One of the most obvious and potentially long-lasting legacies of the coronavirus pandemic is the elevated role of communications within society.
At the peak of lockdown, millions of people relied on broadband networks for remote working, to access entertainment services, and to communicate with friends and family.
And despite initial concerns that this additional demand would overwhelm the UK’s digital infrastructure, figures from service providers and regulator Ofcom suggested there was only a minimal impact on speeds. Networks remained resilient.
The easing of lockdown measures has reduced pressure slightly, but restrictions are still in place and user habits have been permanently altered by the pandemic. Many people are still working from home, while services such as video calls and streaming have grown in popularity.
In many ways, Covid-19 has acted as a catalyst for the transformation of broadband into an essential utility. The digitisation of public services, the rise of e-commerce, and the proliferation of online entertainment are but three examples of this shift.
Better broadband can increase opportunities for consumers and businesses regardless of physical location and act as a democratising agent. But the reverse of this is that the absence of sufficient connectivity can leave some people and areas left behind from the rest of the society.
This is why the ‘digital divide’ can be such an emotive issue.
The impact of regulation
As the UK moves out of lockdown and into a ‘post-Covid’ economy, there will be new challenges. The country is already in recession and the government’s furlough scheme will end in November. Many consumers will have to grapple with unemployment and personal debt that will affect their ability to pay bills – including mobile and broadband.
Future regulation of the sector will need to take into account the elevated role of communications to society and the economy. Accordingly, frameworks may need to change or be strengthened to ensure that the most vulnerable are catered for and that affordable packages are available.
Ofcom already regulates the prices of some services, has made it easier to switch provider, and has worked to ensure consumers have as much information as possible about services and products. It plans to increase this work to reflect changing circumstances.
“Prior to the current crisis, our research showed one in ten customers was struggling to afford communications services and I would expect this to have increased during the current crisis,” Jane Rumble, director of policy at Ofcom, told a Westminster eForum.
“We’ve also commissioned consumer research to give us an up to date understanding of the financial situation of consumers across the UK and the impact of the current crisis.
“It is important that price controls are working effectively at the wholesale level but it is also important that there are decent services for those in need. Our first start point, as an evidence-based regulator, is to understand where consumers are and how many people are struggling to pay their bills and fulfil our role in to monitor the affordability of consumer services.”
The industry view
The industry has recognised these challenges itself, as evidenced by the measures it has already taken, but understands the changing landscape. At the start of the pandemic, mobile and broadband operators increased data allowances, offered special tariffs to key works and promising not to disconnect anyone.
“There are two key themes emerging post-Covid,” added Ali Law, director of policy at Sky. “Firstly, the important of communications services is higher than ever. Secondly, there needs to be a greater approach to protecting vulnerable customers.”
However, as with any debate in the industry, there is less desire for prescriptive regulation that ties operators’ hands. Instead there is a call for principle-based regulation that provides scope for individual judgements and incentivises investment – specifically 5G and fibre to the premise (FTTP).
The industry says these networks will deliver a raft of benefits to consumers and help the country rebuild the economy after lockdown. The construction of network infrastructure will create jobs, while the rollout of services will stimulate other sectors.
A recent study from industry body Mobile UK and the British Chamber of Commerce (BCC) claimed 59 per cent of businesses believed better coverage would help restart or maintain their operations, while four fifths plan to maintain or increase their mobile usage.
The telecoms sector has constantly lobbied to be treated as a utility like gas and electricity – hoping to secure the additional legal benefits that accompany such status, such as access to sites and the ability to conduct works with less red tape.
However the status of essential service comes with additional responsibilities.
In the industry’s eyes, anything that limits its ability to build and upgrade puts those benefits at risk. It wants a favourable investment climate and permissive regulatory environment that includes a reformed Electronics Communications Code (ECC).
“The fierce competition we face encourages us to invest,” added Law. “Those incentives are not driven by prescriptive regulation.”
This contrasts with the view of Matthew Upton from Citizens Advice:
“I don’t think there’s a binary debate between principles and prescriptive regulation. There are areas where there is nothing wrong with prescriptive regulation as this provides clarity.”
The next steps
Such debates prove there is no ‘silver bullet’ in finding a balance that suits everyone but there are compromises that can be made. Price controls can help drive competition and affordability but infrastructure builders will need to be able to recover the costs of investment.
Ofcom’s research will be published in the Autumn and used to inform its position. Some believe a more flexible approach to regulation, something that the watchdog has been more open to in recent times, could be the way forward.
While nothing as radical as Labour’s 2019 call for the industry to be nationalised have been touted, there have been suggestions of a regulated minimum standard of fibre broadband or to give providers the ability to offer longer contracts with a reduced monthly tariff. The latter would ensure prices are more affordable while ensuring there are returns on investment – at the expense of consumers being tied into a longer deal.
Whatever form the post-Covid regulatory framework looks like, it is likely to be more of a collective process. The communications industry has had a traditionally poor reputation but its actions and performance during lockdown have significantly boosted its public image. This, along with increased demand for faster connections, is set to have a long term increase on revenues.
The industry’s input, along with that of government, will be necessary, in determining future regulation. For example, Citizens Advice says that wider governmental policies such as targeted debt relief for those who may never pay off debts incurred due to the lockdown may also be required.
“There is a trade-off between encouraging customers to invest and keeping services affordable,” added Rich Sullivan Jones, Audit Manager at the National Audit Office (NAO). “These kinds of trade-offs are not something that a regulator can or is intended to resolve on their own. It must work with governments on policy.”
The way we work, live and play after lockdown will be very different and the future structure of society and the economy is uncertain. One certainty is that the role of connectivity will play a critical role and that polices and regulations that maximise its potential and accessibility will be crucial to the post-Covid world.