Post i2010: priorities for new strategy for European Information Society ( ) Ofcom s Response to the European Commission s Consultation

Transcription

1 Post i2010: priorities for new strategy for European Information Society ( ) Ofcom s Response to the European Commission s Consultation Date: October

2 Section 1 1 Executive Summary 1.1 Ofcom is the independent regulator and competition authority for the UK communications industries, with responsibilities across television, radio, telecommunications and wireless communications services. 1.2 Ofcom s duties and responsibilities are heavily influenced by EU and international policy and legislative developments, which can define and shape what we do and how we do it. For example, our decisions on economic market regulation are subject to European Commission scrutiny and we work with the Commission and other regulators in the pursuit of closer harmonisation of regulatory approaches across Europe. 1.3 Over the last four years, and as part of our contribution to the i2010 Strategy, Ofcom has sought to proactively engage in European discussions on legislative and non-legislative initiatives in the areas of networks, spectrum and content, focusing in particular on those areas where technical regulation plays an essential role in ensuring that policy outcomes are achieved. We have worked together with other European national regulatory authorities in these sectors, as well as with the European Commission and the European Parliament, and have provided technical expertise and policy input to the UK Government as appropriate. 1.4 We welcome the opportunity to contribute to the European Commission s consultation on Post i2010: priorities for new strategy for European Information Society ( ). This consultation, together with the Commission s Digital Competitiveness Report published alongside it, allow us to take stock of the significant progress made over the last five years in the communications sector in Europe and reflect on the lessons learned. It is also a reminder of the need for national communications regulators to continue to work together with the European institutions to identify how we can help facilitate the creation of a fully-functioning Digital Europe. 1.5 Since Ofcom s inception in 2003 we have set ourselves the goal of being an evidence-based regulator. We therefore rely significantly on our portfolio of research to define priorities for regulatory action, in a way that maximises the benefits for UK citizens and consumers. Constant market research and stakeholder engagement helps us identify our priority issues, directs our activity and allows us to measure our progress towards achieving the goals legislators have set us. 1.6 Our response to this consultation, therefore, focuses on issues where our experience as a regulator can add most value to the debate and where we can contribute some of our most recent research to inform discussions about the vision and priorities for a European Digital Agenda. We note that the UK Government will be submitting a response. We have confined our input to those areas directly related to our responsibilities. 1.7 Our submission reflects on issues of particular relevance to Ofcom under three out of the nine themes identified by the Commission s questionnaire: Theme 4: Creating a 100% connected society and economy through highspeed and open internet for all; Theme 6 Promoting access to creativity at all levels and Theme 5: Consolidating the online single market. 2

3 Contents Page Section 2 General Remarks page 4 Section 3: Creating a 100% Connected Society page 9 (Responding to question 4 of the post i2010 questionnaire) Section 4: Promoting Creativity at All Levels page 21 (Responding to question 6) Section 5: Consolidating the Online Single Market page 27 (Responding to question 5) 3

4 Section 2 2 General Remarks Consumers and citizens at the centre of the Digital Agenda 2.1 Ofcom s primary duty under the Communications Act 2003 is to promote and protect the interests of consumers and citizens 1. This duty underpins all aspects of our activities and drives our work to promote and deliver competition, investment and consumer choice in the market place. 2.2 Some of the important near term challenges for Europe are simply a matter of maintaining good progress on the trajectory already established towards the creation of open and liberalised market structures. Important objectives in this area are agreeing a common approach to the regulation of next generation networks and removing barriers to the efficient use of radio spectrum to support such services as next generation mobile broadband. There may also be a need for further measures to develop the internal market for digital content. Getting policy right in this area will be challenging, however, given the very rapid pace of change in content businesses, and there is a high risk of unintended consequences. We provide further comment on this in section Ofcom s experience is that promoting open and competitive markets is not always sufficient on its own to ensure that consumers and citizens interests are secured. Over the past four years we have witnessed how easier market entry can provide opportunities for the unscrupulous as well as the scrupulous. Also, an increased range of products, technologies, services and commercial offers has led to greater complexity in the market, creating difficulties for consumers when comparing information about different services, prices and providers. In dynamic and rapidly evolving communications markets, there is a need for continued emphasis in consumer protection and empowerment complemented with targeted enforcement powers, including effective redress mechanisms. The anticipated new regulatory Framework for communications and the proposed review of the EU consumer acquis may provide some of the necessary tools but there may be more to do in this area, particularly with regards to crossborder enforcement of regulatory obligations. 2.4 Even well functioning markets may not deliver all the necessary outcomes that society requires, either in terms of longer-term strategic goals such as greater competitiveness, or in terms of the equitable distribution of resources and opportunities. To take one example, the increasing economic and social importance of ICT and digital content may create expectations that such services should be delivered universally to all citizens with all having the full opportunity to participate - but the market alone may not provide for this. 2.5 Ofcom believes therefore that people, whether as consumers or citizens, need to be at the centre of the Digital Agenda, both in the UK and in Europe. This means a shift in emphasis away from simply creating the conditions for market-based competition to take place although this is of course still critically important. We therefore welcome and support the strong 1 Communications Act 2003, 3(1): It shall be the principal duty of Ofcom, in carrying out their functions; (a) to further the interests of citizens in relation to communications matters; and (b) to further the interests of consumers in relevant markets, where appropriate by promoting competition" 4

