Mobile Roaming (EU Exit) Regulations 2019
(Limited Text - Ministerial Extracts only)
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Lord Ashton of Hyde
That the draft Regulations laid before the House on 4 February be approved.
Relevant document: 17th Report from the Secondary Legislation Scrutiny Committee (Sub-Committee B)
The Parliamentary Under-Secretary of State, Department for Digital, Culture, Media and Sport (Lord Ashton of Hyde) (Con)
My Lords, I provided a brief outline of the Government’s proposals in my answers to the Urgent Question in the House on 7 February. Since then, these regulations have been agreed in the other place. I am aware that the Secondary Legislation Scrutiny Committee reported on this instrument on 21 February. It raised the impacts of inadvertent roaming, the loss of surcharge-free roaming and one-sided regulation as areas of interest, all of which I will respond to in my speech. I am also aware that the noble Lord opposite intends to move an amendment to this instrument, and I will comment on that when I have heard his arguments and those of other noble Lords.
We have been clear about the proposed changes to the law on mobile roaming since first publishing a technical notice on 13 September last year. That notice, subsequently updated, provides clear information to consumers, businesses and mobile operators on what the UK’s exit from the EU means for mobile roaming law. It also outlined what this instrument aims to do.
As I set out in this House on 7 February, within the constraints of leaving the EU, this instrument delivers the best possible outcome for all mobile users across the UK in the event of no deal. Mobile roaming is a service enabling customers to use their mobile devices to make calls, send texts and, increasingly, use data services outside the UK. Roaming offers are underpinned by commercial agreements between UK operators and operators in other countries, allowing British customers to use overseas networks at an agreed price. In the European Union and the EEA, the roaming regulation sets that agreed price. Only by limiting these wholesale rates can operators guarantee surcharge-free roaming to their customers. Obviously, the UK cannot impose limits on the wholesale rates charged by European operators once we leave the EU: only a central authority with power over all operators can do that. Despite that, the Government have examined all possible options to continue surcharge-free roaming in the event of leaving the EU without a deal.
We considered legislation to require that UK mobile operators continue to provide customers with surcharge-free roaming after exit, but if European mobile operators decide to start charging British mobile companies higher wholesale prices, which the UK has no authority to prevent, the costs of having to absorb the extra charges without harmonised wholesale charges may lead to roaming becoming unaffordable for many operators. This would lead to one of two outcomes. Either roaming services would be removed from some packages used by customers, or mobile services as a whole would become more expensive to compensate for the increased costs. In effect, consumers who do not travel would have to subsidise those who do. Neither of those outcomes is fair for consumers. We therefore concluded that it would not be feasible to guarantee surcharge-free roaming in the event of a no-deal exit from the EU.
However, leaving without a deal would not prevent UK mobile operators making and honouring commercial arrangements with mobile operators in the EU and beyond to deliver the services their customers expect, including roaming arrangements. The availability and pricing of mobile roaming in the EU in a no-deal exit would be a commercial question for the mobile operators. I am pleased to repeat that the main mobile operators—Three, EE, O2 and Vodafone, which cover more than 85% of mobile subscribers—have already said they have no current plans to change their approach to mobile roaming after the UK leaves the EU. The Government and, I am sure, the whole House welcome those statements. We want to reassure consumers further by giving them the best possible protection in the event of leaving the EU with no deal. We are doing that by retaining those protections not dependent on our membership of the single market.
We are protecting consumers by giving them control of their bills. The Government are legislating to make sure that the requirement on mobile operators to apply a financial limit on mobile data usage while abroad is retained in UK law. The limit would be set at £45 per monthly billing period, which is equivalent to the limit currently in place expressed in euros. After reaching this limit, customers are not able to consume more data unless they make an active choice to continue. This will apply worldwide, not just in the EU and the EEA.
We are also protecting consumers by letting them keep track of their data use. That is why this statutory instrument retains existing measures to ensure that customers receive alerts at 80% and 100% of data usage. Again, this will benefit customers travelling anywhere in the world.
Thirdly, we are protecting consumers in Northern Ireland. The EU roaming regulations require operators to take reasonable steps to protect customers from paying roaming charges for inadvertently accessed roaming services. This may include providing special tariffs, apps and easily accessible information so that customers can avoid incurring charges. We will be keeping obligations on mobile companies to help customers avoid paying charges for inadvertently accessed roaming services.
