforms meet the expectations of their audience, but that, despite these efforts, introduced under the amendment to the Audiovisual Media Services they have not been able to fully recover from the loss of live broadcast Directive approved in November 2018. viewers, especially among younger generations. Revenue to PSB chan- In November 2020, Ofcom published a consultation on proposals nels, both in terms of advertising and the BBC licence fee, have fallen for amendments to the Broadcasting Code. Following this, Ofcom by 3.8 per cent and 4 per cent per year, respectively, over the 2014 to released a statement in December 2020, setting out the amendments 2018 period. In December 2020, Ofcom published a consultation on the Ofcom are making in light of stakeholders’ responses to the consulta- findings from its Small Screen: Big Debate review. The consultation tion. These amendments include changes to the rules in the Broadcast period ended in March 2021, and Ofcom is now considering responses Code to reflect revised product placement restrictions resulting from and feedback which will inform their formal recommendations to the UK the Audiovisual Media Services Regulations. government, to be published in the summer of 2021. Online advertising is subject to the CAP Code which imposes similar Alongside this decline in viewership of PSB channels, the debate standards and rules. The CAP Code also contains the rules that apply concerning the television licence fee has increased. Although the exist- to VOD services. While there are some differences between the codes, ence of the BBC licence fee is guaranteed until 2027 due to the BBC’s the BCAP Code states that BCAP works closely with CAP to provide, as Royal Charter, the BBC and the government have formally started is practicable and desirable, a consistent and coordinated approach to negotiations to set the level of the licence fee for 2022 to 2027. These standards-setting across non-broadcast and broadcast media. The CAP negotiations follow the outcome of a government consultation launched Code was amended in November 2018 to align with Regulation (EU) No. in February 2020 on the decriminalisation of television licence evasion, 2016/679 (General Data Protection Regulation) and provide rules and instead proposing the introduction of an alternative civil enforcement guidance in respect of the use of data for direct marketing generally and scheme. The consultation period is now closed, and the government the rules on the transparency and control of data collected and used for published their response to the consultation in January 2021. Most of the purpose of delivering ads based on web-users’ browsing behaviour. the responses gave an opinion that opposed decriminalisation. However, In June 2019, a new rule was added to the CAP Code banning the government has set out that it remains concerned that a criminal advertisements that contain gender stereotypes in both broadcast sanction for television licence evasion is increasingly disproportionate and non-broadcast media (including online and social media). Several and unfair in a modern PBS system. While no final decision has been adverts have since been banned following the introduction of the new taken, the government intends to keep the issue of decriminalisation rules owing to their containing harmful gender stereotypes, including under active consideration. advertisements for household name brands, such as Mondelez and Separately, since 1 June 2020, free television licences are no longer Volkswagen. automatically granted to the over-75s – instead, only those over 75 in In December 2020, CAP and BCAP issued a statement on the CAP receipt of pension credit are eligible for a free television licence. and BCAP Codes following the Brexit transition period. Broadly, the statement outlines the legislative framework created to ensure legal continuity after the end of the transition period and advises advertisers that all EU-derived legislation in force at the end of the transition period remains in force unless it is subsequently appealed.

Regulation of new media content Digital formats 23 Is new media content and its delivery regulated differently 25 Does regulation restrict how broadcasters can use their from traditional broadcast media? How? spectrum?

New media content is regulated under the same broadcast content rules Although licences may set out certain restrictions in terms of infor- and legislation as broadcast media, so, for example, internet protocol mation requirements and governing codes or guidance, broadcasting television services simply require the same licences as they would for licences are not restrictive in terms of how the spectrum may be used. the same content offline. Following the Audiovisual Media Services Directive, the United Kingdom must regulate VOD content and adver- Media plurality tising. Ofcom brought regulation of VOD in-house in January 2016 to 26 Is there any process for assessing or regulating media ensure the efficient and effective control of regulating VOD programme plurality (or a similar concept) in your jurisdiction? May the services. Rules include several minimum content standards, and authorities require companies to take any steps as a result of on-demand services are subject to the UK Code of Non-Broadcast such an assessment? Advertising, Sales Promotion and Digital Marketing. The amendments made to the Audiovisual Media Services Directive in November 2018 In its fifth report to the Secretary of State, dated 23 November 2018, extend its scope to video-sharing platforms in addition to VOD providers, Ofcom stated its statutory duty to review, at least every three years, such as Netflix and YouTube. A report by Plum Consulting, commis- the operation of Parliament’s ‘media ownership rules’ as found under sioned by the Department for Culture, Media and Sport, concluded in section 391 of CA 2003. Ofcom notes that the rules aim to protect the February 2020 that six video sharing platforms were, or could poten- public interest by promoting plurality and preventing undue influence tially be considered to be, under the jurisdiction of Ofcom under the by any one, or certain types of, media owner. provisions of the amended Directive. There are currently four broad media ownership rules that In December 2020, the Department for Culture, Media and Sport Parliament has put in place in the United Kingdom (and which are set published its full response to the consultation on the Online Harms out in Ofcom’s November 2018 report to the Secretary of State): White Paper, which covered online safety and regulation of social • the national cross-media ownership rule: preventing a newspaper media. The White Paper proposed a new statutory duty of care to ensure operator with a 20 per cent or more market share of newspaper companies take more responsibility for online user safety and tackle circulation from holding a Channel 3 licence or a stake in such a harm. It proposed that companies within the scope of the duty would licence of more than 20 per cent; and preventing the holder of a be social media platforms, file-hosting sites, public discussion forums, Channel 3 licence from holding an interest of 20 per cent or more messaging services and search engines. Compliance with this duty of in a large national newspaper operator; care would be overseen by an independent regulator. Following consul- • the Channel 3 appointed new provider rule: requiring regional tation, the full government response confirmed that Ofcom was named Channel 3 licensees to appoint a single news provider among them; to take on this oversight role, in addition to its existing remit. Also, the • the Media Public Interest Test: which allows the Secretary of State government proposed developing a new online media literacy strategy. to intervene in a merger involving a broadcaster or newspaper In May 2021, the UK government published its draft Online Safety enterprise, where that merger meets certain value or market share Bill, granting Ofcom new responsibilities as the regulator for online requirements. The Secretary of State may choose to issue an inter- harms. Under the draft bill, Ofcom will be given the power to fine vention notice triggering a review if a merger might result in harm companies up to £18 million, or 10 per cent of qualifying revenue, if they to the public interest; and fail in their new duty of care. • the Disqualified Persons Restrictions: where certain bodies or persons must first be approved by Ofcom before holding certain Digital switchover kinds of broadcast licence to prevent undue influence over broad- 24 When is the switchover from analogue to digital broadcasting casting services. required or when did it occur? How will radio frequencies freed up by the switchover be reallocated? Intervention by the Secretary of State on the grounds of public interest under the EA includes the need for accurate presentation of news and The UK digital television switchover commenced in 2008 and was free expression of opinion in newspapers, the need for a plurality of completed in 2012. The 600MHz band was auctioned in 2013 and the persons who control the media and the need for UK-wide broadcasting remaining freed analogue television channels have yet to be allocated. that is both of high quality and likely to appeal to a variety of tastes and Under the Digital Economy Act 2010, the Secretary of State was interests. Where a public interest ground applies, the Secretary of State given the power to nominate the digital switchover for radio broad- need not assess as to whether there would be a substantial lessening of casting. The UK government set the following criteria to be met before competition by the merger (as would otherwise be required). the switchover could commence: Detailed guidelines from 2004, by the former Department for Trade • digital listening must reach 50 per cent of all radio listening and Industry, set out those situations where the Secretary of State may (including via television and digital audio broadcasting (DAB)); intervene in merger situations involving media organisations, including • national DAB coverage must be equal to analogue coverage; and cross-media mergers (where there is a merger between a newspaper • local DAB reaches 90 per cent of the population. and a Channel 3 or 5 licence holder, for example). The Secretary of State may intervene where the merger involves entities from outside the Ofcom’s Communications Market Report, published on 30 September EEA. The policy is not for the Secretary of State to intervene where the 2020, indicated that DAB radio listening had reached 58 per cent. mergers are related to satellite and cable television and radio services. In an exercise of these powers, in June 2019, the Secretary of State issued a Public Interest Intervention Notice concerning the acquisition of shares in Lebedev Holdings Ltd (LHL) and International Digital News and Media (IDNM), resulting in Ofcom being required to investigate the transactions. LHL is the majority shareholder in Evening Standard www.lexology.com/gtdt 193 © Law Business Research 2021 United Kingdom Simmons & Simmons LLP

Limited, which is responsible for the publication of the Evening Standard It is anticipated by the UK government that the DST will affect newspaper and related online services, while IDNM is responsible for primarily large multinational businesses, as the DST only applies where the running of The Independent, the online-only news publisher. The a group’s worldwide revenue from digital activities exceeds £500 million, grounds for the issue of this Notice were the need for accurate pres- of which £25 million must derive from UK users. There is, however, a entation of news and the need for free expression of opinion. Following £25 million allowance, and the DST will only be levied on UK-generated its enquiries, Ofcom concluded that a reference to the Competition and revenues over £25 million. Markets Authority (CMA) was not warranted on either ground. The Exchequer has estimated that the measure will raise £280 million in 2020–21, rising to £515 million in 2024–25. However, the Key trends and expected changes impact that the introduction of the DST could have on the UK–US trade 27 Provide a summary of key emerging trends and hot topics in deal to be negotiated in the wake of Brexit remains to be seen. media regulation in your country. REGULATORY AGENCIES AND COMPETITION LAW Brexit As with telecoms, broadcasting regulation is founded on EU law. Regulatory agencies Although the UK government has not brought in any significant diver- 28 Which body or bodies regulate the communications and gent measures, the United Kingdom’s exit from the European Union media sectors? Is the communications regulator separate has caused some changes to broadcasting licence requirements from the broadcasting or antitrust regulator? Are there for the United Kingdom and some EU member states (made by the mechanisms to avoid conflicting jurisdiction? Is there a Broadcasting (Amendment) (EU Exit) Regulations 2019). The most specific mechanism to ensure the consistent application of significant change to the licensing requirements relates to the country- competition and sectoral regulation? of-origin principle, which underpins European broadcasting regulation. Under this principle, a broadcaster regulated in one EU member state Ofcom and the Competition and Markets Authority (CMA) have been the is not required to apply for an additional licence to be able to transmit bodies responsible for the regulation of the media and communications in another member state. sectors in the United Kingdom since 1 April 2014. Following the end of the Brexit transition period, the United Kingdom is no longer a party to the Audiovisual Media Services Ofcom Directive and this principle no longer applies. Despite the Audiovisual Aside from its regulatory functions, Ofcom also has competition law Media Services Directive having been transposed into UK law, the enforcement powers, which it holds concurrently with the CMA. These country-of-origin principle would require reciprocity from other EU concurrently held powers allow the CMA and sector-specific regulators member states to continue to operate. However, the ECTT continues to in their respective areas to enforce the competition law prohibitions apply. The ECTT was signed by 20 EU member states, as well as the contained in the Competition Act 1998 (CA 1998). In Ofcom’s case, these United Kingdom, and allows freedom of reception for services among concurrency powers are limited to activities concerned with communi- the signatory states. Therefore, UK broadcasters regulated by Ofcom cations matters. will continue to be allowed to broadcast in ECTT signatory states, as CA 2003 sets out Ofcom’s principal duty of furthering citizen will ECTT-regulated broadcasters in the United Kingdom. The addi- and consumer interests by regulating communications, protecting tional licensing requirements will therefore apply only concerning the consumers from harm and by promoting competition. The Secretary EU member states that have not signed the ECTT, which includes the of State retains some powers in certain circumstances – for instance, Netherlands and Ireland (although there are separate provisions in the where a merger may raise public interest questions relating to the Good Friday agreement applicable to certain Irish broadcasters). UK plurality of the media or national defence or if the Secretary of State broadcasters are now required to apply for additional licences for their considers it is necessary to remove any concurrency functions. service to be made available in these states – the same applies to any Ofcom’s competition law powers cover the prohibitions against service providers from these states wishing to broadcast in the United anti-competitive agreements and abuse of a dominant position. These Kingdom, that will be required to obtain an Ofcom licence. powers are derived from the CA 1998. Ofcom also has investigative Although the ECTT may help to mitigate the effect of Brexit on powers over markets, with the ability to make references to the CMA for broadcasters to some extent, it cannot be enforced in the same way that an in-depth market investigation under the Enterprise Act 2002. the Audiovisual Media Services Directive previously could – while there One of Ofcom’s competition law functions under CA 2003 is to is a standing committee to address disputes, and provision for arbitra- ‘further the interests of consumers in relevant markets, where appro- tion in the convention, these methods have seldom been used. priate by promoting competition’. Both the Enterprise and Regulatory One further limitation of the ECTT that should also be taken into Reform Act 2013 (ERRA 2013) and the government’s 2015 Strategic account is its more limited scope – it does not cover online streaming Steer encourage all the concurrent regulatory authorities to coordi- services, which continue to be regulated under the Audiovisual Media nate in the exercise of their general competition powers, rather than Services Directive in EU member states. their purely sector-specific regulatory powers. To facilitate this, the ERRA 2013 encourages information-sharing between Ofcom, the CMA Digital Services Tax and the other regulatory bodies. The UK Competition Network and UK The introduction of a Digital Services Tax (DST), effective from 1 April Regulator’s Network provide the fora within which this improved coordi- 2020, was announced in the budget held on 11 March 2020. The DST nation can take place such that cases may more effectively be resolved. is levied at 2 per cent on the revenues of companies such as search engines, social media services and online marketplaces that derive value CMA from UK users. The introduction of the DST was intended to remedy the The CMA is the overarching UK competition regulatory body, coordi- perceived misalignment between the place where company profits are nating competition policy and encouraging consistent enforcement taxed and the place where value is created. The DST is intended to be in between itself and the sector-specific regulators. The CMA was estab- place only until an appropriate international solution is in place to better lished by the ERRA 2013, which combined the Office of Fair Trading and address the issue. the Competition Commission. The CMA’s powers include the ability to

194 Telecoms & Media 2021 © Law Business Research 2021 Simmons & Simmons LLP United Kingdom act on a case after consultation with the sectoral regulators if the CMA Secretary of State can also be appealed, including decisions concerning believes that the case would be better tackled centrally, and the ability networks and spectrum functions, any restrictions or conditions set to withdraw a competition case from a sectoral regulator and progress by regulators on electronic communications, a direction of Ofcom the case itself. regarding its powers to suspend or restrict electronic communications, The legal basis on which the concurrency regime is to be oper- or a specific direction under the Secretary of State’s powers under the ated is set out in the Competition Act 1998 (Concurrency) Regulations Wireless Telegraphy Act 2006. Under the CAT Rules (2015), where an 2014 (the concurrency regulations). Details of the relationship between appeal is made concerning price control matters, the CAT must refer the Ofcom and the CMA concerning competition law can be found in the case to the CMA. The CMA will then deliberate and decide on an outcome ‘Memorandum of understanding between the [CMA] and [Ofcom] – under CA 2003. concurrent competition powers’ (published on 2 February 2016). The Schedule 8 of CA 2003 lists certain types of (more legislative type) memorandum sets out how the concurrency regulations are to be decisions by the CMA, Ofcom and Secretary of State that are not appeal- applied to the Ofcom–CMA relationship. Both will endeavour to reach able to the CAT, but rather by way of judicial review to the Administrative an agreement as to which body will exercise its concurrent competition Court. These include, inter alia, the instigation of any criminal or civil powers in any given case, which will include taking into consideration proceedings, decisions relating to administrative charges orders, the relative expertise and circumstances of the bodies. On an occasion the publication of the UK Plan for Frequency Authorisation, recovery where a decision is not adequately reached within two months, the CMA of sums payable to Ofcom, giving effect to regulations and imposing ‘must notify [Ofcom] that it intends to determine which [of the bodies] penalties. is to exercise’ their concurrent powers. The concurrency regulations Before the passage of DEA 2017, the appeal process for appealing expressly prevent the possibility of ‘double jeopardy’ (where two regu- Ofcom’s decisions was on the merits. It was cumbersome, permitting latory bodies review the same case simultaneously) and also provide for considerable new evidence and new parties to an appeal. Ofcom poten- rules regarding case transfers between concurrent regulatory bodies. tially did not know these additional factors at the consultation phase According to the CMA’s most recent ‘Annual report on concur- and these could be introduced mid-process. DEA 2017 makes substan- rency’ (published on 22 April 2021), the CMA and the regulators have tial alterations to the way an appeal is brought under CA 2003. The ‘continued to take steps to promote competition, both together and indi- new regime attempts to streamline the process of gathering evidence, vidually, despite the disruption and calls on resources for other work’ including the cross-examination of witnesses and experts, and the and ‘the relationship between the CMA and regulators will now also be general treatment of that evidence. The CAT must apply the same informed by the findings from the CMA’s report into the state of competi- principles as would be applied by a court on an application for judicial tion in the UK’ (published on 30 November 2020 and which found that review. The CAT may dismiss the appeal, or quash the whole or part over the last 20 years competition in the United Kingdom overall may of the decision to which the appeal relates, remitting the matter back have weakened). The annual report specifically notes that ‘the CMA to the decision-maker with a direction to reconsider and make a new and sector regulators will be at the forefront of efforts to protect and decision. Under the DEA 2017 (Commencement No. 1) Regulations 2017 promote competition in the United Kingdom as the country recovers (SI 2017/675), the new standard of review applies to all appeals from from the pandemic’. 31 July 2017.

