Legal Research

Ofcom takes 6 years to do something it should have done in 6 weeks

By scott

There are times when Ofcom really really annoy me. Case in point is a notification and draft direction issued today to Infolines Public Networks Limited (Infolines). Ofcom is proposing to suspend Infoline?s code powers for being breach of Regulation 16 of the Electronic Communications Code (ECC), as detailed in the Electronic Communications Code (Conditions and Restrictions) Regulations 2003.

The Code enables network providers to construct infrastructure on public land and to take rights over private land, with the consent of the landowner or approval from the County Court,or the Sheriff in Scotland

Regulation16 requires operators who carry out works on public highways, such as installing payphones, to ensure that sufficient funds are available to cover any costs that a local authority (so, us, the tax payers) might incur in reinstating the street should the operator concerned cease to trade and/or have failed to leave the street in a fit state of repair.

Why do I find this notification and draft determination annoying?

The Electronic Communications Code (Conditions and Restrictions) Regulations 2003 came into force on 23 October 2003. Regulation 16 contains a number of specific requirements to ensure that Code operators meet their obligations under the funds for liabilities regime:

16(1)(a) of the Regulations contains the general provision requiring Code operators to ensure that sufficient funds are available to meet specified liabilities;

16(1)(b) of the Regulations requires Code operators to provide Ofcom with a certificate on 1 April each year;

16(2)(a) of the Regulations states that, in the case of a company, the certificate must be signed by the director or a company secretary;

16(3) of the Regulations states that the certificate shall include a statement that in the reasonable opinion of the board, in the case of a company, the Code

operator has fulfilled his duty to put in place sufficient funds to meet the specified liabilities;

16(5)(a) of the Regulations requires Code operators to state on the certificate the amount of the funds which have been provided for;

16(5)(b) of the Regulations requires that the certificate states the systems and processes which enabled the board to form the opinion referred to in Regulation 16(3); and

16(6) of the Regulations states that the certificate shall be accompanied by a copy of any insurance policy, bond, guarantee or other instrument which will provide the funds.

This means, that Infolines ? in common with all other Code operators ? had a legal duty to provide Ofcom with a certificate on 1 April each year showing that the relevant funds would be provided for, and attaching proof of where said funds would be provided from. By Ofcom?s own admission it has ?not received any one of these certificates or any accompanying documentation? since the regulations came into force. Infolines has failed to provide this information for 6 years and Ofcom is only NOW (as Infolines winds itself up) proposing to suspend their Code powers. Who says regulations doesn?t work.

What makes matters worse is that this comes over two years after Infolines ignored a previous notification for failing to do the same thing and ignored an associated fine of £7,500. In the words of Ofcom: ? Infolines failed to comply with the 2007 Enforcement and Penalty Notification?.

Ofcom issued its first notification to Infolines in August 2006. This was followed up by a second with the ignored fine in March 2007, where Ofcom warned it must become compliant or face further regulatory action.

Fast forward to May this year, and Ofcom opened another investigation to see if Infolines was continuing to operate payphones and may also be applying to local authorities to install further payphones in contravention of the earlier enforcement notifications issued (and it seems ignored). Yes they were was the conclusion, and so we arrive at the current notification.

Seriously, What is Ofcom playing at? Also, how much money has it wasted dragging this out?

You don?t need an investigation to see whether or not someone has submitted a certificate or not. You either have it or you don?t. If you don?t, you issue a notification saying you?ll suspend code powers immediately unless you receive said certificate within a month/ 6 weeks etc. Really very simple and straight forward, and means you don?t get a situation where ? as in the case ? a company just sticks two fingers up at you for almost 7 years.

Ofcom notes that ?Infolines has submitted an application, dated 14 August 2009, to Companies House to be struck off the register of companies. In applying to be struck off the Director of Infolines confirmed that in the past three months the company has not, among other things, traded or otherwise carried on business. On 1 September 2009 the Registrar of Companies gave notice in the London Gazette that, unless cause is shown to the contrary, at the expiration of three months from 1 September 2009 Infolines will be struck off the register and the company will be dissolved. Ofcom notes that Infolines may be struck off the Companies House register on or around 1 December 2009. If and when this process reaches its conclusion, Ofcom will consider what further action it may take.?

Would this further action be the action it should have been taking at least two years ago? ? suspending code powers, getting its fine paid etc etc.???

So, what we learn from this is that if you are an operator with Code Powers, and you?re short of a few quid, then you don?t really have to worry about complying with the Regs, as Ofcom will happily let you string them along for 6 years before they?ll take any action that will really effect your ability to conduct your business.

Full post as published by Information Overload on September 23, 2009 (boomark / email).