Retaining protection measures not linked to membership of the single market means clarity and certainty for consumers and businesses. These measures make sure that mobile users are able to manage their spending and data usage. They are working well for consumers at present, they can work well after the UK leaves the EU, and this instrument therefore retains these provisions. The retained provisions will also continue to be enforceable by the regulator, Ofcom, after we leave the EU. The Government are committed to ensuring that the law on mobile roaming will continue to function after we leave the EU. These regulations will help to do this and I commend them to the House. I beg to move.
Amendment to the Motion
Lord Stevenson of Balmacara (Lab)
My Lords, I am very grateful to the Minister for introducing this SI and for his very clear explanation of the issues that were raised by the Secondary Legislation Scrutiny Committee, to which I may want to return. The department has had a good reputation in recent years for steering through some of the most complicated issues affecting modern society, concerning the internet, communications and related issues, with some skill. It is good that it is planning and thinking through some of the issues that have engaged this House, particularly in recent legislation concerning such issues as data protection and internet safety. We look forward to further work on that, with a White Paper coming soon. I never know what “soon” means, but the Minister is nodding so it will presumably be before Christmas.
Lord Stevenson of Balmacara
Variations on a theme are always interesting. However, I think that in recent weeks the department has not covered itself in glory. I thought that the decision on portability was wrong. Having seen the negotiations about that I know that there is considerable consumer interest in being able to take content that one has paid for on holiday and to use it in other territories. To find that being taken away after such a short period of time is going to be a disaster. I think that this issue about roaming is also going to be a problem for the Government when people realise what has happened and what decisions have been taken. I mention this because I want to go a little further into some of the background, although I know there has been some change and I hope that the Minister will flesh that out when he comes to respond.
We had a big discussion about roaming. I like this word “roaming”. It brings visions of going with one’s beloved at the end of the day with the sunset and enjoying whatever one does in those circumstances. Of course, it is not true when you cannot get the mobile signal that will allow you to communicate with your beloved these days. You cannot get it in London, let alone in the far reaches and romantic parts of the country. I do not know why I said that, but it gets us into a broader area of discussion and debate.
Lord Foster of Bath (LD)
My Lords, we use strange language in your Lordships’ House: we do not say “no”, we say “not content”; we “adjourn at leisure” and we have “Motions of regret”. On this occasion regret is the appropriate term because I suspect that if this statutory instrument is introduced, large numbers of UK citizens who wish to travel in EU 27 countries will very much regret the loss of the benefits from the EU’s roaming regulation 531/2012 and the subsequent amendments.
No longer when we go to those 27 countries will we be able to “roam like at home” with guaranteed surcharge-free roaming. No longer, as we heard from the Minister, will UK mobile operators be protected by the regulations on what the mobile operators in the EU 27 countries—and the EEA countries of Iceland, Liechtenstein and Norway—can charge our operators for providing roaming services. There will be, as one website put it, a “wild west” where roaming charges are determined by commercial reasons and the relationships that exist between providers, which may lead to various preferential rates.
I therefore regret that we will return to a myriad of prices depending on which country we choose to visit, which supplier we use and which tariff or bundle we have. That said, I put on record that I welcome the decision by the Government, covered in this SI, to replicate the €50 financial limit. I note that the Government have translated that to £45, which is actually a worse pound-to-euro exchange rate than currently exists—the implication is that if we have a no-deal Brexit the situation will get worse, which I am pretty confident it will.
Lord Ashton of Hyde
The noble Lord will find that the pound will fall, which of course benefits foreign tourism.
Lord Foster of Bath
I do not for a minute deny that there are some benefits, but overall it is certainly not good news. I was praising the Government; let me continue, because I also welcome that within this SI mobile operators will be required to give the alert to users when 80% and then 100% of their data allocation has been used.
There are some pretty obvious questions for the Minister. As he knows only too well, having referred to it himself, the Secondary Legislation Scrutiny Committee has posed a number of questions. There is one in particular about which it would be helpful to hear what the Minister has to say:
“The House may wish to invite the Minister to explain why the possible effects of removing the EU guarantee of surcharge-free roaming were not evaluated, and press for further information on the likely impact on individual and business users”.
I hereby ask him, and hope that he will respond. I would also like to know what efforts the Government have made to broker some kind of deal between the UK mobile phone operators and the relatively small number of operators in the EU 27 countries. It would surely be disappointing if we were to hear that absolutely no efforts had been made.
