Will the new comms watchdog bite harder than the last?

The UK Government launched its widely anticipated communications White Paper last month, firming up proposals for Ofcom, an all-encompassing broadcasting and communications regulator to replace Oftel.

Comments on the White Paper will be accepted until 12 February 2001, and the authorities hope it will become law by the following year. If so, Ofcom would be set up in 2003.

But comment has so far concentrated on consumer-centric issues: the role of BBC governors, a strategy to deal with expanding ITV businesses, and light-handed regulation that will not upset New Labour's commercial cousins before a possible Spring election.

Should the White Paper become law, however, few will mourn the passing of Oftel, which last year came under fire from BT and its rivals, the European Union and even MPs.

But industry watchers are nonetheless divided over the creation of Ofcom. While many welcome the move, they are waiting to see if this watchdog will bite any harder than the last.

Criticism over 'cosmetic' change

Lee Strafford, managing director of Plusnet, an internet service provider (ISP), dismissed the move as cosmetic. "It's a rebranding and consolidation exercise, and we'll have ineffectual regulation while it reinvents itself. It will be a bureaucratic monster," he said.

He questioned the wisdom of forming such a body while the industry was going through massive change globally, and warned that events would pass Ofcom by as it sought to establish itself.

"The new regulator will be even less effective than Oftel because it will waste a year trying to figure out and communicate what it is," he said.

But BT described the White Paper as a positive step. Ian Morfett, BT's director of regulatory affairs, said: "The world has changed beyond recognition since the pre-internet, pre-broadband days when the old regulatory structures were set up. Further change is on the way and we applaud the Government's desire for a 21st century framework for a 21st century industry."

Other telcos and ISPs have also broadly welcomed the new body, but refused to comment in detail until they had examined the document more closely.

Balance and perspective

Louise Lancaster, director of regulatory affairs at telco Viatel, said: "I wouldn't say that David Edmonds definitely should or should not run Ofcom. The board structure will be interesting if it consists of strong individuals, with a broad range of perspectives and balance of views."

"It will be interesting to see how much power the single figurehead has. It may be that a lot of the decision making will be devolved," she added.

Strafford argued that a fresh perspective was needed. "Edmonds must not be allowed to head up Ofcom. What is needed is experience from the other side of the fence. There's no point putting bureaucrats in a position where they deal with business people," he said.

"They need someone who understands the industry from the inside. It doesn't matter what sector of the industry such a person comes from, we need people who understand our agenda," he added.

And Lancaster did not believe the committee structure would make the new regulator less efficient. "Strategies will be less dependent on the personality of one director general. If you look at both Edmonds and the previous Oftel head, Don Cruickshank, their personalities have been crucial to the direction of regulation under them," she said.

Whoever takes the reins, however, the job ahead is sure to be tough. The warnings issued by the Financial Standards Authority over the credit-worthiness of companies that invested heavily in 3G licences, and the slump in technology and telecoms shares worldwide, will ensure that the UK's communications regulator is thrust into the front line.

As a result, Strafford's view of the future is bleak. "All major telcos are reining in their investment plans, which means fixed line broadband will be even slower in coming. There's no movement in Friaco, or in DSL becoming cheaper or improving technically," he said.

"The auction of fixed wireless broadband licences attracted very little interest. Unmetered narrowband is not evolving, DSL is stagnant and the industry is in a holding pattern. This industry is supposed to be driving the new economy - if that's the case, then we're all in trouble," he added.

WHITE PAPER'S MAIN POINTS

• Future of universal telephone service guaranteed
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• Universal net access to be achieved by 2005
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• The Government will seek to increase public investment in broadband technology
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• Ofcom will encourage the telecoms industry to develop standards to enable communications equipment to interoperate
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• Ofcom will take a front-line role in "tackling illegal material on the internet", promoting rating and filtering systems to control access to content by children