5 consumer and citizen focus of this consultation, and the efforts of the European Commission and other European institutions such as the European Parliament - for example, in the context of the review of the European Framework for Electronic Communications - to ensure that consumers interests remain at the heart of regulatory concerns and embedded in day-today regulatory practice. 2.6 Defining the consumer or citizen interest can be a complex task, as people s needs vary widely both within countries and across Europe. Indeed, there is no such thing as a typical consumer or citizen. Ofcom uses a variety of approaches to define and engage with consumer and citizen interests related to the communications sector, including using a consumer interest toolkit to identify the consumer interest during our policy development processes. We also heavily rely on research to understand not how economically rational consumers should behave, but how consumers actually behave in the real world 2, and are held to account by the Communications Consumer Panel, an independent body with its own staff and research budget While recognising a legitimate coordination role for the European Commission in the areas touched on in the consultation, we would like to emphasise that: Ensuring that consumers and citizens remain at the centre of the Digital Europe agenda requires joint efforts by national and European governments and regulators, and continued and pro-active engagement with consumer organisation and industry stakeholders. There is a need for targeted solutions (e.g. on quality of service levels) in line with national market conditions. We support European action over and above existing national initiatives. Nevertheless, we encourage the Commission to continue to support this with robust impact assessments to avoid duplication of costs and efforts and to avoid unnecessary prescription of details. The importance of the digital communications sector 2.8 As Ofcom s Chairman, Colette Bowe, explained at the April 2009 European Consumer Summit, the communications sector that we regulate is at the heart of a digital landscape and is increasingly central to people s lives Supporting this argument, our recent Communications Market Report (2009) showed that despite the recession, spending in communications services remains relatively robust, and half of UK consumers would rather cut back on eating out and holidays than give up services like mobile phones, broadband and Pay TV 5. Household spending fell only slightly in 2008 as consumers opted for bundled deals, where they take several products like phone and broadband from one provider, to get value for money The sector also plays an important contributory role to the well-being and competitiveness of the wider economy. We note and support the emphasis that the Commission s Digital Competitiveness Report places on ICT take-up by business and citizens, efficient technological innovation and R&D. The Commission s consultation on International Co-operation in ICTs already raised similarly important questions about the value of the ICT sector globally 2 See Consumer Experience research reports:

6 and the role that we as national authorities as well as the EU institutions can play We agree that digital technologies are critical to stimulate the economic recovery and can, for instance, improve productivity in many sectors. In addition, governments all over the world are now placing great weight on the digital realm to improve the effectiveness of the provision of both public services and cultural goods In June 2009, the UK Government published its Digital Britain report. 7 It considered the implications of rapid technological changes for the broadcasting and telecommunications industry and proposed a series of policies which it believes will ensure that these sectors are in a position to prosper in the digital age. It recognised that the UK is a digitally dependent economy and society and that the Digital Britain sectors account for nearly 1 in every 10 that the whole economy produces each year We believe there is considerable merit in a similarly holistic examination of the issues facing the sector for Europe as a whole. A new post i2010 Framework should safeguard the progress already made, in particular, in creating a framework for open competition and investment in network and services But it should also consider what steps are needed to ensure rapid diffusion and added-value usage of those networks, services and applications as they are deployed and how best to address the legitimate aspiration of citizens across the EU for such networks and services to be made available universally. Only then will Europe achieve its full competiveness potential and deliver wider benefits to society as a whole. Regulation for competition and investment 2.15 To counter the risk of Europe losing its competitive edge, the vision for a Digital Europe needs to be supported by an effective regulatory framework, based on competition principles, with an emphasis on continued strengthening of the single market for communications services. EU policy is already on the right trajectory in this regard, but further measures will nonetheless be needed to maintain momentum The European Commission has consistently played a strong and effective role in ensuring that national regulators follow a consistent path in implementing market-opening measures in relation to networks and services. In the future, we anticipate that this role will be complemented by the creation of a strong and effective Body of European Regulators for Electronic Communications (BEREC). The aim of the Commission and BEREC should in our view be the continuous improvement of the quality and rigour of regulation across the EU as a whole In ensuring regulatory remedies are fit for purpose, an important challenge remains the securing of early and widespread investment in next generation fixed and wireless networks across Europe. We would like to reiterate the 6 ex_en.htm UK Response (supported by Ofcom) tributions/uk_dept_business.pdf 7 6