I know that the Minister wearies whenever I raise BEREC—the Body of European Regulators for Electronic Communications—in your Lordships’ House. Indeed, he is already yawning. He knows that this body, on which Ofcom—our own regulator—sits, played an absolutely vital role in bringing forward these welcome EU mobile roaming regulations. Even if we leave the EU and Ofcom is no longer a voting member, I am sure the Minister will accept that BEREC will be absolutely fundamental in determining any future changes to mobile roaming regulations, and that those changes will have a significant impact on us and on people in this country who wish to travel to the EU 27 countries.
Clearly, we should therefore be seeking to ensure the best possible relationship between Ofcom and BEREC in the future. As the Minister knows, that is the Government’s position. Indeed, on 7 January in the other place the Digital Minister said that,
“the Government recognise that Ofcom would benefit from the continued exchange of best practice with other regulators, and from the exchange of information about telecoms matters more generally”.—[Official Report, Commons, First Designated Legislation Committee, 7/1/19; col. 6.]
In the light of that, what steps have the Government taken in conjunction with Ofcom since I last raised this issue with the Minister to seek to sort out what the relationship is going to be following Brexit? I hope we will not get the answer that nothing has been done.
The Minister referred to the technical note that was issued on 13 September last year and which was updated subsequently, in which it says, interestingly and perhaps rather overoptimistically:
“In the likely event of a deal, surcharge-free roaming would continue to be guaranteed during the Implementation Period”.
However, it goes on to say—the Minister has referred to this already—that in the event of no deal:
“Some mobile operators (3, EE, O2 and Vodafone—which cover over 85% of mobile subscribers) have already said they have no current plans to change their approach to mobile roaming after the UK leaves the EU”.
Can the Minister explain exactly what “approach” means in this context?
I note a number of recent advertisements. For example, Three put out an advertisement on Tuesday saying:
“Remain roaming even if the law changes. We’ll let you Go Roam at no extra cost in Europe, just the same”.
Does that mean that Three has already done a contractual deal with the EU 27 mobile operators and knows what prices it will be charged? If Three can do it, why have the Government not worked with all the other operators to secure certainty for them? Can the Minister explain what EE meant when it told the BBC only a few days ago:
“We are working closely with government on this”?
Can he inform us what work is being done by the Government with EE and what benefit that will bring to British customers?
We note another issue raised by the Secondary Legislation Scrutiny Committee. It drew our attention to the Explanatory Memorandum, which says:
“Mobile operators noted that absent a cap on the charges EU operators can apply to UK operators (as currently regulated by the EU), any increases in costs would likely be passed on to customers”.
It goes on to point out that the effects of all these changes could mean that,
“roaming services could be removed altogether from some customers”.
Can the Minister tell us what estimate the Government have made of that possibility that roaming might disappear altogether? It is certainly not covered in the impact assessment.
The technical note to which I have referred also advises UK citizens visiting EU 27 countries post Brexit to,
“be aware that Ofcom rules allow cancellation of your contract free-of-charge if your operator makes certain price increases”.
I gave the Minister advance notice that I would raise this matter, so I hope that he will be able to help us by saying what “certain price increases” enable us to cancel contracts and switch to another provider free of charge. The technical note cross-references Ofcom’s Guidance under General Condition C1—contract requirements. I confess that I simply could not understand a word of that document and what it means, so I went to other sources, and in particular to the Which? website, which was infinitely more helpful. That says:
“Rules set by the regulator Ofcom mean that customers can leave mobile, landline or broadband contracts penalty-free if a provider ups prices mid-contract if the rise is of ‘material detriment’, for example a rise that’s bigger than the RPI rate”.
Is Which? correct in defining material detriment as a rise bigger than the RPI rate? More importantly, I—and I am sure the House—would like to know whether that applies to a rise in mobile roaming rates while abroad. After all, that is a bolt-on to the contract that we all have with our providers, not the main contract. So the question is: if the main contract conditions for calls, texts and the use of mobile data remain the same but there is a significant increase in the cost of mobile roaming when in the EU, does the material detriment rule apply in those circumstances so we can switch contract and get a better deal with another supplier?
I look forward to the Minister’s response. While I was looking at the Which? website for help with some of these definitions, I noticed the words of Alex Neill of Which?, who said:
“Two-thirds of people think free roaming is important when travelling in Europe, so any return to sky-high charges for using mobile phones abroad would be a bitter blow for millions of consumers”.