CMA panel Television and radio broadcasting appeal regime If it is reasonably believed that certain characteristics or conduct Owing to the changes enacted by DEA 2017, the appeals process for within a communications market may be harmful to competition, either television and radio broadcasting-related decisions is similar to the Ofcom or the CMA can bring a cross-market reference to the attention ECN, ECS and AF appeal regime. Ofcom must have first complied with of an impartial CMA panel – consisting of members not involved with its powers under the Broadcasting Act 1990 (BA 1990) and have consid- the initial investigations. This panel may then investigate (potentially ered, before exercising its BA 1990 powers for competition purposes, through a Phase 2 enquiry under the EA) and can decide whether it whether there is a more appropriate way of proceeding under CA 1998 should take action to mitigate, prevent or remedy any adverse competi- concerning some or all of the matters in question. A party affected by tion effect or negative impact on consumers – including higher prices, an Ofcom decision may appeal to the CAT only that part of the decision lower quality, reduced variety of goods or services and stifled innova- relating to Ofcom’s competition powers under BA 1990. If a party wishes tion. Alternatively, it may recommend another body take remedial action to appeal any other type of Ofcom decisions, this must be done following or can instead indicate what type of remedial action needs to take place standard judicial review procedures. to rectify any issues that are uncovered. Competition law developments Appeal procedure 30 Describe the main competition law trends and key merger 29 How can decisions of the regulators be challenged and on and antitrust decisions in the communications and media what bases? sectors in your jurisdiction over the past year.

CA 2003 and the Digital Economy Act 2017 (DEA 2017) outline the Mergers appeal mechanisms for Ofcom and CMA decisions concerning electronic Bauer Radio – Celador Entertainment communications networks (ECNs), electronic communication services On 1 June 2020, the CMA accepted final undertakings from Bauer (ECSs) and associated facilities (AFs). Also, CA 2003 offers appeal mech- following the CMA’s final report (12 March 2020) in its Phase 2 inves- anisms to those wishing to appeal decisions relating to television and tigation into Bauer’s acquisition of certain businesses of Celador radio broadcasting. Entertainment Limited, Lincs FM Group Limited and Wireless Group Limited, as well as the entire business of UKRD Group Limited. The ECN, ECS and AF appeal regime CMA concluded that the acquisitions had resulted, or may be expected Certain Office of Communications (Ofcom) decisions may be appealed to result, in a substantial lessening of competition in the market of the to the Competition Appeal Tribunal (CAT) on judicial review grounds, supply of representation for national advertising to independent radio namely: illegality, irrationality and unfairness. Decisions taken by the stations. The CMA was not satisfied that divestment was feasible as www.lexology.com/gtdt 195 © Law Business Research 2021 United Kingdom Simmons & Simmons LLP

a remedy and therefore decided that a behavioural remedy, requiring review. Notably, ‘communications’ is a sector where transactions that Bauer to provide advertising representation services to independent require mandatory notification were relating to public communications radio stations on at least the same or better terms than they were previ- networks, services and associated facilities (the relevant definitions of ously receiving, would be more appropriate. which being drawn from CA 2003).

Sinch Holding AB – SAP Digital Interconnect Unit from SAP SE Antitrust On 21 October 2020, the CMA cleared the anticipated acquisition by Ofcom investigation to the provision of equipment and related Sinch Holding AB of the SAP Digital Interconnect Unit from SAP SE services in the electronic communications sector after a Phase 1 investigation. The Parties overlapped in the supply of In October 2020, Ofcom issued a Statement of Objections (SO) to Motorola application-to-person (A2P) short message service (SMS) to enterprise Solutions UK Limited, its ultimate parent company Motorola Solutions customers; A2P SMS to other A2P SMS suppliers; and cloud communi- Inc, and Sepura Limited. The SO set out Ofcom’s provisional view that cations platform as a service. the parties infringed Chapter I of CA 1998 by exchanging competitively sensitive information relating to their pricing intentions for a procure- Updated CMA merger assessment guidelines ment exercise run by the Police ICT company in 2018 covering devices, On 18 March 2021, the CMA published its final updated UK merger accessories and related services used on the Airwave radio network. assessment guidelines. Among other things, the guidelines set out its approach in reviewing digital mergers and reflect the develop- Ofcom investigation into parcel delivery sector ments that have occurred in the digital markets since its last guidance In January 2021, Ofcom announced that it had decided to close its in 2010, which now requires more complex analysis when assessing investigation into agreements between providers of parcel delivery mergers. This includes a more dynamic assessment of the prevailing and pick-up services. This investigation examined concerns that the market conditions if the merger is not to be concluded, less weight on agreements may have contained terms establishing minimum prices market definition and further guidance on how the CMA will now assess and imposing online sales restrictions. Ofcom closed the investigation ‘substantial’ lessening of competition. because it concluded that Ofcom’s resources would be better directed towards other matters. Cellnex – CK Hutchison UK towers On 13 April 2021, the CMA closed its invitation to comment on the antici- Royal Mail abuse of dominance pated acquisition of the passive infrastructure assets of CK Hutchison On 7 May 2021, the Court of Appeal dismissed Royal Mail’s second Networks Europe Investments Sàrl in the United Kingdom by Cellnex appeal stemming from Ofcom’s decision to fine Royal Mail £50 million UK Limited. A Phase 1 investigation was commenced on 17 May 2021. for abusing its dominant position by discriminating against its only major competitor delivering letters that was also one of Royal Mail’s Liberty Global plc – Telefónica SA (Virgin – O2) wholesale customers; Whistl (the CAT having previously dismissed On 14 April 2021, the CMA provisionally cleared the anticipated joint an initial appeal in January 2020). At the time, Whistl was competing venture between Liberty Global Plc and Telefónica SA. The investigation directly with Royal Mail by delivering ‘bulk mail’ to addresses in certain focused on whether the merger could lead to reduced competition in parts of the United Kingdom. Royal Mail’s wholesale price increases wholesale services. Virgin provides wholesale leased lines to mobile meant that any of Royal Mail’s wholesale customers seeking to compete telecommunications companies, such as Vodafone and Three, which with it by delivering letters in some parts of the country, as Whistl was, they use to connect key parts of their network. Similarly, O2 offers would have to pay higher prices in the remaining areas – where it used mobile operators such as Sky and Lycamobile, which do not have their Royal Mail for delivery. The Court of Appeal dismissed Royal Mail’s own mobile network, use of the O2 network to provide their customers further appeal concluding that the CAT had not erred in its dismissal of with mobile phone services. The CMA was initially concerned that, the initial appeal. following the merger, Virgin and O2 could raise prices or reduce the quality of these wholesale services, or withdraw them altogether. After Digital markets strategy a Phase 2 investigation, the CMA inquiry group has now provisionally Digital Regulation Cooperation Forum concluded that the deal is unlikely to lead to any substantial lessening In July 2020, the CMA, Ofcom and the Information Commissioner’s Office of competition concerning the supply of wholesale services. (ICO) established the Digital Regulation Cooperation Forum (DRCF) to deliver a step-change in coordination and cooperation between National Security and Investment Act 2021 regulators in digital markets. The DRCF is a non-statutory voluntary The UK government’s existing powers to intervene in mergers and network – it does not have a decision-making role and does not provide acquisitions on the grounds of national security are set out in the EA formal advice or direction to members. Rather, the forum aims to 2002. The government has reviewed these powers and concluded that achieve coherent, informed and responsive regulation of the UK digital they are no longer sufficient to address the challenging and changing economy; specifically, the organisations believe that the challenges national security threats the United Kingdom faces. Accordingly, on posed by the regulation of online platforms require a greater level of 29 April 2021, the UK government adopted the National Security and regulatory cooperation. The Financial Conduct Authority (FCA) has been Investment Act 2021 (NSIA 2021). NSIA 2021 provides the UK govern- an observer member of the DRCF since the outset and joins as a full ment with new stand-alone powers to screen investments, through a member of the DRCF from April 2021. In its annual plan published on 10 process entirely separate from competition regulation and merger March 2021, the DCRF states it will focus on: control. NSIA 2021 gives the government powers to intervene in any • responding strategically to industry and technological transaction giving rise to a risk to national security. Transactions developments; subject to mandatory notification will not be able to close until the clear- • joined-up regulatory approaches; ance is granted. Where transactions do not fall within the mandatory • building skills and capabilities; regime, there would be a parallel voluntary notification system for deals • building clarity through collective engagement; and that ‘may raise national security concerns’. The government will retain a • DRCF development. broad ‘call in’ power, enabling it to pick out non-notified transactions for

Market study into online platforms and digital advertising powers including the ability to fine for non-compliance. The White Paper On 1 July 2020, the CMA published the final report of its market study covers a range of previously defined issues such as including terrorist into online platforms and digital advertising. The CMA found that content, hate crimes and the sale of illegal goods. However, it also covers competition is not working well in these markets, leading to substantial harmful behaviour that is less well defined such as cyber-bullying, harm for consumers and society as a whole. Accordingly, to achieve its trolling, and spreading fake news. The government expects the Online ‘substantial package of reform’ it recommended that the government Safety Bill will be ready in 2021 – a draft of the bill was published on should legislate to introduce a new regulatory regime for platforms 12 May 2021 which, among other things, provides that search services, comprising of both an enforceable code of conduct and pro-competitive social media platforms, and other online services that enable user- interventions, drawing on the work of its study and that of the Digital generated content to be shared between users must mitigate the risk of Markets Taskforce. harm arising from illegal content, for example, by minimising the spread of such content. It also confirms that Ofcom will be the regulator to Digital Markets Taskforce enforce the regime. Earlier, in March 2021, Ofcom announced that it is to On 8 December 2020, the Digital Markets Taskforce (a CMA-led initia- develop a new digital and technology hub in Manchester in preparation tive working closely with Ofcom and the ICO), published its advice to for its new role. The Online Safety Bill is part of the government’s new the government on the potential design and implementation of pro- legislative programme which also includes the Telecommunications competitive measures for unlocking competition in digital markets. The (Security) Bill that aims to ensure the long-term security and resilience Taskforce set out advice to the government on several proposals to of the UK’s telecommunications networks and infrastructure; and the prevent ‘powerful digital firms’ from ‘exploiting their powerful positions’ Product Security and Telecommunications Infrastructure Bill that will as well as to drive vibrant competition and innovation. The proposals ensure that smart consumer products such as smartphones are more include, amongst others, a recommendation that the government estab- secure against cyber-attacks. lish a Digital Markets Unit (DMU) to further the interests of consumers and citizens in digital markets, by promoting competition and innova- UK withdrawal from the European Union tion; and that the DMU should oversee a regulatory framework for the The Trade and Cooperation Agreement between the European Union most powerful digital firms – those with ‘substantial, entrenched market and the United Kingdom requires each party to maintain and enforce power’– this being the ‘Strategic Market Status (SMS) regime’. The three effective competition law that applies to all economic actors irrespec- key proposed pillars of the regime for SMS firms are: tive of the nationality of ownership status and in a transparent and • a new, legally binding code of conduct, tailored to each firm and to non-discriminatory manner. To achieve these objectives, the Agreement where the evidence demonstrates problems might occur, designed provides for certain cooperation and information sharing. and overseen by the DMU; Notwithstanding certain differences in wording between the UK • pro-competitive interventions, which can be used to address the and EU merger and antitrust regimes, no immediate changes to the sources of market power (eg, imposing interoperability require- substantive assessment tests are envisaged as a result of the UK’s ments); and withdrawal from the European Union. That said, divergences could • enhanced merger rules, which would enable the CMA to apply arise over time. Each regime will continue to remain applicable to the closer scrutiny to transactions involving SMS firms. undertakings of the other, but UK undertakings will no longer benefit from the one-stop shop principle. Parallel merger reviews or antitrust Latest digital strategy investigations are possible. On 9 February 2021, the CMA published its latest refresh of its Digital Similarly, as regards the UK communications and media regula- Market Strategy (previously published in 2019). The refresh document tory framework, there are not expected to be significant impacts on how sets out the CMA’s aims and key priorities across its digital markets businesses operate and how consumers are protected. This is because work, as well as an update on the work completed since the last EU-derived rules applicable to communication providers and governing strategy. The overarching ambition, set out in the refreshed Digital the way Ofcom regulates markets are implemented in UK law and will Markets Strategy, is to build and establish the new DMU within the CMA. be corrected – where necessary – by secondary legislation. As of 7 April 2021, the DMU is already established within the CMA on a non-statutory basis to focus on operationalising and preparing Coronavirus for the new regime. The government has committed to consulting on 31 What emergency legislation, relief programmes and other proposals for the new pro-competition regime in 2021 and to legislate initiatives specific to your practice area has your state when parliamentary time allows. implemented to address the pandemic? Have any existing government programmes, laws or regulations been amended Consumer protection to address these concerns? What best practices are advisable Online reviews for clients? On 22 May 2020, the CMA opened an investigation into several major websites that display online reviews. The CMA will investigate whether On 23 March 2021, the CMA published its Annual Plan for 2021/22 and these websites are taking sufficient measures to protect consumers confirmed that as part of the UK government’s wider covid-19 recovery from fake and misleading reviews. In particular, it will examine how efforts it will, in particular, focus on protecting consumers from the websites currently detect, investigate and respond to fake and breaches of competition and consumer laws and promoting innovation misleading reviews. This investigation is part of a wider programme of and growth. work tackling fake and misleading online reviews. The impacts of the coronavirus were far-reaching. In the United Kingdom, the CMA issued guidance on its approach to merger assess- Ofcom appointed as the regulator for online harms ments during the pandemic, acknowledging that some parties may have In December 2020, the UK government published its response to the additional difficulty meeting statutory deadlines and in some circum- consultation on the Online Harms White Paper that detailed its plans stances, the CMA will not penalise parties for non-compliance, but to have an independent watchdog that will write a ‘code of practice’ for will instead stop the clock. While operations are returning to the new social media platforms and internet companies, and, have enforcement normal, pre-notification talks may still take longer than usual because www.lexology.com/gtdt 197 © Law Business Research 2021 United Kingdom Simmons & Simmons LLP