7 view, articulated by our Chief Executive, Ed Richards in the early summer, that competition should act as a driver for investment in next generation networks, not as a barrier, and that public authorities should promote both. 8 We strongly believe that a policy which promoted short term investment at the expense of long-term competition would be ultimately disastrous for Europe We also continue to believe that flexible, liberalised rules in relation to the use of radio spectrum are the best means to prepare Europe for what remains an uncertain technological future. Active co-operation between the Commission, Member States and holders of spectrum rights will be needed to create the necessary flexibility As we have already noted, effective competition requires more than just the removal of supply side barriers to entry, but effective and informed consumers able to make use of the new opportunities presented to them, with confidence in the integrity of the services on offer. The revised Regulatory Framework for Electronic Communications Networks and Services, presented by the European Commission in 2007 and currently undergoing conciliation, is a cornerstone of this vision. The new package creates strong new protections for consumers, including stricter rules relating to the transparency and the terms of internet offers in the market and stronger requirements on number portability. It will be important to ensure that these new powers are used vigorously to strengthen consumers ability to make full use of the market. Ofcom would like to take this opportunity to once again, urge European legislators to quickly adopt the package. Consumers deserve the increased protection provided by the new package. Spectrum 2.20 As part of the new framework the Commission recognised the importance of liberalised spectrum markets as a facilitator of the European single market and proposed several provisions aimed at encouraging liberalised spectrum management regimes across the EU Member States. These included measures around managing spectrum on a technology and service neutral basis, insofar as possible, to facilitate ease of access to spectrum and to ensure the most efficient and effective use of this resource. In addition, further proposals strengthened the role of spectrum trading within the EU, allowing the Commission to harmonise the spectrum bands in which trading may take place while maintaining Member State discretion to introduce trading in further bands on a national basis Ofcom supported these proposals; they mirror policies we have been pursuing for some time and we are aware of the significant potential benefits which can be derived from this form of spectrum management. Under the new framework there are plans for a multi-annual spectrum policy programme. This programme, jointly agreed by the Commission, the European Parliament and the Member States, following a Spectrum Summit, will provide a useful opportunity for us to collectively decide on a course of action for spectrum policy for the next four or five years that will help to shape our future work. Consequently, the content of the spectrum policy plan will be critical In addition to the new regulatory framework, and the potential benefits to be derived from it, European Member States are currently presented with a unique opportunity through the release of the digital dividend. The release of this prime spectrum, highly valued because it offers a technically valuable 8 See Ed Richards speech at the ECTA conference: 7

8 combination of capacity (bandwidth) and range, offers real opportunities for wireless innovation and could enable the launch of a wide range of different services, including mobile broadband Europe is at a key stage in the process of releasing the digital dividend, with several Commission initiatives expected shortly. Now is the time to recall that our objective in releasing the digital dividend should be to maximise the economic and societal value that the use of this spectrum is likely to bring in the long term, while ensuring the effective and efficient use of the radio spectrum. The way to achieve this is to promote flexible use, allowing users to decide how the spectrum should be used, for what and by whom. 8

