BT 2016 Annual Report Download - page 37

Overview The Strategic Report Governance Financial statements Additional information
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We’re developing an enhanced human rights due diligence tool
for our global sales team. We’ve also undertaken detailed human
rights impact assessments on a number of potential business
opportunities. As a result, we took a range of mitigating steps such
as including detailed contractual provisions, integrating human
rights considerations into customer training and ongoing project
monitoring. We’ve also turned down business opportunities on the
basis of human rights concerns.
Our relationship with HM Government
We’re one of the largest suppliers of networked IT services to the
UK public sector. We work with more than 1,400 organisations
across central, local and devolved government, healthcare, police
and defence to provide some of the UK’s most vital services.
For example:
• We run N3, the National Health Service’s secure national
network.
• We provide telecoms services to the Ministry of Defence and
contact centre and conferencing services to the Department
for Work and Pensions.
• We’ve recently started working with the NHS Islington Clinical
Commissioning Group and the London Borough of Islington to
provide a service that will help join up health and social care in
Islington and improve the experience of care for the borough’s
residents.
• We’re working with Bromley Council to deliver computer and
data centre services which will help provide them with greater
flexibility in running their IT services.
• We’re working with the Government to extend fibre broadband
to rural areas under the Broadband Delivery UK (BDUK) scheme.
• In December, EE was awarded a contract to provide the
emergency services with nationwide 4G voice and data services.
We can be required by law to do certain things and provide
certain services to the Government. For example, under the
Communications Act, we (and others) can be required to provide
or restore services during disasters. The Civil Contingencies Act
2004 also says that the Government can impose obligations on
us (and others) at times of emergency or in connection with civil
contingency planning.
The Secretary of State for the Home Department can also require
us to take certain actions in the interests of national security.
Regulation
Communications and TV services are regulated by governmental
and non-governmental bodies in the UK and around the world.
This is to make sure that CPs and broadcasters comply with
common standards and rules, and that nobody is disadvantaged
by providers with strong positions in their markets.
European Union (EU) regulation
In EU countries, electronic communications networks and services
are governed by directives and regulations set by the European
Commission (EC). These create a Europe-wide framework (known
as the European Common Regulatory Framework) covering services
such as fixed and mobile voice, broadband, cable and satellite TV.
The directives include rules covering:
• access and interconnection;
• universal service obligations; and
• a requirement for national regulators to review markets for
significant market power (SMP) every three years and to put
appropriate and proportionate SMP remedies in place.
Companies with SMP typically have a market share of 40% or
more and would, without regulation, be able to do things such
as increase prices without losing business to competitors (as would
happen in a fully competitive market). The directives also cover
how regulators should impose remedies to prevent the exercise
of SMP, for example by setting price controls. The rules require
national regulators to consult with the EC on any remedies before
they are finalised to make sure they’re consistent with European
regulations.
Functional separation of the access network from downstream
businesses is included in the EU Common Regulatory Framework
list of remedies. But it’s positioned as an exceptional remedy,
requiring a high burden of proof of market failure, and is subject
to EC approval. Structural separation, unless self-imposed, is not
included.
In May 2015, the EC announced its strategy for the Digital Single Market
which includes a plan to review the European Common Regulatory
Framework. As part of this review, the EC will assess how to encourage
investment in infrastructure and how to make current telecoms and media
rules fit for new challenges and new types of service provider. The EC is
also reviewing copyright and content policy. Any changes are expected
to be implemented by mid-2017.
Review of the European Common
Regulatory Framework
UK regulation
The UK telecoms and broadcasting industries are regulated
primarily by Ofcom (the UK’s independent regulator) within
the framework set by the various European directives, the
Communications Act 2003 (the Communications Act) and other
UK and EU regulations and recommendations.
The telecoms sector is subject to an extensive ex-ante regulatory
framework set out under the European Common Regulatory
Framework. By contrast, broadcasting and pay-TV is only currently
subject to a mixture of separate, specific regulation and general
competition law.
The Communications Act and Ofcom
The Communications Act gives Ofcom legal powers and sets out
how electronic communications and broadcasting services should
be regulated in the UK. It includes the conditions set by the
European directives.
• To further the interests of citizens in relation to communications
matters.
• To further the interests of consumers in relevant markets, where
appropriate, by promoting competition.
Ofcom’s main duties