of difficulties for the CMA in obtaining information from the merging parties and from third parties that continue to wrestle with operational challenges. The covid-19 crisis has also been relevant for substantive merger assessments, the CMA’s decision to prohibit the JD Sports and Footasylum merger was quashed by the CAT in November 2020, with the CAT stating that, in particular, the CMA had not taken enough account of the likely effects of the covid-19 pandemic. As regards antitrust and consumer enforcement, the coronavirus continues to impose upon businesses unprecedented challenges to Alexander Brown [email protected] their business models and supply chains. Competition authorities have sought to provide guidance and certain exemptions from competition David Trapp law to enable markets to deal with these unprecedented demands. The [email protected] CMA has issued general guidance as well as certain exemptions (eg, supermarkets, retail, health services and dairy). Throughout, the CMA CityPoint was keen to highlight that it will not hold back in investigating those One Ropemaker Street seeking to take advantage of these measures or the pandemic in general London EC2Y 9SS through, for example, price gauging or breaches of consumer law. The United Kingdom CMA used its Annual Plan for 2021/22 to call for stronger consumer Tel: +44 20 7628 2020 protection, decision-making and fining powers for the CMA. It argues Fax: +44 20 7628 2070 that the covid-19 pandemic is likely to make more consumers ‘vulner- www.simmons-simmons.com able’ and that market changes such as more economic activity taking place online could exacerbate the position of those who are already in a vulnerable position with no online access or know-how. The priority for Ofcom’s sectors through the pandemic was to maintain support for consumers and businesses. Ofcom adapted its regulatory approach during this period and revised its proposed Plan of Work for 2020/21 to take account of the coronavirus crisis and provide a revised timetable for its work. In recognition of the fact that stakeholders needed to focus their time and effort on business-critical matters, Ofcom adapted its planned work programme and suspended consultation deadlines and information requests and put on hold new consultations, decisions and information requests. At the same time, Ofcom sought to expedite any standards enforcement cases involving potentially harmful broadcast content relating to the coronavirus. Ofcom also published several guidance notes concerning the pandemic, specifically concerning broadcasting standards, data on consumption and attitudes, and combatting misinformation. On 13 May 2021, the Department for Digital, Culture Media & Sport (DCMS) published correspondence concerning a request from the Premier League for a CA 1998 exclusion order from the Chapter I prohibition to allow it to renew its current domestic broadcasting arrangements without conducting the normal tender process (that should have taken place early 2021). The correspondence indicates that the UK government is minded to make the exclusion order so that the broadcast packages roll over on the same terms to the existing rights holders. The government has invited representations before making a final decision. Best practice was, and remains, for businesses to create an open – and early – dialogue with the regulator.

Colleen Sechrest, Kent D Bressie, Michael Nilsson and Paul Caritj Harris Wiltshire Grannis LLP

COMMUNICATIONS POLICY 2015. Under the statute, an information service cannot be treated as a common-carrier service – in other words, the FCC has limited authority Regulatory and institutional structure to impose regulatory obligations on BIAS. 1 Summarise the regulatory framework for the communications The FCC has not decided whether VoIP is regulated as a sector. Do any foreign ownership restrictions apply to common-carrier service; nevertheless, it has imposed several common- communications services? carrier-like non-economic regulatory obligations on VoIP providers. Specifically, VoIP services, including one-way or non-interconnected In the United States, regulatory requirements, and even the regula- VoIP services, must be accessible to individuals with disabilities, as tors with jurisdiction, vary by technology. Multiple national, state and must email and other text-based communications services. Some states local government agencies can be involved in a particular service or have asserted regulatory authority over fixed-line VoIP. transaction. The Communications Act of 1934 (the Communications Act) Concerning media, regulation of over-the-air broadcast services establishes the basic sector-specific framework. remains tied to the FCC’s authority to grant licences for use of the RF spectrum and is stricter than the regulation of cable television. The FCC Telecoms and RF regulation has not asserted complete jurisdiction over over-the-top (OTT) internet- State and territorial public utilities commissions (PUCs) regulate based media services. Although it has begun to apply accessibility rules intrastate telecommunications services (ie, where the endpoints of a to some such services, efforts to apply additional rules to such services communication fall within the borders of a single state or territory), but appear stalled for the time being. PUCs generally do not regulate mobile services, nomadic Voice over Congress continues to consider an overhaul of federal telecommu- Internet Protocol (VoIP) or, in a majority of states, any other VoIP. The nications laws, but any sort of action would likely take several years and national regulator, the Federal Communications Commission (FCC), does not appear to be imminent. regulates interstate and international telecommunications (including, to some extent, VoIP), mobile services, non-US governmental uses of Marketing regulation radio frequency (RF) spectrum, over-the-air broadcast television and The FCC sets rules under the Telephone Consumer Protection Act radio, and certain aspects of cable television content. In the past, the (TCPA) regarding companies’ telemarketing activities that involve the FCC generally has not regulated internet access services, backbone use of automatic telephone dialling system (autodialler) technology, networks or peering arrangements. In its 2015 Order ‘Protecting and telemarketing that involves an artificial or pre-recorded voice, and the Promoting the Open Internet’ (2015 Order), the FCC imposed open sending of junk faxes. The FCC’s telemarketing regulations are detailed internet rules for both fixed and mobile broadband internet access and nuanced, and so companies should consult these regulations before services (BIAS) and asserted jurisdiction over the exchange of traffic engaging in telemarketing in the United States. However, at a high level, between providers and ‘connecting networks’, such as content delivery companies need ‘prior express written consent’ (a term of art with networks. Reversing course under the new Republican Chairman very specific requirements) before placing an autodialled call or text and majority, in December 2017, the Commission adopted an order message involving marketing, a pre-recorded call involving marketing, ‘Restoring Internet Freedom’ (2017 Order) that reversed – in nearly all or a call that uses an artificial voice to a mobile phone that involves respects – the 2015 Order. In particular, the 2017 Order retained a modi- marketing. Companies also need prior express written consent to place fied version of the requirement that BIAS providers disclose certain a pre-recorded call or a call involving an artificial voice to a landline if information about their service, but otherwise eliminated the 2015 net it involves marketing. Companies must honour all consumer requests neutrality rules and disclaimed any statutory authority for oversight to no longer receive autodialled or pre-recorded calls, as long as the over interconnection practices. consumer makes the request through a reasonable means. The FCC The United States has not amended its telecommunications stat- and state attorneys general can bring enforcement actions for violations utes specifically to take account of convergence. The Communications of the TCPA, and these actions can result in large fines. The TCPA also Act is divided into separate titles for common-carrier services, RF gives call recipients the right to bring private lawsuits seeking damages spectrum regulation and licensing (including over-the-air broadcast of US$500 to US$1,500 per call that violates the TCPA. TCPA lawsuits television and radio) and cable television regulation. When the FCC are often brought as large class actions. imposed open internet rules on BIAS in 2015, it also classified that The state of TCPA law is currently in flux. In the high-profile case service as a ‘telecommunications service’, exposing BIAS providers to of ACA International v FCC (ACA International) the US Court of Appeals certain heightened FCC regulations as common carriers under Title II of for the District of Columbia Circuit overturned FCC rules regarding what the Communications Act. In the 2017 Order, however, the FCC reclassi- type of technology qualifies as an autodialler. The ACA decision also fied BIAS as an ‘information service’ under Title I of the Communications struck down the FCC’s rule that companies were liable for making more Act – returning to a classification the FCC had applied from 2005 to than one call to the wrong person, owing to the number in question www.lexology.com/gtdt 199 © Law Business Research 2021 United States Harris Wiltshire Grannis LLP

being reassigned from one subscriber to another, when the caller had that senders of commercial email identify emails as an advertisement, no actual knowledge of the reassignment. The FCC chairman and two provide information about the identity and location of the sender, and Republican commissioners have praised the DC Circuit’s decision, provide a functional opt-out mechanism. The FTC also requires disclo- which overturned rules that the FCC adopted under democratic control. sures regarding paid endorsements. Violations of these rules can result In another high-profile case, Marks v Crunch San Diego, LLC (Marks), in costly monetary penalties. The FTC also has relatively broad power the US Court of Appeals for the Ninth Circuit noted that the District of to enjoin and seek consumer redress for unfair or deceptive marketing Columbia Circuit has vacated the FCC’s interpretation of what devices practices, even if such a practice does not violate a specific FTC rule. qualify as autodiallers, leaving only the statutory definition as a starting In the wake of the 2017 Order, and consistent with a Memorandum of point. Holding that the definition is ‘ambiguous on its face’, the Court Understanding entered into with the FCC, the FTC has stated that it will examined the context and structure of the statutory scheme to reach monitor consumer complaints about ISPs and will take action against its determination that an autodialler includes equipment that has the unfair or deceptive ISP practices. The agency has also indicated that it capacity to both store numbers and dial numbers automatically – an will continue to investigate complaints involving privacy practices and expansive interpretation that would include smartphones. In response data breaches. to ACA International and Marks, the FCC has issued public notices Many states also set limits on when and how companies can seeking comment on what constitutes an autodialler, but it has yet to engage in telemarketing, with many requiring state registration before act to clarify the definition. In the reassigned number context, the FCC: beginning to telemarket to state residents, further limiting the times • established a single, comprehensive database of reassigned when telemarketing may occur, and requiring specific disclosures at the number information from each provider that obtains North beginning of a call. American Numbering Plan (NANP) US geographic numbers, including toll-free numbers; and State and local rights-of-way and siting • adopted a safe harbour from TCPA liability for those callers State and local government franchising authorities regulate cable that choose to use the database to learn if a number has been operators and some telecommunications services. Local governments reassigned. regulate zoning, rights of way and wireless tower siting. In recent years, many states have adopted legislation limiting the authority of local and In 2019, the FCC adopted rules to implement the RAY BAUM’S Act municipal governments over permitting and regulation of wireless facil- (Repack Airwaves Yielding Better Access for Users of Modern Services ities, with a particular focus on limiting the number of fees that can be Act of 2018) by: charged for placement of small wireless facilities in public rights-of-way. • extending the reach of the FCC’s ‘truth in Caller ID’ rules to include The FCC has established pre-construction environmental and covered communications originating from outside the United historic preservation review requirements for wireless antennas. The States to recipients within the US; and FCC works in conjunction with the Federal Aviation Administration to • expanding the scope of covered communications to include text regulate antenna and tower heights and associated lighting and marking messages and additional voice services. requirements. In March 2018, the FCC adopted new rules streamlining the processes for local and tribal wireless tower approvals, including To address the problem of fraudulent robocalling and illegal phone excluding ‘small wireless facilities’ on non-tribal lands from environ- number spoofing, in March 2020, acting under the Pallone-Thune mental and historic preservation review. ‘Small wireless facilities’ Telephone Robocall Abuse Criminal Enforcement and Deterrence encompasses structures that are either less than 50 feet in height or (TRACED) Act, the FCC adopted rules for communications service no more than 10 per cent taller than other nearby structures, and that providers to implement the STIR/SHAKEN caller ID authentication support small antennas and related equipment. technology in the Internet Protocol (IP) portions of their voice networks by 30 June 2021. STIR/SHAKEN is an industry developed framework National security and competition designed to allow communications service providers to distinguish The Committee for the Assessment of Foreign Participation in the United legitimate calls from illegally spoofed calls so that steps can be taken States Telecommunications Services Sector (known informally as Team to mitigate the illegal calls. Specifically, by 30 June 30 2021, all voice Telecom) reviews national security issues with new license applica- service providers must file certifications with the Commission regarding tions, foreign ownership petitions, and transaction consent applications their efforts to stem the origination of illegal robocalls on their filed with the FCC, while the Committee on Foreign Investment in the networks. The rule changes mean that certain communications service United States (CFIUS), a national inter-agency committee administered providers will be required to either upgrade their non-IP network to by the US Department of the Treasury, reviews transactions involving IP and implement STIR/SHAKEN, or work to develop a non-IP caller acquisitions of control by foreign persons of existing US businesses ID authentication framework and implement other robocall mitigation engaged in interstate commerce, acquisitions by foreign persons of real practices in most cases. estate proximate to sensitive US government facilities, and certain non- The Federal Trade Commission (FTC) also has rules that it applies controlling investments by foreign persons in US businesses engaged to a wide variety of industries, including the communications industry. in critical infrastructure, critical technology, or collection and storage (Indeed, recent litigation in the US Court of Appeals for the Ninth Circuit of sensitive personal information. The FTC and the US Department of has reaffirmed the FTC’s power to oversee certain practices of commu- Justice (DOJ) jointly regulate competition and merger control under US nications companies, even those that the FCC heavily regulates as antitrust laws, as do state attorneys general, under state antitrust laws. common carriers.) For example, the FTC’s Telemarketing Sales Rule, in broad strokes, requires companies to check the National Do Not Call Policy changes registry before engaging in most telemarketing campaigns, requires Federal, state or local authorities can initiate policy changes. When the companies to honour consumer requests to no longer receive tele- FCC sets rules, it overrides any conflicting state or local laws or require- marketing calls from the company, restricts telemarketing calls during ments. The FCC sets rules through a notice-and-comment process. All certain times of day, restricts call abandonment, prohibits abusive final FCC rules are subject to review in federal courts of appeal. State callers, and requires the transmission of non-misleading caller ID PUCs have similar processes for adopting rules, with the jurisdictional information. The FTC’s CAN-SPAM rules, among other things, require limits and processes varying from state to state. Judicial review is