9 Section 3 3 Creating a 100% connected society Competition as the driver for network availability and take up 3.1 As mentioned above, digital communications services, such as fixed telephony, broadband, mobile phones and digital TV, are playing an increasingly significant role in the way many of us stay in touch, work, learn, play, shop and access public services. The widespread availability, take-up and effective use of key digital communications has therefore become important for society as a whole. 3.2 Today, more than two-thirds of UK households have broadband, with take-up reaching 68% by the end of March This is up from 58% the previous year. This market growth has been stimulated by strong competition. The number of unbundled lines where rival communications providers such as Sky or Carphone Warehouse offer services over BT s copper telephone network reached the 6 million mark in August, and more than 12 million households and small businesses in the UK now use a telecoms provider other than BT. 3.3 Besides increasing choice, competition has also delivered lower prices. Ofcom's latest Communications Market Report (2009) shows that the cost of residential calls from a landline has come down from in 2003 to a month in Strengthened competition is itself a product of resolute regulatory intervention, in particular the functional separation of BT s bottleneck assets in People are increasingly starting to give up their landline and rely on mobile devices. The number of households with fixed lines has fallen to 85% in 2008 from a peak of 90% in 2007, whilst household take-up of mobiles has remained at about 90% since In addition, consumers continue to take up mobile broadband. In May 2009 alone there were more than a quarter of a million new mobile broadband connections, up from 139,000 new connections in Around 8 million people in the UK had accessed the internet on their mobile phone in the first quarter of 2009, an increase of more than 40% on last year. And consumers are downloading more data on the move with data service revenues rising from 1% per mobile connection in 2003 to almost 6% per mobile connection in Competition in next generation access networks 3.6 Ofcom is ensuring that regulation adapts to take these trends into account. We also need to translate these successes into the next wave of networks and services. In its consultation, the Commission asks how the EU can maintain incentives to invest in fixed and wireless networks, and offers a number of options (for example either relaxing or tightening of access obligations). 3.7 In our view, a continued focus by regulators on the development of competitive markets will create the right incentives for efficient investment in 9 9

10 the roll-out and delivery of next generation networks and services. Super-fast broadband is now a reality in the UK and over 12m Virgin Media homes will shortly have access to 50Mbps broadband. Meanwhile, BT has promised rollout of super-fast exchanges across the UK from early 2010 to serve 500,000 homes and businesses, with 10 million expected to be served by We envisage that future investment will comprise a mix of investment and business models, including co-operative models as appropriate. 3.8 We recognise, however, that in addition to promoting effective competition, it is also important to remove any regulatory impediments which artificially restrict the ability of all industry players to invest and to develop an access regime that is fit for purpose The uncomfortable truth is that there is, as yet, no clear consensus on the optimal technology, investment strategy, or deployment timetable for next generation access, either in Europe or the rest of the world. In particular, the demand for NGA-enabled services remains very uncertain. It follows that it is also extremely difficult to determine an optimal public policy and regulatory response to NGA today Nonetheless, some initial conclusions can be drawn: First, competition is more rather than less likely to promote investment in NGA, provided that regulation does not either under-price NGA access to the point where investment is deterred, or create insuperable free rider problems. Second, there may well be a complementary role for the state in facilitating NGA roll-out, particularly in those geographic areas where the economics of deployment are most challenging. Finally, at the level of technical detail, some ideas of regulatory best practice are emerging in relation to access regimes for particular technology deployments We welcome the Commission s acknowledgement of these central challenges in the discussions on their draft Recommendation on regulated access to next generation access networks. We look forward to continuing to input into this important piece of work over the coming months. A significant proportion of citizens still lack access to digital media 3.12 NGA deployment illustrates the general problem that the economics of providing communications networks typically mean that some services are unlikely to be universally available through market forces alone; some gaps in geographic reach are inevitable. Barriers to take-up and effective use of services (such as cost, affordability, or a lack of skills or usable service/equipment) also mean that some groups of citizens risk being excluded from the benefits that these services offer Today, a significant part of the UK population still lacks access to digital communication services. As the Commission s Digital Competitiveness 10 For an overview of Ofcom s work on NGA see: Most recently, we have published a consultation on recent NGN developments, including the latest revisions by BT to its plans for 21CN, and to the related concerns raised by stakeholders. The consultation is available here: 10

