Virgin Media 2010 Annual Report Download - page 23

competition matters relating to electronic communications. Ofcom is responsible for furthering the interests of
consumers by promoting competition. In particular, Ofcom is responsible for regulating the behavior of providers
of electronic communications networks or services that have significant market power, or SMP, in identified
markets, which may have a harmful influence on competition and consumers. A provider is deemed to have SMP
if it has a position of economic strength affording it the power to act independently of competitors and customers
within a given market.
Transposition of the Revised European Framework into U.K. Legislation
The U.K. Government consulted on the manner and form of transposition during late 2010. We expect it to
publish its conclusions in March 2011, following which a Statutory Instrument will be laid in Parliament in
April, ready for transposition into U.K. legislation by the deadline of March 25, 2011. In the meantime, Ofcom
will consult on specific aspects of implementation. We have engaged closely with both the Government and
Ofcom on the design of and approach to transposition—in relation, in particular, to network access, infrastructure
inventory and standard of appeal aspects. Such engagement has included promotion of our position that
mandated access powers or requirements to produce a network inventory must be exercised on an exceptional
basis and must be proportionate and objectively justified (such that operators are not subject to undue burdens
whereby, for example, the wider deployment of next generation broadband networks is encumbered or
disincentivized).
Digital Economy Act
In March 2010, the U.K. Government introduced new legislation in the form of the Digital Economy Act,
which includes the following obligations:
• Obligations on ISPs to notify subscribers whose accounts have been used to access copyright content
illicitly, and to provide copyright owners of anonymized reports in relation to the notifications;
• Obligations on Ofcom to report on the notification regime and other steps taken by copyright owners to
address online infringement, and if directed by Government, to assess potential technical measures
such as suspension of internet access; and
• Powers for the U.K. Government to direct regulations which would allow courts to grant site-blocking
injunctions, subject to certain criteria being met. Government has however directed Ofcom to assess
whether or not this provision of the Act is workable.
The Digital Economy Act also includes new duties of Ofcom to prepare a report on infrastructure within the
U.K.
A number of consultations on these duties/obligations have since taken place, and we have been engaging
closely with the relevant authorities on the practical implementation of measures contemplated under the Digital
Economy Act, in particular with respect to the initial notification obligations on ISPs and Ofcom’s reporting
obligations on infrastructure. The provisions of the Digital Economy Act with regard to online copyright
infringement have been challenged via judicial review by several large ISPs.
Broadband Expansion
We opposed the previous Government’s attempts to impose a tax on broadband network operators to fund
next generation broadband on the basis of the potential for the tax to distort the market and lead to double
charging of consumers. We instead suggested that the Government should source funding from outside the
broadband market. The current Government decided not to implement a broadband tax and instead has decided to
use money from the publicly funded BBC License Fee to drive trials of superfast broadband with the help of
public investment. We expect the tender process for these trials to commence in early 2011. We are playing an
active role in helping Government and industry to understand how best this money might be spent to maximize
the long term value of public investment in broadband networks.
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