200 Telecoms & Media 2021 © Law Business Research 2021 Harris Wiltshire Grannis LLP United States generally available in the state courts, although issues of federal law with the use of a down-pointing antenna design in the U-NII-1 sub-band can also be reviewed by federal courts in many cases. The FTC can of the 5GHz band. Standard-power outdoor operations in the 6GHz band implement policy changes through rules as well as by prosecuting will be managed by an Automatic Frequency Coordination database. civil suits against unfair trade practices either before the FTC or in the But, importantly, as long as Wi-Fi and other unlicensed devices comply federal courts. State attorneys general similarly can bring civil actions with these rules and operate within these designated bands, they do not that may, in some instances, be creating new policies. require a licence to operate. Note that the FCC allows lower-power unlicensed operations on a co-channel underlay basis in many other bands, Authorisation/licensing regime but these low power levels make the bands inappropriate for Wi-Fi. 2 Describe the authorisation or licensing regime. Wi-Fi continues to grow in importance in the United States. The FCC has stated that consumers receive more data over Wi-Fi than Fixed providers of common-carrier services other than VoIP over licensed cellular networks, and soon Wi-Fi will deliver more data Fixed providers of common-carrier services other than VoIP must to consumers than even wired networks. Consequently, the FCC has register with the FCC and are authorised by a blanket FCC authorisa- undertaken to make additional spectrum bands available for Wi-Fi. For tion to provide interstate domestic services (ie, no prior authorisation example, the FCC: is required) but must obtain affirmative prior authorisation from the • designated additional spectrum in millimetre wave bands for unli- FCC under section 214 of the Communications Act (international section censed use; 214 authorisation) to provide services between US and foreign points – • adopted in 2014 more liberal unlicensed rules in the U-NII-1 sub- whether facilities-based or resale, or whether using undersea cables, band of the 5GHz band, thereby allowing traditional Wi-Fi services domestic or foreign satellites, or cross-border terrestrial facilities – in these frequencies; regardless of whether the traffic originates or terminates in the United • opened in late 2020 portions of the U-NII-4 sub-band of the 5GHz States or both. For intrastate services, a fixed provider must generally band (5850-5895MHz for Wi-Fi through a proceeding exploring how be licensed by the relevant state PUC. PUC processes and require- unlicensed-exempt services can share the band with incumbent ments vary, with procedures less strict for long-distance services and Intelligent Transportation Services (which retain the upper portion more rigorous for local services. The FCC does not limit the number of 5885 – 5925 MHz); of licences for telecommunications service providers. Some state • opened in 2020 the 6GHz band for Wi-Fi and other license-exempt PUCs may refuse to grant operating authority to multiple intrastate technologies through a proceeding exploring how unlicensed local telecommunications providers in rural areas. A fixed provider of services can share the band with fixed point-to-point links and common-carrier services must obtain FCC consent before discontinuing other existing users of the band; and interstate and international services and generally state PUC consent • opened the white spaces between television broadcast channels for before discontinuing intrastate services. unlicensed operation, and has proposed new rules that would allow fixed white-space devices to operate at increased power levels and Public mobile service providers heights as well as a new set of rules to promote the use of white- Public mobile service providers (commercial mobile radio service space devices for precision agriculture and other IoT applications. (CMRS)), including resellers, must register with the FCC but are not required to obtain prior authorisation for domestic service; however, Notably, in 2016 the FCC decided not to open the U-NII-2b sub-band they must obtain international section 214 authorisations to provide of the 5GHz band to Wi-Fi after analysing the potential of sharing with services between US and foreign points even by resale, and appropriate incumbent government operations. The FCC also recently opened the spectrum use authorisation. The FCC must grant terrestrial RF licences 3.6 GHz band (3550-3700 MHz) for a mix of licensed and licensed-by-rule by auction if there are two or more competing, mutually exclusive appli- operations. While the licensed-by-rule operations are not unlicensed or cations. FCC rules do not require CMRS operators to deploy particular governed by Part 15 rules, they are likely to share many characteristics air interface technologies (eg, LTE). Accordingly, and unlike many other with Wi-Fi deployments. jurisdictions, the US authorisation and licensing regime does not distinguish among generations of licensed wireless technologies (eg, 2/3/4G) Interconnected VoIP used by operators, although technical conditions adopted by the FCC Interconnected VoIP (VoIP services that can place calls to and receive may facilitate certain generations of mobile broadband. States cannot calls from the traditional telephone network as part of a single service) regulate the rates or entry of CMRS providers but can regulate other are not subject to prior authorisation. Some states have asserted the terms and conditions. Facilities-based mobile service operators must ability to require prior approval for fixed interconnected VoIP services, obtain licences or leases to use RF spectrum, except where the FCC which is currently being challenged in the courts. Interconnected VoIP rules permit licence-exempt (ie, unlicensed) operation. Public mobile providers must seek prior authorisation from the FCC, however, before service providers are not required to obtain FCC consent to discontinue discontinuing service. domestic services. Non-interconnected VoIP Public Wi-Fi Non-interconnected VoIP (VoIP services that can only send or receive In the United States, Wi-Fi operates on an unlicensed basis under the calls (but not both) from the traditional telephone network) are not Commission’s Part 15 rules. These rules set power levels, out-of-band subject to prior authorisation or discontinuance requirements. emission limits and other technical limits. The FCC designates certain frequency bands where unlicensed devices may operate at higher power Satellite service providers levels. The most important of these bands are the 900MHz, 2.4GHz, 5GHz Satellite service providers must obtain licences to use RF spectrum and and 6GHz bands. The rules for each of these bands, and sometimes their must ensure that their handsets or antennae meet FCC interference sub-bands, differ in terms of power and emission mask, and sometimes requirements. If providing common-carrier services between US and include special requirements. Special requirements include, but are not foreign points, satellite service providers must also obtain international limited to, the use of dynamic frequency selection in the U-NII-2a and section 214 authorisations. They are not subject to state rate or market- U-NII-2c sub-bands of the 5GHz band, and the availability of higher power entry regulation or FCC price regulation. www.lexology.com/gtdt 201 © Law Business Research 2021 United States Harris Wiltshire Grannis LLP

Satellite space stations or aeronautical licence (collectively, RF licence). Section 310 does, Satellite space stations notified to the International Telecommunication however, permit direct and indirect foreign ownership in such licensees, Union by the United States or using US orbital slots, as well as subject to additional requirements: transmit-receive earth stations, must be licensed by the FCC before • under section 310(b)(3), parties to foreign investment that results launch or services commencement, respectively. Receive-only earth in direct foreign ownership of an RF licence in excess of the 20 per stations communicating with US-licensed space stations require cent statutory threshold must first obtain a declaratory ruling from only FCC registration. Earth stations in certain frequency bands are the FCC finding that such foreign ownership would serve the public covered by blanket authorisations (ie, the FCC does not require indi- interest; and vidual licensing or registration). Foreign-licensed satellites may serve • under section 310(b)(4), parties to foreign investment that results US earth stations on a streamlined basis if they appear on the FCC’s in aggregate direct and indirect foreign ownership in a RF licence Permitted Space Station List but may also make an individualised in excess of 25 per cent statutory threshold must first obtain a market access showing in connection with transmissions to and from declaratory ruling finding that such foreign ownership would serve a specific earth station. After finalising new rules in 2017 for non- the public interest. geostationary satellite orbit (NGSO) systems, the FCC has granted licenses for several large proposed NGSO systems. The Commission Regardless of whether the foreign investor would control or not control is also currently considering several other changes to existing satel- the common-carrier RF licence, the FCC presumes that aggregate lite regulations, including streamlining the space station application foreign ownership of up to 100 per cent serves the public interest, a process for CubeSats and other small satellites, as well as consid- presumption that applied only to investors from WTO member countries ering new rules relating to orbital debris, earth stations in motion and before August 2013. other topics. Interplay with national security and trade concerns Undersea cable infrastructure The FCC may nonetheless deny approval if the Executive Branch raises Before installing or operating undersea cable infrastructure in the serious concerns regarding national security, law enforcement, foreign United States or its territories, an operator must first receive a cable policy or trade issues, or if the entry of the foreign investor (or cable landing licence from the FCC, coordinated with the US Department of landing) into the US market presents a risk to competition. In practice, State, under the Cable Landing Licence Act of 1921. For an undersea applications for carrier licences for facilities-based and resale interna- cable to be operated on a common-carrier basis, the operator must tional telecommunications services, common-carrier RF licences, and also apply for and receive an international section 214 authorisation non-common-carrier licences used for mobile or wireless networking from the FCC. services are typically subject to national security reviews by the Team Telecom agencies. These agencies (which also review mergers and Internet services other than VoIP acquisition) often require negotiation of security agreements or assur- The FCC does not require prior authorisations to provide service or ances letters before licensing or transaction consummation. to discontinue service for BIAS. The FCC does not regulate internet services other than VoIP and BIAS. Authorisation timescale Although the FCC has adopted detailed licensing timelines (eg, a 14-day Foreign ownership restrictions – international wireline streamlined review for most international section 214 applications, a The FCC applies a public interest analysis in determining whether to 45-day streamlined review for most cable landing licence applications, allow a foreign investor to enter the US telecommunications market. and a statutory 30-day review for applications involving common-carrier For international telecoms service authorisations (international section wireless, mobile and transmit-receive satellite earth station applica- 214 authorisations), the FCC presumes that the public interest is tions), these are typically suspended in cases involving aggregate served by direct and indirect foreign ownership (up to 100 per cent) in foreign ownership exceeding 10 per cent, as the refers such applica- facilities-based and resale providers of interstate and international tele- tions to Team Telecom for sometimes lengthy national security reviews. communications services, where the investor’s home country is a World Trade Organization (WTO) member, and in undersea cables landing in Licence duration WTO member countries. For investors from non-WTO member countries Licence durations vary by service and infrastructure type. International – and undersea cables landing in non-WTO member countries – the section 214 authorisations have no set term or expiry date. Cable landing FCC does not presume that the public interest is served by direct and licences have a 25-year term. Commercial wireless licences, private indirect foreign ownership (up to 100 per cent). Instead, it will require microwave and industrial wireless licences, and transmit-receive satel- such investors from non-WTO member countries to make a showing lite earth station authorisations generally have 10-year terms. Space whether they have market power in non-WTO member markets and stations are generally authorised for 15-year terms, but direct broad- evaluate whether US carriers or submarine cable operators are experi- cast satellite authorisations are authorised only for 10 years. These encing problems in entering such non-WTO member markets. The FCC licences are generally eligible for extension as long as the licensee has determines an investor’s home market and consequent WTO status by complied with the relevant FCC service rules. Cable systems are gener- applying a principal place-of-business test. ally authorised by local franchising authorities for a set term, subject to renewal. Foreign ownership restrictions – RF licences The United States imposes limitations on both direct and indirect foreign Fees ownership. US WTO commitments reflect these statutory restrictions The FCC assesses application processing fees for new and modified- on foreign ownership. Regardless of WTO status, section 310 of the licence applications involving telecommunications and broadcasting Communications Act prohibits a foreign government, entity organised services and infrastructure, and for applications seeking consent for under foreign law, non-US citizen or representative of a foreign govern- transactions involving transfers or assignments of FCC licences. The ment, or non-US citizen from directly holding a common-carrier RF (for FCC also assesses annual regulatory fees for the providers it regu- terrestrial wireless or microwave, mobile or satellite service) broadcast lates. All of these fees vary by licence and service type; the FCC revises

202 Telecoms & Media 2021 © Law Business Research 2021 Harris Wiltshire Grannis LLP United States application processing fees periodically and regulatory fees annu- under specific technical rules without an individual FCC licence. The ally. The FCC also assesses fees for a variety of federal programmes FCC has also allotted some frequency bands for licensed-light services, involving providers of interstate telecommunications and intercon- where entities can obtain permission to use set frequencies through nected VoIP, including: less onerous processes, such as by registration with the FCC. • federal universal service; The FCC has the authority to reallocate (change the permitted use • relay services for the hearing impaired; or permitted class of user) or reassign (change the entity authorised • numbering administration; and to use particular frequencies in a particular geography) RF spectrum. • number portability. The FCC is more likely to consider such changes when changes in technology or the marketplace render its rules obsolete. The FCC may Non-interconnected VoIP providers are required to pay fees to support also revoke a licence for failure to meet licensee qualification or fitness relay services for the hearing impaired. State and territorial fees and requirements, or for violations of FCC build-out rules. FCC rules specify contributions vary by jurisdiction. the permitted use of some licensed spectrum. However, over the past two decades, the FCC has made spectrum available without detailed use Modification or assignment of licences (including transfers of restrictions in most cases; instead, setting technical rules, but permit- common-carrier authorisation or assets) ting flexible use of the spectrum. This allows licensees to change the FCC procedures and requirements for licence modifications vary signifi- services they provide without seeking prior authorisation from the FCC cantly by licence type and service, and, in some cases, by whether the in most cases. Similarly, FCC rules do not specifically limit the services modification is major or minor. The FCC permits assignments of many provided over most unlicensed bands by an individual user as long as types of licences, including common-carrier authorisations, though it they are consistent with the technical operating rules and do not wilfully distinguishes between a pro forma assignment of a licence or transfer or maliciously interfere with other users. While individual users of an of control of a licensee (where ultimate control of the licence does unlicensed band must accept harmful interference, the FCC has used not change, such as with an internal corporate reorganisation), and its equipment authorisation and enforcement processes to investigate a substantial assignment or transfer of control to an unrelated third and address unlicensed technologies that it believes might under- party. Substantial assignments and transfers of control generally mine an unlicensed band as a whole. The core unlicensed bands are require prior FCC consent, as do any transfers of non-mobile common- located within the 2.4GHz and 5GHz bands. In 2014, the FCC changed carrier assets. Pro forma transfers of common-carrier authorisations its rules to permit outdoor operations and operations with increased and common-carrier RF licences do not require prior FCC consent, but power in the U-NII-1 sub-band of the 5GHz band. In addition, the FCC the FCC must be notified within 30 days of consummation. Pro forma permitted unlicensed operations in the television white spaces, that is, transfers of non-common-carrier RF licences require prior FCC consent. the vacant frequencies between occupied over-the-air broadcast televi- In general, prior FCC approval is required either when the licence or sion channels, as well as in portions of the new 600MHz band that will authorisation itself is transferred to another entity, or when control of be created as a result of the television broadcast incentive auction. FCC the entity holding the licence of authorisation is changing (even if the rules require these white space devices to operate subject to a database licence or authorisation is staying within the same entity). that determines where and when they can transmit to protect licensed operations, including television broadcasters and certain wireless FCC licences and financial security interests microphones. The FCC is currently considering designating additional FCC licences may not be pledged as security for financing purposes. frequencies for unlicensed use, including in portions of the 5GHz band Nevertheless, a lender may take a security interest in the proceeds on a shared basis with incumbents. The FCC has also recently permitted of the sale of an FCC licensee. Lenders are also permitted to take a new commercial uses of the 3.5GHz band on a shared basis with incum- pledge of the shares of a company holding an FCC licence, although bents – including licensed-by-rule uses that are functionally similar to FCC consent must be obtained before a lender consummating any post- unlicensed uses – using a spectrum database approach. In addition, the default transfer of control of an FCC licensee or assignment of an FCC FCC has recently made additional frequencies available for licensed and licence. In structuring arrangements for protection in the event of a unlicensed use in the millimetre wave bands above 24GHz. borrower default or insolvency, lenders, security-interest holders, and The FCC permits spectrum licences to be transferred or assigned, FCC licensees need to be mindful of the FCC’s rules on security interests subject to FCC consent as long as speculation is not the principal purpose and requirements for approval of transfers of control and assignments, of the transaction. In approving any transfer or assignment of spectrum, whether voluntary or involuntary. the FCC considers competition, spectrum aggregation and prior compliance issues. The FCC permits partitioning (assignments of the licence Flexibility in spectrum use in part of the licensed areas) and disaggregation (assignments of some, 3 Do spectrum licences generally specify the permitted use but not all, frequencies in the licensed area) subject to FCC consent. The or is permitted use (fully or partly) unrestricted? Is licensed FCC also permits leasing of RF spectrum, with the nature of the FCC spectrum tradable or assignable? review depending on the nature and duration of the lease.

