Oftel stakes superhighway claim

Telecommunications Regulator bids for the key supervisory slot in a world of new distinctions

In a move that may herald a turf battle among regulators, Oftel, the statutory watchdog that oversees Britain's telecommunications industry, yesterday staked a claim to wider regulatory powers over the supply and distribution of multimedia products in the digital age.

In a 70-page consultative document, Beyond the Telephone, the Television and the PC, Oftel argues that "telecommunications systems will be a vital component in the distribution of any future digital or broadband services." As a result, the report concludes, "the traditional regulatory distinctions between broadcasting and telecommunications will be difficult to sustain."

Publication of the report, initiated by Oftel's activist director-general, Don Cruickshank, follows indications last month from the Independent Television Commission, the commercial television regulator, that it, too, sought wider powers to regulate emerging multimedia services. The ITC is at work on a code of practice governing "conditional access" - the basis on which consumers can contract for pay TV and interactive services such as home shopping and home banking.

An ITC spokesperson said the Commission had been consulted by Oftel but had no immediate reaction to the document.

Inviting companies and other interested parties to share their views, Oftel said it believed "some regulatory framework and principles may need to be established" before the digital revolution is complete. It has posed 20 key questons aimed at defining the need for a new regulatory framework to govern the emerging multimedia market. Issues include access to distribution networks, billing for interactive services and vertical integration of both supply and distribution.

Industry experts said the Oftel document underlined the need for convergent regulations to reflect convergence in the marketplace, as the traditional distinctions between broadcasters, telecoms carriers and "software" or content providers erode.

"We view it as inevitable that there be convergence between the roles of regulators," a spokesman for BT said.

The document falls short of calling for a single regulator to cover all aspects of the information highway. However, there are clear examples where Oftel appears to stake a claim beyond its current remit. For example, it suggests that a fresh regulatory framework for multimedia might "potentially apply to satellite or terrestrial broadcasters" which may use networks such as BT's to provide fully interactive services. "It would be inconsistent to apply the proposed regulatory framework to only some of those dominant in a particular market," the document suggests.

A single regulator to cover infrastructure, dubbed Ofcom, was among the recommendations in Labour's policy document on the information highway, released last month.

The European Commission will soon release a Green Paper on the information highway, and is expected to raise the possibility of a new European watchdog to handle both content and distribution issues. The US already has a single regulator, in the form of the Federal Communications Commission.

Oftel argues that the multimedia market can be viewed as four distinct markets: content creation; service provision; distribution networks; and consumer equipment, which "may eventually converge." The document concludes that "different forms of regulation may be required to encourage each system type to provide the maximum range and diversity of services to customers."

According to the Oftel document, the chief concern is the consumer's interests, which Oftel believes to be "of overriding importance." It calls for open access to delivery systems, allowing providers of services and programming to use distribution networks on a non-discriminatory basis. Oftel believes that such "inter-connectivity" would improve British competitiveness.

All the same, Oftel suggests, there could be a distinction between "dominant" and "non-dominant" players in the sector. Only dominant players would be required to make their distribution networks available to all suppliers immediately.

Comment, page 15

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