11 Report illustrates, this is the case all across Europe, with rural areas particularly affected Ofcom has recently analysed data about people s attitudes and behaviours towards communications technologies and looked in detail at people who tend to have lower levels of digital engagement than the rest of the population. Within this group, we identified three different segments, depending on their characteristics, demographics, behaviours and attitudes In April 2009 we published a summary report with the results - Digital Lifestyles: Hesitants, Resistors and Economisers % of all UK adults who do not have access to the internet at home fall into these three categories. 12 Digital Lifestyles: Hesitants, Resistors and Economisers (April 2009) Resistors (10% of UK adults): Resistors tend to be detached from digital services, believing them to be of little relevance to their lives - and actively resist technology adoption. They are considerably less likely than the general adult population to have taken up digital television or the internet at home, and they also tend not to have mobile phones. Resistors are both less likely to have any experience of learning about digital technology and less likely to have any interest in this type of learning. Resistors are more likely than the general population to be 65 or older, female, not working (often retired), and close to half live on their own. Hesitants (31% of UK adults): Hesitants may have access to a range of digital services at home, but they tend to use them little, primarily due to a lack of confidence, knowledge or interest. Although they are as likely as all UK adults to use a mobile phone on a regular basis, their interest is mostly limited to calls and texts. Their relative lack of experience with, and confidence in, using the internet also makes them both less likely to make checks on, or judgements about, websites and more likely to say they would not be prepared to provide personal information on the internet. This group tends to be older (65+), more likely to be female, in C2DE socio-economic groups, and less likely to be working than the overall adult population. Economisers (8% of UK adults): Economisers see clear value in the full range of benefits that digital services can offer and take advantage of the platforms at their disposal but costs, whether perceived or actual, may be limiting further take-up and use, particularly of the internet. They are less confident internet users and this affects the judgements they make regarding providing personal information online. Half of all Economisers are aged and most are in C2DE socio-economic groups, particularly DE As the sources of exclusion vary, so inevitably must the techniques used to address the problem. We support the Commission s efforts to date to encourage citizens access to, and use of, digital communications technologies and services at European level and, in particular, initiatives on e- inclusion policies under the i2010 programme, such as Bridging the Broadband Gap and Digital Literacy We believe that this should remain a high priority at EU level, and are keen to work with the Commission and other institutions to address some of the immediate and future challenges tyles.pdf 12 Within the three segments there are some people who do have access to the internet at home. However, they do not necessarily use this personally, or have a narrower breadth of use than the general UK population. Ofcom has conducted separate research on the reasons why people are not using the internet at home which is discussed in more detail below 11

12 Ofcom s work on Access and Inclusion 3.18 The Communications Act 2003 gives us the general duty to further the interest of citizens and consumers in relation to communications services. In carrying out this duty we are required to secure the availability of a wide range of electronic communications, television and radio services throughout the UK and must consider the extent to which these services are available across the UK. 13 We are also required to have regard to the needs of the elderly, those with disabilities and those on low incomes. 14 We have powers to impose universal service obligations on communications providers in order to secure the interests of users. We also have the duty to draw up codes of practice to safeguard and promote the understanding and enjoyment of television programmes for users with a hearing or sight disability through the use of subtitling and audio description We do not have wide ranging powers in respect of a number of other access and inclusion issues, e.g. with regards to our duties to encourage the availability of easily usable devices and promote media literacy. In the absence of specific powers, we are working closely with stakeholders to focus on the present and future media literacy needs of all members of society and provide leadership Our focus is on the promotion of widespread geographic availability, take up and effective use of key communications services to ensure that all citizens, no matter of their age, income, location, education or disability can access and use digital communications services and thus can actively and effectively participate in society. This is one of our highest priority areas as an organisation, which we describe as our access and inclusion work Our statutory duties give us a broad range of access and inclusion issues to consider. One of our key challenges in this respect has been to ensure that we use our resources carefully and work with other organisations where appropriate to achieve the greatest possible citizen and consumer benefit. In March this year, Ofcom published a consultation, Access and Inclusion Digital Communications for all, outlining a checklist approach to thinking about these issues: First, to consider which services matter most from an access and inclusion perspective based on how they help facilitate participation over and above other communications services; and whether a majority of people use the service to participate so that those without access are at risk of exclusion. Second, to assess whether there are significant gaps in the geographic availability of these services. Third, to assess whether there are issues preventing widespread takeup of these services. 13 Section 3(2) of the Communications Act Section 3(4) of the Act. 15 See Ofcom s Annual Plan 2008/9 ( ) and draft Annual Plan 2009/10 ( 12