In addition to any required telecoms services authorisations, facilities- Ex-ante regulatory obligations based wireless service providers must have an RF licence, unless they 4 Which communications markets and segments are subject to operate exclusively in licence-exempt (ie, unlicensed) bands. In most ex-ante regulation? What remedies may be imposed? circumstances, the FCC must grant terrestrial RF licences by auction if there are two or more competing, mutually exclusive applications. Concerning ex-ante economic and competition regulation, although the Before holding an auction, FCC rulemakings establish spectrum blocks FCC requires all interstate and international common carriers to offer to be auctioned, geographic areas covered, licence terms, service just and reasonable rates, terms and conditions, and prohibits unrea- rules including technical and interference-related rules, and network sonable discrimination, in practice these are not significant constraints build-out rules. In some cases, the FCC limits the entities eligible to except for incumbent local exchange carriers. The FCC also has the participate in the auction. Some satellite services do not require an authority to eliminate, or forbear from, any statutory common-carrier auction. In bands designated for licence-exempt use, users can operate requirements that it finds unnecessary. www.lexology.com/gtdt 203 © Law Business Research 2021 United States Harris Wiltshire Grannis LLP

Incumbent local exchange carriers Interconnected VoIP providers Incumbent local exchange carriers (ILECs) generally remain subject to Like non-incumbent local exchange carriers, interconnected VoIP both state and federal tariffing, cost accounting, accounting separation, providers are not subject to economic regulations; however, they discounted mandatory resale, and unbundling requirements, although must comply with significant regulatory requirements, including those unbundling is primarily limited to copper networks. They generally for law enforcement access, emergency calling, universal service face price controls on retail and wholesale rates, although the FCC has funding, disability access, funding of telecommunications services for substantially deregulated rates, terms and conditions for non-switched the deaf, customer privacy, number portability service, discontinuance, special access services in many areas and particularly for packet anti-blocking, rural call completion, outage reporting and some other services such as Ethernet. Specifically, in 2017, the FCC adopted an order reporting requirements. The FCC, however, pre-empted state PUC regu- deregulating most business data services (BDS), also known as special lation of nomadic interconnected VoIP services (those that can be used access, that provides dedicated point-to-point connectivity at guaranteed at more than one site). Some PUCs assert authority to regulate fixed levels of service. The order determined that all packet-based (typically, interconnected VoIP services, but a majority of states do not. Ethernet) BDS services are competitive, at low and high capacity levels, everywhere in the country. Based on this finding, the FCC declined to Non-interconnected VoIP providers establish new rate regulations for Ethernet BDS. The order then broadly Non-interconnected VoIP providers must comply with anti-blocking, deregulated BDS provided over legacy, circuit-based time-division multi- rural call completion, and disability access requirements and pay plexing (TDM) networks, which previously were subject to rate regulation FCC-assessed fees to support telecommunications services for the deaf, in many parts of the country. Concerning middle-mile TDM transport but are not yet subject to the other regulatory requirements for inter- services, the order determined that the market is generally competitive, connected VoIP or common carriers. The FCC is considering whether and eliminated all existing price regulation nationwide. The order took to extend additional regulatory obligations to non-interconnected VoIP, the same approach to high-bandwidth (above 45Mbps) TDM channel including the obligation to contribute to the support of universal service termination services (ie, the last-mile connections between the provid- programmes and for automatic routing and location identification for er’s network and the customer location). For lower-bandwidth (below emergency access (ie, 911) calls. 45Mbps) TDM channel terminations – commonly referred to as DS1 and DS3 services – the order adopted a new two-pronged competitive Broadband internet access service rules market test to determine which US counties are sufficiently competitive In its 2015 Order, the FCC forbore from exercising its full authority to warrant deregulation. This test deems counties competitive if: to impose ex-ante rate regulation on providers of broadband internet • 50 per cent of buildings or cell towers with BDS demand are access services. However, the FCC imposed three bright-line rules on located within half a mile of a building or cell tower served by a BIAS providers as common carriers, prohibiting them from placing competitive provider; or burdens or restrictions on subscriber access to lawful internet • 75 per cent of the census blocks within the county are reported to content. First, BIAS providers may not block subscribers from lawful have broadband availability (including for residential best-efforts internet content, applications, services or non-harmful devices; second, broadband service) from a cable operator. BIAS providers may also not impair or degrade subscribers’ internet access to lawful content, applications, services or use of non-harmful The test produces positive findings of competition for more than 90 per devices; and finally, BIAS providers may not engage in paid prioritisa- cent of counties with BDS demand, resulting in wide-scale deregulation tion – that is, they may not accept payment of any kind in exchange for of DS1s and DS3s. Competitive carriers and other purchasers of BDS fast-lane access to specified internet content, applications, services or have challenged the order in federal court. devices. The agency has also imposed a prophylactic catch-all standard The FCC has also initiated a phased elimination of all inter-carrier preventing broadband providers from unreasonably interfering with compensation for call termination (excluding leases of fixed facilities subscriber access to lawful internet content in ways unforeseen by the to an interconnection point) and has issued a notice of proposed rule- Order’s bright-line rules. The 2015 Order also affirmed and expanded making proposing a unified intercarrier compensation regime based on the transparency requirements the FCC originally imposed on on a bill-and-keep model. In addition to economic regulation, ILECs are providers in 2010. also subject to a variety of security and consumer protection require- In December 2017, the Commission adopted the 2017 Order, which ments, including those for law enforcement access, emergency calls, modified the transparency requirements, but otherwise eliminated the universal service funding, disability access, funding of telecommunica- three bright-line rules against blocking, throttling and paid prioritisation, tions services for the deaf, customer privacy, number portability service, as well as the catch-all standard preventing unreasonable interference. discontinuance, anti-blocking, rural call completion, outage reporting The FCC adopted privacy regulations for BIAS in the autumn of and some other reporting requirements. 2016. However, in April 2017, President Trump signed a Joint Resolution passed by Congress to rescind those rules, at which time BIAS Non-incumbent local exchange carriers providers became subject only to a statutory provision that required Non-incumbent (called competitive) local exchange carriers (CLECs) them to protect customers’ proprietary network information. As a result are not required to file FCC tariffs, although most choose to do so, but of the 2017 Order, this statutory provision no longer applies and BIAS generally are required to file state tariffs. The FCC limits the amounts providers are now subject to FTC privacy oversight. that CLECs can charge for inter-carrier compensation on call origination BIAS providers have obligations to prepare their networks for and termination. They are not subject to cost accounting, separation, lawful intercept requests under the Communications Assistance for Law discounted mandatory resale or unbundling requirements. They are, Enforcement Act. however, subject to a variety of security and consumer protection requirements, including those for law enforcement access, emergency Wireline long distance calling, universal service funding, disability access, funding of telecom- For wireline long-distance service providers, the FCC generally munications services for the deaf, customer privacy, number portability prohibits the filing of tariffs for almost all retail domestic interstate and service, discontinuance, anti-blocking, rural call completion, outage international telecommunications services, except for certain special- reporting and some other reporting requirements. ised situations, and for providers of international telecommunications

204 Telecoms & Media 2021 © Law Business Research 2021 Harris Wiltshire Grannis LLP United States services regulated as dominant (ie, having market power) on particular first phase of support to bring fixed voice and broadband services to routes to particular foreign countries. Long-distance service providers areas that lack broadband of at least 10Mbps/1Mbps. Carriers that are remain subject to customer protection requirements similar to those eligible to receive high-cost universal service support must also provide applicable to competitive local exchange carriers. State PUCs typically services to low-income consumers, although some carriers receive require tariffing of intrastate long-distance services. The US Congress subsidies only for serving low-income consumers. recently passed the Improving Rural Call Quality and Reliability Act The federal USF is financed by an assessment of all end-user of 2017 to address the persistent problems associated with termi- interstate and international telecommunications revenues earned by nating long-distance calls to rural areas. Under this legislation, the telecommunications carriers and interconnected VoIP providers. The FCC adopted an order requiring all intermediate service providers to FCC recalculates the assessment rate quarterly; for the second quarter register with a newly established intermediate provider registry and of 2021, the assessment rate is at 33.4 per cent of interstate and interna- covered providers (ie, the provider serving the end user) to use only tional telecommunications revenues. Internet access revenues currently registered intermediate providers in the call-routing process. These are not subject to USF assessments. Determining which services are rules apply to all carriers providing voice services to and from a NANP required to contribute directly and when is extremely complex. telephone number. In early 2019, the FCC established a new Fraud Division within its Enforcement Bureau to combat waste, fraud and abuse within the Public mobile services supported programmes. Public mobile service providers (ie, CMRS) are not subject to ex-ante Many states also require providers of intrastate telecommunica- economic regulation by either the FCC or state PUCs. They are not tions to contribute to state universal service programmes, and some subject to price controls, tariffing, cost accounting, separations, resale states require interconnected VoIP providers to contribute. Nearly all or domestic discontinuance requirements. Voice roaming rates and states assess contribution requirements based on provider revenue, but conditions must be just, reasonable and non-discriminatory, and CMRS a few states have recently adopted connection-based revenue require- providers must negotiate commercially reasonable data roaming ments. These new rules are being challenged in court. agreements with other carriers, subject to certain limitations regarding technical compatibility and feasibility. Mobile service providers must Number allocation and portability also ensure that their handsets and base stations meet FCC rules 7 Describe the number allocation scheme and number on topics such as maximum power, interference and spectral masks, portability regime in your jurisdiction. antenna design and directionality, human radiation exposure and disabilities access, including technical hearing aid compatibility require- The United States is one of 20 countries that participate in the North ments. FCC rules require testing and certification of RF equipment. American Numbering Plan, which uses the +1 country code. Within the Moreover, in December 2017, the Commission revised, but did not elimi- United States, the FCC has exclusive authority over numbers; it has dele- nate, BIAS transparency obligations. These revised rules will apply to gated certain management functions to the states. The FCC contracts mobile as well as fixed BIAS. out the day-to-day management of the US portion of the North American Numbering Plan; Neustar, Inc currently serves as the North American Structural or functional separation Numbering Plan administrator. Providers of local telecommunications 5 Is there a legal basis for requiring structural or functional services, including mobile wireless providers, that are authorised to separation between an operator’s network and service provide service in a particular geographic area apply to the Administrator activities? Has structural or functional separation been for numbers associated with that area, typically in contiguous blocks of introduced or is it being contemplated? 1,000 (eg, NPA-NXX-3000 to NPA-NXX-3999). Providers of interconnected VoIP service may also apply for numbers after obtaining authorisation No, the United States does not require carriers to maintain separate from the FCC. Fixed and mobile common carriers and interconnected wholesale network and retail-service subsidiaries. In some cases, the VoIP providers pay fees to support numbering administration. FCC or state PUCs require a separation among service activities (eg, Numbers for toll-free calling are managed separately by Somos, a US carrier affiliated with a carrier with market power in a foreign Inc, a private company, on designation by the FCC. market must provide US-originating or terminating services to that The FCC requires fixed and mobile common carriers and inter- foreign market through a subsidiary separate from the foreign carrier). connected VoIP providers to permit number porting within the same geographic area. All providers of telecommunications services and Universal service obligations and financing interconnected VoIP must pay fees to support number portability admin- 6 Outline any universal service obligations. How is provision of istration. These fees vary by region. The US number portability system these services financed? does not currently permit nationwide number portability, although a provider that operates in all seven number portability regions can effec- Incumbent local exchange carriers generally have state-imposed tively create the ability for its customers to port numbers anywhere in universal service obligations to meet all reasonable requests for service the United States. within their service area (carrier-of-last-resort obligations). Some cable companies also have requirements in franchise agreements with local Customer terms and conditions or state governments to build out their network. 8 Are customer terms and conditions in the communications The federal Universal Service Fund (USF) supports the provi- sector subject to specific rules? sion of telecommunications services in high-cost areas, to low-income consumers, rural healthcare providers, and schools and libraries. The States regulate customer terms and conditions for intrastate, including FCC sets voice and broadband performance and service requirements local, services, frequently with advance filing or approval requirements for carriers that choose to receive explicit universal service funding for through tariffs. The FCC does not require the advance filing of customer high-cost areas. The FCC uses reverse auctions to distribute universal terms and conditions for any interstate services, other than for local service support to eligible carriers. In the most recent auction for the services provided by incumbent local exchange carriers. All wireline Rural Development Opportunities Fund, it awarded US$16 billion in the local carriers can advance file, through tariffs, customer terms and www.lexology.com/gtdt 205 © Law Business Research 2021 United States Harris Wiltshire Grannis LLP

conditions for interstate services, although CLECs are not required to On 1 October 2019, the DC Circuit issued its long-awaited decision do so. Long-distance carriers are not permitted to tariff customer terms in Mozilla v FCC, largely upholding the FCC’s repeal of the 2015 net and conditions. Both the FCC and state PUCs generally require terms neutrality rules but striking down the agency’s attempt to pre-empt and conditions that are reasonable and non-misleading. state and local neutrality laws. Among its key decisions, the court For non-common-carrier services and prepaid phone cards that upheld as reasonable the FCC’s: are sold and distributed by non-carriers, the FTC has taken the posi- • reclassification of broadband as a Title I information service; and tion that it has jurisdiction to regulate misleading or unfair terms and • classification of mobile broadband as a ‘private mobile service’ conditions. The states’ attorneys general also police false, misleading or exempt from Title II common-carriage regulation. unfair terms and conditions. Neither the FTC nor state attorneys general requires advance filing or approval. The DC Circuit also upheld the FCC’s conclusion that section 706 of the Communications Act is not an independent grant of regulatory authority Net neutrality for issuing net neutrality rules. The DC Circuit remanded questions 9 Are there limits on an internet service provider’s freedom to back to the FCC to address the repeal’s effects on public safety, pole control or prioritise the type or source of data that it delivers? attachments, and the FCC’s Lifeline programme. The decision leaves the Are there any other specific regulations or guidelines on net FCC’s rules in place while the FCC reconsiders those issues. Finally, the neutrality? DC Circuit vacated the 2018 Order’s pre-emption of ‘any state or local requirements that are inconsistent with [its] deregulatory approach’ on In 2010, the FCC imposed three net neutrality obligations on mass- grounds that the FCC failed to establish legal authority for such pre- market broadband ISPs: emption, stating that the FCC cannot pre-empt where it lacks authority • transparency; to regulate. • a prohibition on blocking; and The court’s ruling frees ISPs from previous restrictions on the • a prohibition on unreasonable discrimination. blocking, throttling, or paid prioritisation of online content. By striking down the FCC’s attempt at wholesale pre-emption, however, the court A reviewing court vacated the prohibitions on blocking and unreasonable cleared the way for states to pass and enforce more stringent net discrimination in January 2014. However, in 2015, the FCC reinstituted neutrality rules, which will likely face state-by-state legal challenges. and expanded on the vacated rules, which it accomplished by classifying broadband internet access carriers as telecommunications providers. Platform regulation The 2015 Order established prohibitions on blocking, throttling and paid 10 Is there specific legislation or regulation in place, and have prioritisation, enhanced carriers’ existing transparency obligations and there been any enforcement initiatives relating to digital made all rules governing the openness of the internet apply uniformly platforms? to both fixed and mobile broadband internet access devices. The rules were challenged in court and upheld in their entirety by the DC Circuit The FCC does not regulate internet-based services such as search, in June 2016. social media and news services. Those services may be subject to other In December 2017, the Commission adopted a new order reversing, generally applicable laws, such as laws against unfair or deceptive in nearly all respects, the 2015 Order. In particular, the FCC reclassi- marketing. fied broadband ISPs as ‘information service’ providers rather than ‘telecommunications providers’ and eliminated the net neutrality rules Next-Generation-Access (NGA) networks against blocking, throttling, paid prioritisation and unreasonable inter- 11 Are there specific regulatory obligations applicable to ference. BIAS providers are now subject only to a modified version of NGA networks? Is there a government financial scheme to the FCC’s transparency rule. Under that rule, broadband ISPs must promote basic broadband or NGA broadband penetration? publicly disclose accurate information regarding network management practices, including whether they are engaging in blocking, throttling or Under its 2015 Order, the FCC treated BIAS, including traffic exchange paid prioritisation practices. They must also disclose certain network arrangements, as ‘telecommunications service’ subject to its regulatory performance and commercial terms governing their broadband internet authority over common carriers. The FCC did not impose specific rules access services. Beyond that, broadband internet service providers governing internet backbone or traffic exchange but asserted authority (ISP) will be governed by existing general antitrust and consumer to hear complaints of unjust, unreasonable or unreasonably discrimina- protection law. tory traffic exchange practices by BIAS providers. In December 2017, it In the 2017 Order, the FCC stated that it was pre-empting any reversed itself and the FCC adopted the 2017 Order, which among other state or local measures inconsistent with its net neutrality approach things, disclaimed FCC jurisdiction over internet traffic exchange prac- (ie, precluding states or localities from adopting net neutrality rules). tices. The FCC also requires internet access networks to comply with Notwithstanding that language, in the wake of the 2017 Order’s adop- surveillance and law-enforcement assistance requirements. tion, many states have sought to put state net neutrality regulations The FCC has adopted some measures to address the transition in place. The governors of numerous states signed executive orders from copper-based phone networks to fibre, intended to encourage stating that a broadband provider that has a government contract with incumbent carriers in upgrading their networks. For example, the FCC the state must not block, throttle or degrade internet content and must eliminated prohibitions that previously prohibited incumbent carriers not engage in paid prioritisation, including in some cases a prohibition from disclosing planned network changes to their affiliates before on requiring consumers to pay different rates to access specific kinds informing the public. The FCC also eased requirements on incumbent of content or applications online. Other states adopted legislation to carriers to provide prior notice before retiring copper facilities. support some form of net neutrality protection for their consumers. The FCC has also modernised all of its universal service support More than 20 state attorneys general offices, several online companies programmes to support broadband services (the high-cost support and several public interest groups challenged the 2017 Order in court. programme, the schools and libraries programme, the rural healthcare Those lawsuits were consolidated in the US Court of Appeals for the programme and the low-income programme). Its programmes in total DC Circuit. disburse approximately US$9 billion annually.

