Comment on the implications of Brexit for communications

This article by Sharon White, Ofcom Chief Executive, first appeared in the Daily Telegraph on 4 October 2016

Since the UK voted to leave the EU, trade has dominated discussions on our future. But what will Brexit mean for one of our country's biggest export drivers - communications?

The UK's £57-billion communications sector is already our economy's second largest, after financial services. Communications and information exports rose by £1bn in the last year alone, according to Government figures.

Our telecoms industry is the largest of any major European country. And, of course, the UK is home to an array of household names with global operations, from BT to Vodafone.

As the communications regulator, Ofcom takes no view on the outcome of the EU referendum. But as the Government seeks the best possible deal for the UK, we believe these industries must feature at the heart of the debate. Because leaving the EU will mean choices about replacing, or replicating, the European laws that span these sectors. And that presents opportunities and challenges. Whatever the outcome, Ofcom and others will need the right tools to protect consumers and promote competition.

Take Openreach, the network division of BT. Our public consultation on reform of Openreach closes today. We intend to make the two companies legally separate - so the whole telecoms industry, and its customers, receive better service. If things don't improve, we will return to a plan for structural separation: that means BT selling Openreach.

While that would involve complex issues - Openreach's total assets are about the same as BT's pension deficit, according to investment bank Macquarie's estimate - the option of structural separation remains on the table.

We continue to discuss the detail with BT and we have the power to impose changes if required. The Prime Minister has now said that Article 50 would be invoked no later than the end of March next year.  So when the UK leaves the EU, we want our powers to reform BT confirmed in UK domestic law so we can ensure a more independent Openreach that will deliver for all of its customers.

Approval of some mergers and takeovers may switch to UK regulators, who would work together to scrutinise deals in the sectors we regulate.

There might also be challenges. In the digital age, the rules that govern internet traffic, mobile signals, Amazon or Netflix affect everyone.

Just as globalisation has broken down trading boundaries, modern communications show scant respect for national borders. They travel through the air, under sea and over global networks at the speed of light.

Outside of the EU, how might the UK best contribute to the development of these crucial services in Europe? Ofcom has represented the UK's position on these matters for many years, working closely with our European counterparts.

We've helped shape the arguments, leading to many EU proposals that we welcome - such as protecting children from harmful content, abolishing mobile roaming charges, and increasing market stability by allowing us to regulate over five-year periods.

After Brexit, we want to remain a constructive, influential player in these debates, sharing our experience and expertise. In future, that might mean working with EU countries to ensure 5G mobile devices work across the continent. Or helping to ensure that rules governing online services, like YouTube and WhatsApp, continue to protect openness and innovation.

Broadcasting too has become a global business. In the decades since shortwave radio first crossed the 'Iron Curtain', satellites have come to beam pictures into billions of homes.

For many years, European broadcasters have been able to transmit across the EU, so long as they comply with the rules of the country in which they are established.

We think that principle should endure in the UK, so that media companies based here don't face unnecessary hurdles or uncertainty. The UK is home to the largest number of pan-European media companies, and we want to retain that talent and investment.

These are just some of the ways that Brexit might affect our everyday communications.

Just as the Government is seeking new trading opportunities in a world outside the EU, we would like to see a new framework for telecoms and TV regulation that protects the future needs of consumers and businesses, while allowing us to take part in a global debate over how these fast-moving sectors evolve.