13 Fourth, to consider whether there are significant impediments to the effective use of these services This framework has helped us identify our key priorities, in areas where we can add value, which are set out in the box below. Key actions in Ofcom s Access & Inclusion work Emergency (999/112) mobile roaming: Emergency mobile roaming will shortly be available in the UK as a result of a collaborative effort between Ofcom, the mobile network operators, the fixed operators who provide call handling services and the emergency services. Mobile phones will automatically switch to an alternative mobile network for an emergency call if the user is outside of their service provider s coverage area. Broadband Availability: Following the publication of the Digital Britain report and Government s proposals for a 2Mbps broadband universal service commitment by Ofcom is providing technical support and advice to make this target a reality. Broadband Take-up and Digital Participation: Following a call from government, Ofcom is leading a Consortium for the promotion of digital participation. The work of the Consortium, which was launched on 15 October, will include a Social Marketing Programme and Targeted Outreach. Media Literacy: In our Media Literacy Programme we are working closely with other organisations to improve the understanding of digital communications services. Most recently this has led to the launch of Switch On! a resource for practitioners working with people with learning difficulties and disabilities together with our partners Mencap. Switch On! offers an Ofqual approved qualification. Our further Media Literacy work is discussed below. Services for disabled people: A national trial of a service to allow text messages (SMS) to be sent to the emergency services commenced in September. This service is specifically intended for people who cannot make voice calls because of their hearing loss, speech impairment or other disability. 17 We have also published a statement on the future of TV Access Services. 18 In July 2009 we published an independent report by Plum Consulting which looked at how well existing telecoms services (text relay, SMS, and instant messaging) meet the communications needs of people with hearing impairments. 19 Universal Service Obligation (USO): One of the most important mechanisms through which we deliver against our Access and Inclusion duties is the Universal Service Obligation. In the UK, it is for the Government to determine the services that are subject to a Universal Service Obligation in the Universal Service Order, and Ofcom is then responsible for implementing this. 20 To do so we have designated BT and Kingston Communication as Universal Service Providers (USPs). They have to provide a number of services at a uniform price across the UK, including a fixed voice telephony connection which must be capable of supporting a dialup modem to provide narrowband internet access, and social tariffs for consumers who have difficulty affording telephone services. A current example is BT Basic We have since made significant progress taking the lead or working with Government and others as appropriate. We look forward to increasing the SMS-based emergency services require pre-registration through Under section 65 of the Communications Act We have recently embarked on the most significant review of the existing Universal Service Obligation since Ofcom plans to publish a consultation that sets out a proposed framework which will in turn enable us to carry out a review of the existing obligation placed on current USO providers, the value the USO provides to society as a whole, and potential funding and procurement of the scheme if we find that there is now an unfair burden on USO providers delivering the USO. 13

14 level of our engagement with European institutions and consumer bodies involved in promoting access and inclusion We currently have no statutory powers to require communications providers to meet all reasonable requests by customers for access to broadband or mobile services. Any measures to extend access to these services would thus fall outside of the USO area at present However, the UK Government s Digital Britain report, setting out the strategic framework for the UK communications sector, includes a proposal for a broadband (2Mbps) Universal Service Commitment by We are working with Government and industry to explore the technical designs which could enable wider availability of broadband and to estimate the underlying costs, including how to deliver its proposal for a broadband universal service commitment In this context, we note with interest the changes proposed to the Universal Service Directive in the context of the Framework Review, which would allow Member States the flexibility to define the internet data rates in accordance with their national circumstances We look forward to contributing to the European debate on the future of USO, which we believe to be of critical importance. The Commission, in their lead role, has already raised important questions such as the degree to which the scope of USO should be determined at a national, rather than pan-european, level, whether mobile telephony should be included within the scope of the USO, whether the USO should be extended to cover broadband, how it should be funded and how to ensure consistency across Europe. To this list, we would add the important question of how the opportunity to provide the USO itself can be made a contestable opportunity Certainly, the discussion around availability of digital communications services should not be limited to fixed networks. In 2008, Ofcom conducted a broad strategic review of the UK s mobile sector to analyse how it performs for consumers and citizens and what pitfalls and challenges they face. Availability issues were revealed with elderly and disabled people still having lower take-up and coverage gaps (not-spots) persisting To address persistent 2G not-spots (or complete not-spots ) we intend to explore how we might encourage creative solutions. For example, we intend to work with mobile operators and with public bodies in the Nations, regions and localities to bring together relevant expertise as they consider initiatives to resolve not-spots in their areas (as we have done previously with local broadband initiatives). 22 We are also planning to conduct research to examine the actual causes of persistent not-spots and investigate network quality in mobile services including mobile broadband. In July we also, for the first time, published maps showing 3G coverage by operator. 23 The Internet is a major channel for citizen participation 3.30 The internet has provided new channels for people to interact with democratic institutions and to become engaged in a range of activities associated with 22 See, for example, the Government and Ofcom s guidance to public bodies considering public investment in broadband schemes: Public Broadband Schemes: a best practice guide, DTI/Ofcom, February 2007, available at 23 The maps can be access under 14