Data protection previously collected, without obtaining opt-in customer consent) or 12 Is there a specific data protection regime applicable to the deceptive (eg, if it materially conflicts with implicit or explicit statements communications sector? the company made about its data protection practices). A small number of states and municipalities have laws that specifi- Limits on communications companies’ use and disclosure of cally address the data protection practices of communications providers. personally identifiable information to non-law-enforcement entities After Congress’s rescission of the FCC’s broadband privacy rules, many Under the Electronic Communications Privacy Act (ECPA) and the state legislatures have considered legislation requiring broadband Communications Assistance for Law Enforcement Act (CALEA), commu- providers to obtain customer consent to use or disclose personally iden- nications companies cannot as a general rule disclose the contents of tifiable information to third parties for non-service-related purposes. communications to anyone other than a party to the communication and States and municipalities also have generally applicable data protec- are limited in their ability to regularly monitor the contents of commu- tion rules that may apply to communications providers. In particular, nications occurring on the carrier’s network. Third parties who are not California has extensive regulations dealing with privacy notices for law enforcement or vendors working for the carrier typically cannot be online services and the ability for California residents to obtain infor- given access to communications contents. mation about whether their information is provided to third parties for The FCC requires companies offering telephone or interconnected direct marketing purposes. VoIP services to offer special protections to a category of customer data known as customer proprietary network information (CPNI). Law enforcement access to data CPNI includes information about a customer’s use of telecommunica- The United States has specific data protection regulations dealing with tions services, such as the numbers the customer called, how long the content of communications, including emails, text messages and each conversation lasted and certain billing information. A customer’s calls. Under ECPA and CALEA, communications companies cannot turn name, address, social security number, birth date and many other types over the content of communications to a law enforcement entity without of personal information are not CPNI. In January 2019, allegations a valid court order, absent an emergency or other special circumstance. that AT&T, Sprint and T-Mobile were selling customers’ location data The type of court order necessary depends on several different factors, prompted congressional calls for an FCC investigation – calls that were including whether the communications will be intercepted in real-time met with apparent FCC indifference. It is unclear at this time whether or whether law enforcement will access the contents of a previously the FCC will undertake such an investigation or take other action. stored communication. Statutes differ on whether consumers must Providers must take all reasonable measures to discover and be notified and allowed to challenge the disclosure. ECPA gives law protect against attempts to gain unauthorised access to CPNI and enforcement the ability to require communications providers to properly authenticate a customer’s identity before complying with a retain communications in their possession pending a court order. The request that would give the customer access to his or her own CPNI. Cybersecurity Information Sharing Act (CISA) also allows companies to Telecommunications carriers must also provide customers with notice voluntarily share certain information with the government regarding related to the company’s CPNI practices, seek customer consent before cybersecurity threats. using CPNI to engage in certain activities, retain records related to CPNI Federal regulations require each telecommunications common access and report certain information related to CPNI to the FCC. carrier that offers or bills toll telephone service to retain billing-record Federal oversight of phone and iVoIP companies’ treatment of data for a period of 18 months. personally identifiable information that does not qualify as CPNI is Although the circumstances in which disclosure is allowed are some- unclear. Under the prior administration, the FCC took the position what limited, CALEA requires telecommunications providers (including (announced in October 2014) that a telecommunications provider’s interconnected VoIP providers), fixed broadband service providers, failure to protect data falling outside the definition of CPNI can violate manufacturers of telecommunications transmission and switching the Communications Act. Specifically, the FCC stated that a customer’s equipment, and providers of support services (ie, products, software, or name, address, social security number, date of birth and other types services used by a telecommunications carrier for the internal signalling of personally identifiable information that a carrier collects when or switching functions of its telecommunications network) to provide the providing service qualify as customer proprietary information (CPI). capacity to allow properly authorised law enforcement officials to inter- The FCC stated that it expects telecommunications carriers to employ cept communications and obtain call-identifying information from their adequate data security to protect CPI, avoid implicit and explicit misrep- customers, as well as the capacity to meet the surveillance needs of resentations regarding the level of data security provided, and notify properly authorised law enforcement officials. Under a court order or customers potentially affected by a data security breach. Whether the other lawful authorisation, carriers must be able to: FCC intends to take the same approach under its current leadership – • expeditiously isolate all wire and electronic communications of a and whether it has the continued power to do so after Congressional target transmitted by the carrier within its service area; action overturning an FCC order that touched on the FCC’s treatment of • expeditiously isolate call-identifying information of a target; CPI – remains unclear at the time of writing. • provide intercepted communications and call-identifying informa- The FTC oversees the treatment of personally identifiable information to law enforcement; and tion by companies, except in their provision of common carrier services. • carry out intercepts unobtrusively, so targets are not made aware For example, in the wake of the reclassification of broadband internet of the electronic surveillance, and in a manner that does not access service as an ‘information service’, the FTC oversees compa- compromise the privacy and security of other communications. nies’ data protection practices concerning data collected from providing broadband, whereas the FCC continues to oversee companies’ data CALEA does not require telecommunications providers to decrypt protection practices concerning data collected from providing telephone communications unless the carrier provided the encryption and has the service (under the CPNI and possibly CPI rules). The FTC does not have information necessary to perform the decryption. set rules regarding data protection. Instead, it takes a case-by-case Failure to comply with CALEA obligations can result in civil penal- approach, evaluating whether a company’s treatment or protection of ties. The attorney general may enforce these obligations by seeking personally identifiable information is unfair (eg, if the company retro- an order from a federal district court. Violations of ECPA can result in actively applies new data protection practices to data the company criminal penalties. www.lexology.com/gtdt 207 © Law Business Research 2021 United States Harris Wiltshire Grannis LLP

Cybersecurity on this issue shortly. In one high-profile case, LexisNexis settled a 13 Is there specific legislation or regulation in place concerning class action FCRA lawsuit – which alleged that identity reports it sold cybersecurity or network security in your jurisdiction? for locating people and assets, authenticating identities and verifying credentials in the debt collection context were subject to the FCRA – for In February 2014, the National Telecommunications and Information US$13.5 million in damages, US$5.5 million in fees and an agreement Administration (NTIA) and the National Institute of Standards and to restructure the identity report programme at issue so that it would Technology (NIST) released their Framework for Improving Critical comply with the FCRA. And in a January 2016 staff report on big data, the Infrastructure Cybersecurity, a set of industry best practices to reduce FTC took the position that data brokers who advertise their services ‘for cyber risks to critical infrastructure, including telecommunications eligibility purposes’ and companies that use non-traditional predictors services; as of this writing, NTIA and NIST are engaging with key stake- (such as a consumer’s postcode, social media usage or shopping history) holders to update the Framework. The FCC-convened Communications to create reports of consumers’ creditworthiness are particularly likely Security, Reliability, and Interoperability Council (CSRIC) provides guid- to fall under the FCRA (as are companies that use such reports). ance on how the NIST framework applies in the telecommunications When a company involved in big data qualifies as a CRA, it must: context and offers recommendations. Compliance with the Framework • only include accurate, current and complete data in consumer and CSRIC best practices is voluntary. reports, including in most cases deleting information on account Under CALEA, telecommunications providers (including intercon- data after seven years and bankruptcies after 10 years; nected VoIP providers) must maintain and file with the FCC System • provide consumers with access to and the opportunity to dispute Security and Integrity plans, detailing how the provider ensures proper or correct any errors in a consumer report, as well as general government access to communications content and call identifying infor- consumer assistance under FTC rules; mation, and protects such information from unauthorised disclosure. • provide consumer reports only to entities that have a permissible Neither CALEA nor the FCC mandate the use of any particular technical purpose under the FCRA, including for the extension of credit standard to ensure law enforcement access or communications security. applied for by a consumer, the review or collection of a consumer’s CISA limits the liability of companies for sharing information with account, insurance underwriting, employment purposes where other private entities and with the government related to cybersecurity consumer permission is obtained under stringent rules, where threats. CISA does not impose a sharing mandate and instead estab- there is a legitimate business need in connection with a busi- lishes a voluntary sharing framework; in addition, it explicitly authorises ness transaction initiated by the consumer, and in certain legal private entities to monitor their networks for cybersecurity threats, to actions; and operate defensive measures to protect their networks from cybersecu- • keep records regarding the release of consumer reports. rity threats and to share and receive cybersecurity threat information. The Team Telecom agencies also often impose cybersecurity- Users of consumer reports must: related conditions in security agreements and assurances letters as • provide notice to consumers when most types of third-party data conditions for the grant of FCC licences or consents for mergers and are used to make adverse decisions about them; acquisitions. • only use consumer reports for a permissible purpose and so certify; and Big data • provide certain consumer disclosures and keep records related 14 Is there specific legislation or regulation in place, and have to making offers to a list of pre-screened consumers obtained there been any enforcement initiatives in your jurisdiction, from a CRA. addressing the legal challenges raised by big data? Companies that provide information to CRAs for use in consumer In the United States, the Fair Credit Reporting Act (FCRA) is the main reports must take certain steps to ensure the information provided is law dealing specifically with amassing and using high-volume datasets accurate and complete. of personally identifiable information (PII), but the law has limited reach. Additionally, some companies have faced questions about whether The FCRA only applies to consumer reporting agencies (CRAs) and enti- their use of data has a discriminatory impact on protected classes of ties that obtain information from or furnish information to CRAs. Credit people. Under Title VII of the Civil Rights Act of 1965 and other statutes, reporting agencies, such as Transunion, Equifax and Experian, and companies could face a civil action when their facially neutral policies employment and tenant background screening companies are the main or practices have a disproportionately adverse effect on a protected CRAs. However, a 2016 report from the FTC and several commentators class. The Equal Credit Opportunity Act (ECOA) bans companies that have suggested that the definition of a CRA is sufficiently broad to cover regularly extend credit from using information about consumers’ race, data brokers who: colour, religion, national origin, sex, marital status, age or receipt of • compile PII that bears ‘on a consumer’s creditworthiness, credit public assistance when making credit decisions. The 2016 FTC big data standing, credit capacity, character, general reputation, personal report indicated that targeting credit advertisements in a way that had characteristics, or mode of living’; and an ‘unjustified’ disparate impact on a protected class could potentially • provide these compilations (known as consumer reports) to buyers violate the ECOA. Whether courts would take a similar view of the ECOA’s who use them (or can be expected to use them) in making credit application to big data remains to be seen. The 2016 FTC big data report determinations or for employment, insurance, licensing and other also indicated that selling analytics products knowing that they would business purposes. be used for a fraudulent or discriminatory purpose may also constitute a violation of the FTC Act. In May 2016, the Obama Administration issued Importantly, the FCRA does not generally apply to reports that are ‘Big Data: A Report on Algorithmic Systems, Opportunity, and Civil used or can be expected to be used only for marketing and general risk Rights’, which noted some concerns with the use of big data. Some of management purposes. the companies faced with allegations of discrimination have voluntarily There have been few big data-related cases alleging violations addressed these issues in a way that has helped them avoid litigation. of the FCRA, so the precise reach of the FCRA in this context remains Generally, applicable privacy and data security rules will also unknown. Litigation related to the Equifax data breach may shed light apply to most companies involved in big data. The FTC Act bans unfair

