EU Communications Directive could cost UK £133m

Implementing the European Union’s (EU) revised Electronic Communications Framework will cost the UK up to £133m according to an impact assessment conducted by the Department for Culture, Media and Sport (DCMS).

The costs are mainly being incurred by a requirement for UK regulator Ofcom to conduct market reviews every three years instead of the current four to five years, increasing its burden by up to £1.3m a year and on industry by up to £10.6m.

A requirement to notify the Information Commissioner’s Office (ICO) of data breaches will add £2m to costs on industry, according to the assessment. Other duties, mainly associated with enhanced information gathering, will cost Ofcom, the ICO and industry up to £750,000 a year more.

There are also unquantified costs involved, including a self-regulation process ensuring consumers’ consent is obtained before cookies are installed on their computers, with vendors required to reprogram browsers with enhanced settings.

The DCMS admitted that the estimated costs are based on little quantitative information from Brussels and that figures should be treated “as orders of magnitude”. The total costs could range from as little as £23.5m with a “best estimate” of £77.8m.

The new framework, which is based on five detailed EU directives, revises one agreed nearly a decade ago.

The DCMS said effective regulation is required to foster and promote competition because the communications sector is a natural monopoly in which large operators have an overwhelming advantage over competitors, which is detrimental to the interests of consumers.

It also emphasised the need to address consumer issues such as security, privacy and universal access.

The aims of the new framework include ensuring effective competition with greater choice of services and lower prices, while promoting investment and innovation in high-speed communications infrastructures.

There will also be enhanced enforcement powers for both Ofcom and the ICO.