My Lords, I am pleased to move these regulations, which were laid before your Lordships’ House in draft on 15 December. This legislation represents a world first in international trade: the UK-Norway, Iceland and Liechtenstein free trade agreement contains the world’s first provisions regulating mobile roaming charges.
Most recent free trade agreements mention mobile roaming, but provisions in those agreements talk of co-operating or even endeavouring to co-operate. However, this free trade agreement takes a further step: actually ensuring the regulation of charges in order to make a real difference to Britons travelling overseas. It is an example of the innovative trade deals we can now negotiate, bringing real benefits to British travellers.
This legislation is necessary to implement domestically the UK’s international obligations under the terms of the agreement. Technically, the legislation implements the agreement’s provisions that regulate international mobile roaming wholesale charges.
As many noble Lords will appreciate, wholesale charges are what mobile operators charge each other, as distinct from retail charges, which are what they charge their customers. The wholesale charges Norwegian and Icelandic mobile operators can charge UK operators will be capped by their domestic legislation. The legislation we are debating will cap the charges that UK operators can apply to Norwegian and Icelandic mobile operators. The caps cover wholesale charges for mobile data, voice calls and text messages. The regulation of wholesale
charges in the agreement is with a view to facilitating surcharge-free international mobile roaming for British consumers to Norway and Iceland, as well as, of course, surcharge-free mobile roaming for Norwegians and Icelanders in the UK.
I note that the agreement’s provisions regulate mobile roaming wholesale charges between the UK and Norway, and the UK and Iceland. The agreement’s provisions do not apply to Liechtenstein. Therefore, this legislation is not relevant to that principality. That is because Liechtenstein decided to opt out, given its operators’ commercial relationships with Switzerland. Because of the topography and the limited geographical area of Liechtenstein, a significant part of its territory is supplied by masts from neighbouring Switzerland. I add that this legislation also ensures that Ofcom has the power to enforce the caps on wholesale charges.
Before I make way for the debate on this legislation, I will cover an issue that might form the basis of questions that noble Lords might have: the agreement’s coverage of wholesale, rather than retail, charges. The reason the agreement covers wholesale charges but not retail ones is that wholesale charges have to be covered by an international agreement. Wholesale charges are a cross-border issue; an international agreement is therefore required to cover them. UK legislation alone cannot bind the charges of Icelandic or Norwegian operators.
Retail charges can be covered by an international agreement, but they can also be covered by purely domestic legislation. This is because retail charges are between UK operators and their domestic customers. Retail charges are not a cross-border issue.
The parties concluded that this agreement should cover only wholesale charges, as these have to be covered by an international agreement. That the agreement does not cover retail charges reflects its light-touch regulatory approach. It will ensure that UK operators are protected from high wholesale charges from Norwegian and Icelandic operators. It is therefore expected that those UK operators who surcharge their customers roaming in Norway and Iceland will react at the retail level by reconsidering their approach and moving to surcharge-free services.
While the agreement is light touch in its regulatory approach, let me be clear: one of the key, publicly stated achievements of the agreement was to keep costs low for holidaymakers and business travellers in Norway and Iceland. The Government are committed to delivering that aim. They therefore expect UK mobile operators which are surcharging to reconsider their approach. If they do not, the Government have the capacity to intervene.