That is why we should regret this SI if it ever has to come into force.
Lord Ashton of Hyde
My Lords, I am slightly surprised that I am on my feet already. I thank noble Lords for their contributions. I will try to ask their specific questions before coming on to the point in the amendment to the Motion.
The noble Lord, Lord Foster, made a general point about “regret” being the correct word in these circumstances. Of course it is obvious that “roam like at home” in the EU 27, which has been with us for 18 months, is a good thing for consumers, and I think that many of us who have been abroad in the EU 27 or possibly even the EEA countries have benefited from that. In fact, we have had that not just in the last 18 months; wholesale charges have been capped to some extent for nearly 10 years. Therefore, I agree that there are detriments. However, it is true that consumers are used to dealing with the absence of “roam like at home” in every other country in the world, and there are now many ways by which one can alleviate that, such as the increased use of wi-fi and apps that allow you to communicate over the internet—and of course the ultimate sanction is to switch roaming off. However, I accept that it is a useful thing.
The noble Lord, Lord Stevenson, in speaking to his amendment to the Motion went a bit wide of the issue, as is his wont, but it was interesting nevertheless. He talked about roaming in the UK, which is a domestic issue, not the question of roaming when abroad. It is true that in previous debates—I remember debates with both noble Lords on the subject of domestic roaming—we have said that we were not in favour of it because it prevented investment and stopped competition, and it is true that in most countries roaming at home is not an accepted practice. However, we want to have high-quality mobile connectivity where people live, work and travel in this country, we have committed to extending geographic mobile coverage to 95% of the UK by 2022, and we are looking at ways to achieve that target.
Particularly in rural areas, it is possible to allow customers to be switched on to a network service if their provider has none. I can confirm to the noble Lord that the new statement of strategic priorities for Ofcom, which is our suggestions for what it should consider, has recommended that it further examine the costs and benefits of domestic roaming and to retain the option of requiring operators to introduce rural roaming.
Lord Foster of Bath
On that point, the Minister said that the operators have no plans to introduce charges. In fact, the government document I referred to said that they had no plans to change their approach. Can he guarantee that he has confirmation from the big four that they have no plans to introduce mobile roaming charges following a no-deal Brexit?
Lord Ashton of Hyde
We have had discussions with operators, and it is correct that they have said that they have no plans to do that after Brexit. They have not said that if they are charged increased charges by foreign operators, they will absorb all the costs ad infinitum, for the rest of time, irrespective of what they are. That is not an unreasonable position. The point is that since roaming as if at home has been introduced, consumer requirements have changed, what consumers want has changed, the methods and technology has changed and consumer data usage has changed. For example, I think there is four times as much data being consumed as phone calls. It is very difficult to compare the situation 10 years ago, before any caps came in, to what will happen now.
However, in this country, there is competition between operators, which does not exist in all European countries, so the competitive element is very much at the forefront of consumers’ minds, but we are not requiring operators to accept a differential status, a one-sided regulation. I shall come to that later. When the Regulatory Policy Committee considered the impact assessment, it said that it was satisfied that any impact on price changes will not be a direct result of this SI.
The noble Lord, Lord Foster, asked who we have consulted. We have consulted the big four operators O2, Vodafone, EE and Three, the mobile virtual network operators Sky, Virgin Media and Lebara, trade bodies Mobile UK, the Broadband Stakeholder Group and many consumer groups. He also asked what were the views of the mobile network operators. They expressed similar concerns about this scenario. Of course they were concerned about not being party to the EU roaming regulation, but that is a function of leaving the single market. They did not believe that the regulation mandating surcharge-free roaming could and should endure, for the reasons I mentioned, but I confirm that they said that, because of customer demand, they have no current plans to reintroduce roaming surcharges. That is not an unlimited guarantee forever, as I think I said.
As for BEREC, I agree entirely with both my honourable friend in the other place and the noble Lord, Lord Foster, that our relationship with the European regulator has been beneficial not only to us but to BEREC. We are one of the leading regulators in the EU. Of course, if there is an agreement and an implementation period, the Government will seek arrangements with the EU or BEREC and, if there is no deal, it will be desirable for the Government to seek participation in BEREC. We have agreed in government—not just in DCMS but more widely—that that is beneficial. We will therefore continue making overtures to BEREC to try to have an arrangement that will involve not full membership but, if you like, associate membership where we can contribute our views.