15 citizen participation such as getting involved in the local community or having access to central and local government services that are increasingly delivered online. This is likely to continue to increase Ofcom agrees with the Commission in their analysis that, while these new channels may raise levels of engagement, they also pose a challenge: a significant section of the population, lacking access to these technologies or the confidence to use them, may become increasingly disengaged To gain a better understanding of whether participation levels were different among those with internet access, Ofcom conducted research to provide evidence on the level of engagement in citizen participation and types of activities undertaken among the general population and to understand if participation levels were different among those with internet access. 24 We found that the majority of people are engaging in citizen participation, with a substantial proportion taking part in multiple activities. There were, however, demographic and socio-economic variations, with younger people, those in lower socio-economic groups and with lower education level less likely to be active. Critically, having access to the internet at home emerged as a key differentiating factor which aided participation. There was also a lack of awareness of possible uses, and issues concerning trust and confidence Importantly, a recurring theme throughout this research was a desire for traditional channels of communications, e.g. written, telephone or face to face contact, to be preserved, particularly for those without access to, or confidence in the use of, the internet. Even those who are most favourable about using the internet for citizen participation see a continuing role for traditional offline channels of communication. We analysed the reasons for lack of Internet take up in the UK 3.34 Increasing broadband availability will not automatically result in higher take-up of internet services. While the majority of individuals and businesses now have broadband internet access, there remains a significant minority of households without access to the service (about 30%). 25 We have looked at the reasons why UK adults do not have the internet at home and the barriers that prevent them from taking it up in the future Around, 42% stated that the main reason for not having the internet at home was lack of interest or need (self-excluded); the remainder stated financial reasons (financially excluded). 24 We defined citizen participation as taking part in activities to do with interacting with democratic institutions, activities to do with campaigning more generally and activities to do with community involvement. See: 25 Results from Ofcom Communications Tracking Survey, Q See Accessing the Internet at Home by Ipsos Mori at: 15

16 Accessing the Internet at Home (June 2009) The self-excluded: 42% of adults stated their main reason for not having the internet at home was due to lack of interest or need. They tended to be older and retired and 61% have never used a computer. This group shares a sense of indifference, with many struggling to express any reason why they should have the internet at home. Some also felt they were too old or believed that it is for younger people. Over two fifths (43%) of adults who currently do not have access to the internet at home say that they would choose to remain unconnected even if they were given a free PC and broadband connection. The financially excluded: Concern about the expense of using the internet is a significant factor for a substantial minority. 30% of adults said their main reason for not accessing the internet at home was that it was too expensive or they did not have the knowledge or skills to use it. Half of respondents in this group (51%) gave as their main reason expense or costs of monthly subscriptions, while just under three in ten (27%) said the cost of a computer or not owning a computer was their main reason for not having an internet connection The Commission s Digital Competitiveness Report also highlighted the perceived lack of need as a major barrier to broadband take-up. We fully support the need for greater action to encourage the use of the internet, particularly for those most disadvantaged, as a key priority Our research looked at possible ways to encourage internet take-up, including half-price computers and discounted monthly tariffs. These were more likely to appeal to employed, under 44 year-olds with children. Free training was most important to those aged (11%) followed by half priced computer (9%) although the majority (58%) chose not interested or don't know. The second digital divide: breadth and depth of the online experience 3.38 There are also differences in use and levels of engagement amongst those who already are online. We agree with the Commission s recognition that there is a second digital divide developing (the disparities between different groups of society in the quality of internet use, and the benefits as well as risks derived from that use) that also needs to be tackled. We have been considering this issue, which we describe as the breadth and depth of digital technologies use, mainly in the context of our media literacy work Ofcom is one of the few communications regulators in Europe to have a specific duty to promote media literacy (section 11 of the UK Communications Act 2003). We define media literacy as the ability to use, understand and create media and communications. 27 In accordance with this duty we need to bring about a better public understanding of the nature of content, including internet content, how it is selected and made available and how it can be controlled and regulated Our key priorities for the promotion of media literacy are: 27 This definition supersedes the definition used in Ofcom s Strategy and Priorities for the Promotion of Media Literacy: A Statement 2 November See for further details 16