208 Telecoms & Media 2021 © Law Business Research 2021 Harris Wiltshire Grannis LLP United States or deceptive acts in interstate commerce by non-common carriers, schools and libraries programme, the rural healthcare programme and including misrepresenting how PII will be collected and used, misrep- the low-income programme). The Republican-led Congress continues to resenting how PII will be protected, and failing to maintain reasonable consider a fundamental update of underlying telecommunications laws. security over PII. Several states have additional requirements regarding At the time of writing, there has been little movement on such an update. privacy disclosures, cybersecurity, and notification to consumers in the event of a data breach. Companies must comply with myriad require- Spectrum or wireless ments under the Children’s Online Privacy Protection Act before The FCC and US government continue to attempt to find spectrum knowingly collecting personally identifiable information from children to make available for both licenced and licence-exempt services, aged under 13 via an online service or collecting personally identifi- particularly mobile broadband. There are several important ongoing able information from an online service targeted at children aged proceedings on this topic. under 13. The United States also has several sector-specific privacy Several years ago, the FCC concluded an incentive auction that laws that can impact companies compiling information from certain allowed television broadcasters to relinquish spectrum rights in the healthcare-related companies, financial institutions and communica- 600MHz band in exchange for auction revenues (the reverse auction) tions companies. and assign the returned spectrum for flexible use (the forward auction) US law does not require online companies to honour consumers’ by licensed and unlicensed networks. Because there are fewer further do-not-track settings. However, California law typically requires entities opportunities for commercial access to spectrum below 1GHz, the FCC operating online to state how the entity treats do-not-track requests. has also adopted spectrum-aggregation rules to address the amount California also recently passed the California Consumer Privacy of such spectrum that any single provider can hold. This auction Act of 2018. Like the EU General Data Protection Regulation, the new produced 84MHz of spectrum for licensed mobile broadband services. law gives Californians the right to know what personal information a The process of repacking the remaining broadcasters and opening this business has collected about them, the source of the information, how band for auction winners has been a major endeavour of the FCC over the business uses the information, and to whom the business sells the the last several years. information. Beginning last year, Californians can demand the deletion In 2020, the FCC held an auction for up to 40 MHz within 3550-3560 of their data and opt out of the sale of their data to third parties. It is MHz, a range of mid-band spectrum that governments around the world expected that this new law will spur other states to take similar action are prioritizing for 5G (the 3.5GHz band). The licenses allow commercial and to increase pressure for action at the federal level. users to share the 3.5GHz band with government and non-government incumbents. The FCC adopted an innovative three-tier approach that Data localisation would make incumbents primary, a set of licensees that acquire licences 15 Are there any laws or regulations that require data to be secondary exclusive and a tertiary tier of licensed-by-rule users (similar stored locally in the jurisdiction? to traditional unlicensed operations) across the 3550-3700MHz range. The FCC has also opened a proceeding to examine the possibility of The United States has not adopted laws or regulations requiring that commercial operations in the below adjacent band of 3.1 – 3.55GHz, and data be stored locally in the United States. Nevertheless, in some cases, to date has proposed rules for commercial operations in the immediate Team Telecom imposes data localisation requirements in security agree- lower adjacent 100 MHz of the band. Auction of 3.45-3.55GHz is planned ments and assurances letters as a condition for the grant of a licence or for October 2021. consent for a merger or acquisition. In such cases, Team Telecom may The FCC has also re-organised the 2.5GHz band from an educa- require that such data be stored only in the United States, or that copies tional broadband band to general commercial use. Auctions are planned of such data be made available in the United States. Such requirements in the near term for 2.5GHz, with a priority window established for are controversial, as they extend extraterritorially the reach of US law Tribal entities. enforcement jurisdiction. The FCC reallocated the UNII-4 sub-band of the 5GHz band, where The United States’ lack of data localisation requirements has Intelligent Transportation Services (ITS) is the incumbent licensee, to driven US law enforcement to take an aggressive approach to their allow unlicensed devices to operate in the lower 45MHz (5850-5885MHz) ability to access data that allegedly relates to unlawful activity occur- and ITS to remain in the upper 30MHz (5885-5925MHz), but to operate ring in the United States but is stored in a different country. In 2018, with 3GPP’s Cellular-Vehicle-to-Everything (C-V2X) technology. the Supreme Court heard an argument from Microsoft, challenging The FCC recently permitted additional terrestrial licensed and unli- the federal government’s position on the extraterritorial reach of US censed wireless operation in the millimetre wave bands above 24GHz. warrants. That case was dismissed as moot following the passage of It auctioned spectrum in the 28GHz band and 24GHz band in November the Clarifying Lawful Overseas Use of Data (CLOUD) Act. The CLOUD 2018 and auctioned spectrum in the 37, 39 and 47 GHz bands in the Act amends the Stored Communications Act of 1986 to allow US law second half of 2019. The new expanded unlicensed millimetre wave enforcement to compel (via warrant or subpoena) US-based technology band of 57-71 GHz (the 60 GHz band) is already standardising through companies to provide data stored on servers regardless of whether the private standards bodies. data are stored in the US or on foreign soil. In 2020, the FCC completed proceedings on: transitioning 3.7-3.98 GHz within the range called the C-band (previously used for FSS earth Key trends and expected changes stations and fixed microwave stations) to terrestrial fixed and mobile 16 Summarise the key emerging trends and hot topics in broadband. The 4.0-4.2GHz of the C-band will continue to be allocated communications regulation in your jurisdiction. to satellite services. The subsequent FCC auction, ending in early 2021, resulted in record proceeds of over US$80 billion. IP transition or convergence In 2019, the FCC allocated approximately 21 GHz for licence- Both Congress and the FCC continue to tackle how best to update US exempt uses above 95 GHz (116-123 GHz, 174.8-182GHz, 185-190GHz, telecommunications laws in light of the technological changes and and 244-246GHz) under technical rules similar to those applicable to service convergence brought about by digitisation and IP networks. The licence-exempt devices in the 60GHz band. The proceeding remains FCC has modernised all of its universal service support programmes open for possible additional allocations above 95GHz for commercial to support broadband services (the high-cost support programme, the uses under both a licenced and licence-exempt approach. www.lexology.com/gtdt 209 © Law Business Research 2021 United States Harris Wiltshire Grannis LLP

Finally, the US Congress passed legislation in 2018 requiring the FCC • FIRRMA tasks CFIUS with defining ‘foreign person’ in terms of and the National Telecommunications and Information Administration to connections to a foreign country or government and potential identify 255MHz of additional spectrum for mobile and fixed wireless effects on US national security; and broadband use, including not less than 100MHz of spectrum below 6GHz • CFIUS may consider whether a covered transaction involves a for exclusively licensed commercial mobile use (subject to potential country of special concern that has demonstrated or declared the continued use by federal entities) and not less than 100MHz of spectrum strategic goal of acquiring a type of critical technology or critical below 8GHz for unlicensed operations. The FCC referred to that legisla- infrastructure that would affect US leadership in areas related to tion to justify its actions on making 3.45-3.55 GHz, 3.7-3.98 GHz and 6 GHz national security. available for commercial use, on a licenced and licence-exempt basis, respectively. Disabilities access Following a major expansion in 2010 of disabilities access require- Public mobile service competition ments to non-interconnected as well as interconnected VoIP, electronic When the US DOJ challenged the AT&T/T-Mobile merger, it strongly messaging and interactive video conferencing, and software and equip- suggested that it was necessary to maintain at least four national public ment (including internet browsers) used to access such services, the FCC mobile service providers. Whether this is true, and, if so, what regula- began to receive, investigate and adjudicate complaints. In December tory steps are necessary to secure it, will remain issues, before both the 2016, the FCC approved rules to enable carriers and device manu- FCC and the DOJ antitrust division. The FCC, however, has taken steps facturers to satisfy certain disabilities access requirements through to strengthen its rules limiting data roaming rates, and has conditionally the use of IP-based real-time text technology rather than traditional reserved some spectrum below 1GHz for providers other than the two teletypewriter equipment. Companies have also faced growing pres- largest nationwide mobile wireless carriers. sure, including consumer lawsuits brought under the Americans with Disabilities Act, to make their websites and mobile applications compat- Delayed market entry owing to national security reviews ible with screen-reader technology and meet other accessibility-related On 4 April 2020, President Trump signed Executive Order 13913 formal- requirements. Courts have taken differing views on the application of the ising and modifying the Team Telecom process. The Executive Order Americans with Disabilities Act to websites and apps. codifies many aspects of the prior Team Telecom processes, including a continuing focus on foreign investment. It concentrates authority in Initiatives to prevent illegal calls the hands of the DOJ as Committee Chair at the expense of the other In the past three years, the FCC has focused heavily on the prevention Committee Members (the US Departments of Defence and Homeland of illegal calls, such as calls that are abusive or fraudulent, autodialled Security). It includes majority vote decision-making rules that reduce the or pre-recorded calls made without the necessary level of consent and risk of stalemated reviews but also increase the risk of recommenda- calls made to consumers who are on a legally mandated do-not-call list. tions to block the grant of new FCC licences and to revoke existing ones. The FCC has adopted limited changes to its rules about call blocking to The Executive Order provides for 120-day initial reviews following refer- encourage providers to block presumptively illegal calls in some circum- rals from the FCC, assessment of questionnaire responses, and an initial stances, to share information necessary to identify illegal calls and to determination that the review record is complete. It may also conduct a take other measures to prevent illegal calls from reaching consumers. In further 90-day secondary assessment in cases where standard mitigation particular, in the reassigned number context, the FCC has: would not adequately protect US national security and law enforcement • established a single, comprehensive database of reassigned number interests. Those time frames include significant discretion and loopholes information from each provider that obtains NANP US geographic that could limit their effectiveness in producing timely outcomes. numbers, including toll-free numbers; and The FCC also finally adopted new rules clarifying its interactions • adopted a safe harbour from TCPA liability for those callers that with Team Telecom and formalizing its practice of automatically refer- choose to use the database to learn if a number has been reassigned. ring to Team Telecom any application involving an international section 214 authorisation, cable landing licence, or section 310 foreign ownership The FCC also continues to consider other methods of stopping unlawful petition with a reportable 10 per cent, or greater, direct or indirect foreign calls, including requiring communications service providers to implement owner, although the FCC retains the discretion to make referrals in other the STIR/SHAKEN caller ID authentication framework in the portions of cases. The FCC has also initiated a proceeding to standardize questions to their voice networks or work to develop a non-IP caller ID authentication be answered by applicants in the initial phases of Team Telecom reviews. framework and implement other robocall mitigation practices. Team Telecom reviews and conditions can affect corporate governance, personnel and other operational matters, with investments MEDIA from particular countries (eg, China and Russia) and by sovereign wealth funds subject to considerable scrutiny. Although the supply Regulatory and institutional structure arrangements do not require direct US government approval, the US 17 Summarise the regulatory framework for the media sector in government can nevertheless foreclose supply opportunities indirectly your jurisdiction. by imposing market-entry conditions on investors. In rare circumstances, the US government has sought to pressure US carriers in procurements The United States regulates the delivery of television and audio radio unrelated to foreign-investment transactions, particularly where US signals differently depending on how those signals reach the end user. government agencies are customers of the carriers. Broadcast television in the United States refers only to the delivery of In 2018, the US Congress passed the Foreign Investment Risk signals over the air directly to a television. Cable television refers to the Review Modernization Act of 2018 (FIRRMA) to expand further the CFIUS delivery of signals to a television through a terrestrial cable system with review process over transactions involving real estate, critical infra- distinct rules from those governing over-the-air television. Direct-to- structure, critical technology, or sensitive information of US persons home satellite refers to the delivery of signals to a television through and to reform US export controls. In contrast to earlier versions of the the use of a satellite antenna and is subject to yet another set of rules. legislation, FIRRMA does not expressly address countries of special The Federal Communications Commission (FCC) also classifies cable, concern; however: satellite and similar providers as multichannel video programming

210 Telecoms & Media 2021 © Law Business Research 2021 Harris Wiltshire Grannis LLP United States distributors (MVPDs) and subjects them as such to additional rules. Over- Neither the FCC nor state or local franchising authorities impose the-top (OTT) delivery refers to the delivery of video programming over foreign-ownership or other ownership restrictions on cable networks, the internet. On the audio side, broadcast radio refers to the delivery of although the transfer and assignment of cable franchises almost always audio signals over the air, while satellite digital audio radio service refers requires the prior consent of the franchising authority (but not the FCC). to the delivery of audio signals over satellite. Our responses to questions The FCC restricts the acquisition of local exchange carriers by cable about ‘broadcasting’ in this chapter refer to all of these types of delivery. operators in the same area and vice versa. Television stations now transmit in a digital format called ATSC 1.0. US World Trade Organization (WTO) commitments in basic tele- The FCC recently granted them authority to transmit in a new digital communications reflect US statutory restrictions on foreign ownership format, ATSC 3.0, which will permit them much greater flexibility in the of broadcast licensees. In its commitments, the United States also took content and services they provide. Television stations will thus have article II (most favoured nation) exemptions for one-way satellite trans- considerable leeway to offer additional services subject to little or no missions of direct-to-home and direct-broadcast satellite services and regulation. digital audio radio services. Regardless of WTO status, section 310 of OTT video and audio delivery has not been definitively addressed the Communications Act prohibits a foreign government, corporation by the FCC, and efforts for it to do so appear stalled. The FCC previ- organised under foreign law, non-US citizen or representative of a ously proposed to classify such providers as MVPDs, subjecting them to foreign government or non-US citizen from directly holding a broad- some (but not all) rules that now apply to cable and satellite providers. cast licence. Section 310(b)(3) limits direct foreign ownership in a US Action on this item, however, is unlikely, leaving OTT services largely corporation holding a broadcast licence to 20 per cent, a limitation the unregulated for the time being. OTT delivery is also subject to copyright Communications Act does not permit the FCC to waive. Section 310(b) rules, with disputes pending or recently resolved before several courts. (4) prohibits indirect foreign ownership in a broadcast or aeronautical Recently, however, a group of cities have sued OTT providers, claiming licensee in excess of 25 per cent unless the FCC finds that greater that they should pay franchise fees as if they were franchised cable oper- foreign ownership would serve the public interest. Historically, the ators under certain state laws. Those lawsuits remain in early stages, FCC did not knowingly authorise indirect foreign ownership of a broad- and will not be resolved definitively for several years. cast licensee in excess of 25 per cent. In November 2013, however, the The FCC does not regulate the delivery of audio or video services FCC announced that it will review applications for approval of foreign to mobile devices as broadcasting, although US copyright laws apply. investment in the parent company of a US broadcast licensee above As such delivery becomes more common, however, the FCC is likely the statutory 25 per cent benchmark on a ‘fact-specific, individual case- to increase its regulation of such services. For example, the FCC now by-case’ basis. In May 2015, the FCC granted an application involving requires programming delivered to most mobile devices to be close- Pandora Radio for greater than 25 per cent indirect foreign ownership of captioned and has begun to require such devices to decode and render a radio station. In September 2016, the FCC amended its foreign owner- such captioning. ship rules for broadcast licensees, including changes to: • permit indirect foreign ownership up to 100 per cent upon a public Ownership restrictions interest finding; 18 Do any foreign ownership restrictions apply to media • permit a previously authorised non-controlling foreign investor to services? Is the ownership or control of broadcasters increase its interest to 49.9 per cent without additional approval; and otherwise restricted? Are there any regulations in relation • permit a previously authorised controlling foreign investor to to the cross-ownership of media companies, including radio, increase its interest to 100 per cent without additional approval. television and newspapers? In enforcing all of these ownership rules, the FCC applies a complicated Media ownership is subject to restrictions on: set of attribution rules that include a broad range of financial or other • ownership of multiple broadcast television stations in a interests denoting ownership, control and influence. single market; • ownership of broadcast television stations reaching a certain Licensing requirements percentage of the population (national ownership cap); 19 What are the licensing requirements for broadcasting, • ownership of broadcast radio stations within a local market; including the fees payable and the timescale for the • service to a certain percentage of the population by a single necessary authorisations? cable operator; • ownership by a cable operator of a certain percentage of the chan- Television and radio stations are licensed individually. Cable systems nels it carries; and are not licensed by the FCC, but instead are franchised by state and • ownership of two or more of the top four television networks (ABC, local governments. Cable systems, however, often use satellite or CBS, FOX and NBC). wireless infrastructure licensed by the FCC. Direct-to-home satellites and certain satellite earth stations are licensed by the FCC. Licence In November 2017, the FCC eliminated several ownership rules, including applicants must pay an application fee that depends on the asset to be one that had prohibited cross-ownership of broadcast and radio stations licensed. OTT internet video services are not licensed by any federal or within a local market and another that had prohibited cross-ownership of state regulator. television and radio stations in the same geographic area. It also substan- As new licences are often unavailable or difficult to obtain, entities tially relaxed the limitation on ownership of multiple television stations typically obtain broadcast and satellite assets through an assignment of in a single market – in some cases, permitting applicants to request the licence or a transfer of control of the entity controlling the RF licence, such combinations on a case-by-case basis. The US Supreme Court subject to the consent requirements mentioned earlier. Assignment or recently upheld the FCC’s deregulatory order. The FCC is considering transfer of control of cable franchises is usually subject to franchising further relaxation of local television ownership rules, as well as potential authority consent. relaxation or elimination of the national ownership cap, although such OTT services are not licensed and will not be licensed even if the deregulatory action may be less likely in light of the new President Biden FCC classifies them as MVPDs. administration. www.lexology.com/gtdt 211 © Law Business Research 2021 United States Harris Wiltshire Grannis LLP