I turn to the amendment to the Motion, which implies that we should not have done what we said we would and capped roaming charges. I explained in my opening speech why the UK cannot retain surcharge-free roaming in law in the event of no deal. The instrument recognises this by correcting deficiencies in retained EU law and removing rules on wholesale and retail charges that are simply unworkable if we leave the EU without a deal.
The noble Lord, Lord Stevenson, prayed in aid the recommendations made by consumer bodies. As I said, we have had a number of conversations with them and provided detail of those interactions to the Secondary Legislation Scrutiny Committee in advance of its report. I mentioned that it noted the benefits of surcharge-free roaming, but the fact is that when the UK is outside the single market, we will not be able to control the charges levied on UK mobile operators by their European counterparts, because this Parliament has no authority over them. The consumer organisations recognise that. For example, Which? stated on its website on 7 February 2019:
“In order to keep ‘roam like at home’ going, it is likely a similar mutual cap”—
by which it means on wholesale prices—
“would have to be agreed for it to be cost effective for mobile operators”.
Let us be clear on the implications of the noble Lord’s amendment to make provisions to retain surcharge-free roaming. The policy would explicitly put British companies at a disadvantage, compared with foreign competitors, by capping their retail charges but allowing EU operators the freedom to charge them whatever wholesale rate they like. It would put roaming at risk for some operators, thus removing competition. It could therefore force British network operators to increase their overall prices to recoup the foreign charges, so the policy could increase consumers’ costs.
However, it is worse than that. It would mean that people who choose to remain in this country are subsidising those travelling to Europe. The policy would increase the risk of legal uncertainty. Lastly, it would penalise heavily smaller mobile virtual network operators, because they use the physical networks of the main operators and therefore must accept the increased costs without a corresponding network usage to offer EU operators in return. To sum up, the policy could increase costs, have a negative impact on consumers and increase the legal risks around future roaming policy.
Which? suggests that the UK should seek to include mobile roaming in a deal with the EU and in trade deals with other countries. As government Ministers first set out in Answers to Written Questions last June, mobile roaming could form part of any trade negotiation we have with other countries after we leave the European Union, and the Government are exploring all options. Any arrangements on mobile roaming would be subject to negotiations. In the meantime, as I said before, there is no reason to prevent commercial negotiations between UK and EU operators.
For reasons noble Lords will understand, it is too early to detail exactly the future arrangement with our European partners. In the event of a no-deal exit, the amendments in the SI are essential. They will ensure legal clarity for consumers and businesses, retain all operable parts of current roaming law and protect consumers in the event of a no-deal exit. Meanwhile, I repeat that the largest four operators have no current plans to reintroduce charges, so on exit day and thereafter there will be no change.
I hope therefore that we can all agree that it is in the clear interests of British consumers and businesses that this SI is in place in the event of a no-deal outcome. In the light of my remarks, I hope that the noble Lord will feel able to withdraw his amendment and I hope that these regulations will be approved.
Lord Stevenson of Balmacara
I am grateful to the Minister for a full and wide-ranging debate. I am also grateful to the noble Lord, Lord Foster, for adding to my comments on the amendment so that we could debate and discuss it.
I am left with two thoughts. First, this Government have not been slow to interfere in a market where they felt that the competitive environment was not as perfect as it could be; I am thinking of the price cap brought in for domestic energy, which was accompanied by a commitment to look more widely at how prices are set in the market. That is not terribly different from mobile operators relying, as they do, on those who generate and those who sell. The two sides of the energy equation have analogues in what we are talking about here in mobile telephony. I take the general point that, after consideration, the Government decided that this was probably not the best decision to take, but I wonder exactly how they have balanced the interests of operators—both small and large—against those of consumers. I wonder whether we have missed an issue there. The consumer groups the Minister mentioned were unanimous in their view that there was a case for a better regulatory approach. At this stage, the arguments are pretty finely balanced.
Secondly, although I was glad to hear about the measure to look at both home roaming and the wider context, including 5G and all the other issues that must be addressed, Ofcom’s capacity will be squeezed. The Minister did not provide a timescale for the consideration or when the results would come back to this House, but we can look at that outside this session. I hope that there will be time for that. I want it recorded that I am glad that, at last, there is a solution to some of the not-spots and our difficulties with our mobile telephony. We will support the Government seriously pushing Ofcom to come up with a proper plan for this going forward. With those thoughts, I beg leave to withdraw the amendment.