17 content management providing people with the tools to manage content content information promoting the provision of information to help people manage and engage content critical awareness promoting a better understanding of the nature and context of media messages While we do not have specific powers in relation to this duty, we are required to carry out research into these matters and all of our work in this area is strongly underpinned by research that allows us to investigate the extent of media literacy in the UK and identify emerging issues and trends Findings from Ofcom s latest wave of Media Literacy Audits (2008) present a picture very similar to that outlined by the Commission in its report, with measures of interest, awareness and competence varying significantly by age and socio-economic group. Generally those aged over 65 and those from lower socio-economic groups have lower media literacy compared to the rest of the population. Interestingly, while those aged generally exhibit higher levels of interest, awareness, and volume and breadth of use of media, they show lower than average levels of understanding of funding sources and the existence of a regulatory framework for content Following the Audits, we have identified a few areas where we think particular attention is needed in the future: older people with regards to access and understanding; younger people - with regards to understanding (critical awareness); parents and carers - with regards to access (content management strategies and tools e.g. filters and PINs) For example, our research suggests that around 47% of internet households containing children have no software installed to limit children s access to certain types of websites. The number of households using such safety provisions has declined since 2005 for both households with 8-11 year olds and year olds and not all of those who have installed such software use it. We elaborate on the issue of internet safety later in this response We welcome the Commission s recent Recommendation on Media Literacy in the Digital Environment, and their continued attention and work in this area, and appreciate the value that they bring through their coordination role. We believe that in order to successfully deliver, effective multi-stakeholders partnerships at both EU and national level are needed. The next section provides an update on recent developments in the UK. Future challenges: understanding the broadband experience 3.46 We note that the Commission s consultation raises questions about possible targets regarding internet access, such as speeds, latency, transparency and non-discrimination. We share the Commission s view that, going forward, it is important to look more broadly at the overall broadband consumer experience. This is a very complex question, where we strongly recommend that care is exercised, and that actions are underpinned by evidence of consumer benefits and harm. 28 All of our research is available on our website: 17

18 3.47 Ofcom has been looking at this issue for some time now, and we have worked to ensure that consumers are well informed regarding the quality of their broadband services, including what speeds they are likely to receive in practice We introduced a new Code of Practice in June 2008 to ensure that internet service providers offer greater clarity over customers broadband line speeds, including more information and advice on the maximum broadband speed they can individually expect to achieve, and are ready to consider formal regulation if this does not solve the problem In addition to monitoring compliance with the Code (including through mystery shopping exercises) Ofcom has continued its programme of independent research. In July 2009, we published the results of a study of fixed-line broadband speeds in the UK. 30 Broadband is usually sold by its advertised up to speed and, while consumers can find out the maximum speeds their line can support, there is a lack of robust information on the actual speeds delivered. The research measured the broadband speed performance of more than 1600 broadband users over a six month period, including more than 60 million separate performance tests as well as asking consumers about their experiences This research has been an important step to help consumers understand the factors that affect broadband speed and performance and make more informed choices. We also developed a new consumer guide, available on our website, providing practical advice on what to look for when choosing a service, setting out the types of services on offer, and advising on what speeds are required to carry out certain activities As well as continuing to monitor the consumer experience of fixed broadband services, the emerging mobile broadband market merits attention, especially as younger people and those in lower-socio-economic groups are more likely to have mobile broadband as their only home internet connection. Ofcom produced a Consumer Fact Sheet advising people What to look for when choosing mobile broadband We plan to continue to look at these issues during the next year and are currently conducting further research on how the quality of service provided by networks affects consumers quality of broadband experience across a variety of different internet applications - such as browsing, video-streaming, video-downloads, game-playing and VoIP In the future, a more varied selection of metrics will be required to categorise network performance, especially important given the increasing amount of multimedia traffic. We are therefore investigating how the user s view of quality of experience relates to underlying, network-level performance metrics. We will then investigate technologies that could be deployed to realise quality of experience levels in a network. Such technologies could be used to make better use of the network link through innovative traffic management and may enable users to get better broadband performance without the need to upgrade to a faster line