Foreign programmes and local content requirements Full-power, commercial broadcast television stations must submit 20 Are there any regulations concerning the broadcasting an election to each cable or satellite carrier serving the station’s local of foreign-produced programmes? Do the rules require a market every three years. Those that elect must-carry receive automatic minimum amount of local content? What types of media fall carriage (with some exceptions) but cannot demand compensation. outside this regime? Those that elect retransmission consent have no right to carriage, but also cannot be carried by distributors in the absence of a written The United States does not regulate the carriage of foreign-produced agreement. In many cases, distributors must pay such carriage rights, programmes or impose local content requirements (except for low- particularly for popular network affiliates. Neither the must-carry nor power over-the-air television broadcasters). Cable operators must often the retransmission consent regimes cover copyright issues, which are carry public, educational and governmental programming chosen by handled under separate, highly complex statutory licences. The FCC’s the local franchising authority. Satellite carriers are subject to a similar recent order permitting television stations to transmit in ATSC 3.0 speci- public interest allocation. Over-the-air television broadcasters must air fied that cable and satellite operators need not carry signals in these certain amounts of children’s programming. Over-the-air television and new formats. radio broadcasters (but not cable and satellite carriers) are also subject to certain restrictions on indecent programming. Regulation of new media content 23 Is new media content and its delivery regulated differently Advertising from traditional broadcast media? How? 21 How is broadcast media advertising regulated? Is online advertising subject to the same regulation? New media content is very lightly regulated compared to content delivered by over-the-air broadcasting, cable and satellite. That said, as new The Federal Trade Commission (FTC) (among other entities) prohibits media delivery begins to compete with and replace more traditional all entities from engaging in false and misleading advertising, regard- modes of delivery, the government will likely increasingly apply regula- less of the medium used. Advertisements covering topics that are tions. For example, disabilities access rules now require full-length video heavily regulated may be subject to additional regulations, regardless of programming delivered using IP to be closed-captioned if that program- whether the ads appear on television, online or elsewhere. For example, ming is also delivered with captions via over-the-air broadcasting, cable advertisements for political candidates must include disclosures or satellite. These rules also require a wide range of devices that are required by the Federal Election Commission and, in some instances, capable of playing video delivered over IP networks to display closed state law; advertisements for pharmaceuticals must meet stringent captions. In addition, the FCC has adopted rules covering the accessi- Food and Drug Administration requirements related to drug advertising. bility of user interfaces for devices used to access video programming. Over-the-air television, cable and satellite providers are subject to These rules impose similar obligations on devices that receive content FCC restrictions on advertising in children’s programming and adver- via IP networks and devices that receive content via more traditional tising of tobacco products. Over-the-air and cable television providers delivery modes. FCC classification of OTT providers as MVPDs would are further subject to FCC restrictions on the advertising of lotteries and add to this regulation by applying retransmission consent, programme certain games of chance, although this rule does not apply to truthful access and other rules to such entities. advertisements regarding casinos where casinos are legal. These Also, in 2014, the US Supreme Court determined that an entity that restrictions do not currently apply to streaming online video. In 2013, the picks up free, over-the-air broadcast signals cannot send those signals FCC adopted rules implementing the CALM Act, prohibiting commercial to its customers over the internet without receiving copyright authori- advertisements from being louder than the programming that surrounds sation. Subsequent decisions have clarified that such entities cannot them. These rules apply to broadcast television stations, pay-television employ the statutory copyright licence reserved for cable systems. programmers, and cable and satellite carriers, but not (yet) to internet video services. The FCC also requires broadcast stations to make public Digital switchover certain information about spots they sell for political advertisements. 24 When is the switchover from analogue to digital broadcasting Online advertisements are subject to a few additional restrictions required or when did it occur? How will radio frequencies beyond those that apply to advertisements generally. Under the Children’s freed up by the switchover be reallocated? Online Privacy Protection Act (COPPA) and the FTC’s COPPA rules, advertisers cannot use online ads to knowingly gather personally identifiable The switchover for most broadcast television stations occurred in 2009. information from children aged under 13, to gather personal information The FCC reallocated that spectrum to commercial mobile services, some through an online ad directed towards children, or to gather personal of which will be auctioned and some of which has been allocated to a information through an online ad placed on a site directed towards chil- nationwide public safety network. The switchover for low-power stations, dren. Additionally, for advertising via email, the FTC’s CAN-SPAM rules however, remains ongoing, and some such stations still transmit in require that senders of commercial email identify emails as an advertise- analogue. Television stations have sought authority to voluntarily ment, provide information about the identity and location of the sender, transmit in a new format, ATSC 3.0. Any such transmissions will involve and provide a functional opt-out mechanism, among other requirements. issues similar to those raised by the switchover of analogue to digital. Low-power stations must complete the transition to digital broadcasting Must-carry obligations 12 months after the completion of the post-incentive auction transition. 22 Are there regulations specifying a basic package of programmes that must be carried by operators’ broadcasting Digital formats distribution networks? Is there a mechanism for financing the 25 Does regulation restrict how broadcasters can use their costs of such obligations? spectrum?

Cable operators and direct-to-home satellite providers are subject to No, but broadcasters must retain at least one channel of free, over-the- must-carry obligations concerning the signals of over-the-air television air broadcast programming, and remit 5 per cent of any income derived broadcasters in their operating area. OTT internet providers are not. from ancillary services. As a practical matter, broadcasters transmitting

212 Telecoms & Media 2021 © Law Business Research 2021 Harris Wiltshire Grannis LLP United States in the current format, ATSC 1.0, have found it difficult to offer non- involve the telecoms, broadcasting or new media sectors. While the broadcast services. The new proposed format, ATSC 3.0, promises to antitrust laws generally do not have a minimum jurisdictional threshold, give broadcasters more flexibility to offer such services. the Hart-Scott-Rodino Antitrust Improvements Act of 1976 (the HSR Act) requires that the DOJ and the FTC receive pre-merger notification if the Media plurality transaction meets the size of transaction or size of persons thresholds. 26 Is there any process for assessing or regulating media Under the 2021 thresholds, effective from 4 March 2021, a transaction plurality (or a similar concept) in your jurisdiction? May the must be notified if: authorities require companies to take any steps as a result of • the voting securities and assets of the acquired person are valued such an assessment? at more than US$92 million and if one of the parties has sales or assets of at least US$184 million and the other party has sales or The United States does not expressly regulate media plurality, view- assets of at least US$18.4 million; or point diversity or similar concepts. US ownership restrictions (eg, • if the voting securities and assets of the acquired person are cross-ownership prohibitions) for particular media sectors serve to valued at more than US$368 million. protect viewpoint diversity indirectly. DOJ and FTC reviews are generally subject to a minimum 30-day initial Key trends and expected changes review period. In transactions subject to a second request of the parties, 27 Provide a summary of key emerging trends and hot topics in the review can take significantly longer. Under the HSR Act, the DOJ and media regulation in your country. the FTC share jurisdiction for reviewing all mergers, acquisitions and joint ventures involving providers of telecommunications, broadcasting Ownership and new media, with the lead reviewing agency determined by sector The FCC recently relaxed or eliminated certain ownership restrictions. or transaction.

Mergers and acquisitions Merger control – FCC and state and local authorities Numerous television broadcast ownership groups have sought permis- The FCC, public utilities commissions (PUCs) and state or local fran- sion to combine. We expect many additional such requests in the chising authorities also review mergers, acquisitions (including asset coming months. sales and licence transfers) and joint ventures that involve authorisations or franchises that they issue. Each of these processes is separate. REGULATORY AGENCIES AND COMPETITION LAW For major transactions involving significant competition or public- interest issues, the FCC reviews transactions under a suggested 180-day Regulatory agencies time frame, though it often stops and later restarts the clock, resulting 28 Which body or bodies regulate the communications and in a lengthier review. For routine transactions, the specific procedures media sectors? Is the communications regulator separate and timescales for approving licence transfers and assignments vary from the broadcasting or antitrust regulator? Are there by licence type and by the FCC bureau. The procedures and associated mechanisms to avoid conflicting jurisdiction? Is there a timescales for state and local reviews of transactions involving intra- specific mechanism to ensure the consistent application of state telecommunications providers and cable operators vary greatly competition and sectoral regulation? from jurisdiction to jurisdiction; these state or local reviews, however, can take longer than the FCC’s review. General The US Department of Justice (DOJ) and the Federal Trade Commission Team Telecom (FTC) regulate vertical and horizontal anticompetitive effects in the tele- The Team Telecom agencies conduct national-security reviews of coms, broadcasting and new media sectors under general US antitrust mergers and acquisitions in the telecoms and broadcasting sectors laws, particularly the Sherman and Clayton Acts. The FTC also regu- (and the new media sector, if there are FCC licences to be transferred lates unfair and deceptive trade practices in these and other sectors or assigned in the transaction) and often require negotiation of secu- under the Federal Trade Commission Act. The Federal Communications rity agreements or assurances letters before consummation. Executive Commission (FCC) regulates competition-related issues in the telecom- Order 13913 establishes some procedures and time frames, including munications and broadcasting sectors under the Communications a 120-day initial review that may be followed by a 90-day secondary Act’s public interest standard. State attorneys general enforce state- assessment in complex cases. It remains untested whether Team level competition and consumer protection laws, and private litigants Telecom may extent reviews for additional 90-day periods. In a typical enforce federal and state competition laws through damages claims. case, a review is likely to last between six and seven months. In complex While there is no single mechanism to ensure the consistent treatment cases, reviews could last much longer. The Team Telecom agencies do of competition-related issues, the DOJ, the FTC and the FCC regularly not act under any particular law. coordinate their reviews in an attempt to avoid conflicting results and undue delay. Anticompetitive practices are controlled both through CFIUS ex-ante and ex-post, sector-specific regulation and by general compe- Under section 721 of the Defence Production Act of 1950, the Committee tition law. Jurisdiction among all regulators is concurrent. State and on Foreign Investment in the United States (CFIUS) reviews acquisi- local authorities generally operate independently of the DOJ, the FTC tions of control (including mergers, acquisitions of stock or assets and and the FCC. joint ventures) by foreign persons of existing US businesses engaged in interstate commerce in any economic sector (covered transactions). Merger control – antitrust agencies The CFIUS does not review greenfield investments, whereby a foreign All mergers, acquisitions and joint ventures that involve the transfer investor creates a new US business. The CFIUS scrutinises the impact or assignment of FCC licences (including service under the blanket of a transaction on national security and gives particular attention to domestic common-carrier authorisation) require prior approval under foreign (and foreign-government) ownership of the acquirer and the the Communications Act, regardless of whether such transactions US business’s contracts benefiting US government agencies. CFIUS www.lexology.com/gtdt 213 © Law Business Research 2021 United States Harris Wiltshire Grannis LLP

reviews are initiated by parties to a transaction or the CFIUS itself. Failure to obtain CFIUS clearance for a covered transaction gives the US President the power to unwind the transaction at any point in the future. Unlike the FCC, which defines ‘control’ as majority equity ownership, voting control or management control, the CFIUS may consider as ‘control’ any prospective investment other than the acquisition of an outstanding voting interest of 10 per cent or less acquired solely for the purpose of passive investment. For a transaction involving CFIUS or Team Telecom review, the FCC will generally not grant consent without Colleen Sechrest [email protected] prior clearance by Team Telecom and the CFIUS. The CFIUS conducts an initial 45-day review of a covered transaction. It may subsequently Kent Bressie conduct a 45-day investigation for a transaction involving more signifi- [email protected] cant national security issues (and must do so for transactions that Michael Nilsson would result in foreign government control of a US business). If CFIUS [email protected] cannot clear a transaction with the 45-day investigation period, it may Paul Caritj extend the investigation for an additional 15 days, with a further 15 days [email protected] for presidential action to block a transaction. In total, the CFIUS process should not last more than 120 days, although parties sometimes withdraw and refile transactions to provide the CFIUS with additional time 1919 M Street NW, Suite 800 for review. Washington, DC 20036-3537 Driven largely by concerns about China’s strategic objectives with United States investments and critical technology acquisition, increasing complexity Tel +1 202 730 1300 Fax +1 202 730 1301 of transactions, globalised supply chains, US military dependence on www.hwglaw.com commercial technology developments, new (particularly cyber- and data-related) national security vulnerabilities, and the inadequacy of other authorities (eg, export controls) to mitigate national security risks, the US Congress passed FIRRMA, which became law on 13 August the foreign investor holds a 25-per cent or greater interest in the 2018. New CFIUS regulations implementing FIRRMA took effect on 13 US business) with the CFIUS to respond to a declaration within February 2020. Among other things, FIRRMA: 30 days by: • expands covered transactions to include other minority, non- • clearing the transaction; controlling investments in US critical technology and critical • notifying the parties that it is unable to clear the transaction infrastructure businesses or businesses that maintain sensitive (giving the parties the option to file a notice to obtain such personal data that, if exploited, could threaten national secu- clearance); rity (with critical technology including not only items covered by • inviting the parties to file a full-blown notice; or existing export control regimes and already subject to CFIUS scru- • self-initiating a review. tiny, but also emerging and foundational technologies controlled under a new interagency process established by FIRRMA); Appeal procedure • expands covered transactions to include the purchase, lease or 29 How can decisions of the regulators be challenged and on concession by or to a foreign person of private or public real estate what bases? in the United States that is part of an air or maritime port, or that is in close proximity to a US military installation or another national Final FCC decisions (including new or revised FCC rules) are subject to security-related sensitive US government property; judicial review. In reviewing licensing and rule-making decisions, courts • provides for special rules for investment funds, allowing such evaluate whether the FCC acted arbitrarily, capriciously or otherwise funds to avoid a review if they invest through a fund controlled not under the law. Courts defer to the FCC’s reasonable interpretation of exclusively by a US general partner, managing member, or equiva- ambiguous statutory provisions. Decisions by FCC bureaux are subject lent, so long as the foreign investors’ rights are consistent with a to review by the FCC’s commissioners; such review must be completed passive limited partner (under FIRRMA criteria); before any judicial review. Enforcement actions are subject to de novo • does not define ‘country of special concern’ but instead tasks review in federal trial courts unless the FCC held an evidentiary hearing. CFIUS with defining ‘foreign person’ in terms of connections to a The DOJ antitrust division is a prosecutorial agency that must foreign country or government and potential effects on US national prove a case in federal district court, subject to appellate review. The security and permits CFIUS to consider whether a covered transac- FTC can either bring cases in the federal district court or adjudicate tion involves a country of special concern that has demonstrated or them before the full FTC, subject to judicial review. declared the strategic goal of acquiring a type of critical technology State PUC decisions are subject to judicial review under state or or critical infrastructure that would affect US leadership in areas federal law, depending on the subject matter. related to national security; In 2014, the US Court of Appeals for the District of Columbia ruled • creates a two-track system of filings – the current option of notices in Ralls v Obama that a presidential decision to suspend or block a plus a new, more abbreviated system of declarations, which are transaction under section 721 of the Defence Production Act following mandatory for certain transactions involving non-controlling CFIUS review must comply with constitutional due-process protections investments in a US business engaged in critical infrastructure, and provide an investor with access to non-classified evidence used in critical technologies, or collection and storage of sensitive personal making a determination about whether to block a particular investment. information where a foreign government with a substantial interest The question of whether Team Telecom action or inaction is subject to in the foreign investor (ie, where the foreign government holds a judicial review has never been tested. 49 per cent or greater voting interest in the foreign investor, and

Competition law developments 30 Describe the main competition law trends and key merger and antitrust decisions in the communications and media sectors in your jurisdiction over the past year.

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