Standards, protections, and compliance

Comms Business examines how the regulatory landscape is evolving and how channel companies can ensure their voice is heard when key policies and legislation are being developed.

The channel must constantly navigate the evolving regulatory landscape, with new technology rules and service obligations emerging at regular intervals. Keeping pace with these developments is critical so that resellers, MSPs and distributors can stay compliant and meet customer needs.

The developments that channel companies should be aware of in 2023 are broad and varied, and one key area is security. Security has found itself under the microscope following several high-profile data breaches and ransomware attacks, and because of the emergence of so-called “nation-state threat actors”.

These are people or groups who use their technology skills to facilitate hacking, sabotage, theft, misinformation and other operations on behalf of a country, with perceived or confirmed instances being reported as international political tensions rise.

Oliver Helm, CEO, FullFibre, explained, “UK government, the regulator and the ICO are now looking in detail at the security of networks, and not just those of operators. The Product Security and Telecommunication Infrastructure Bill got royal assent in January, and has wide ranging implications.

“Communications providers taking layer 2 services need to carefully consider their obligations under the bill – penalties for noncompliance can be high. And Ofcom and the ICO are known to be working closer together.”

James Jenkins, sales engineer for cybersecurity at Nuvias Group, an Infinigate company, also discussed the advancement of cybersecurity rules and regulations.

He said, “Advances in cybersecurity legislation, with increasingly stringent requirements are likely to result in increased cybersecurity budgets in 2023 and beyond.”

He pointed to Canalys’ latest cybersecurity forecasts, which found that global cybersecurity spending, including enterprise products and services, will increase by 13.2 per cent in 2023 and remain a key growth sector for channel partners.

In the UK, for example, cybersecurity is likely to be boosted by new cyber resilience legislation, including a £2.6 billion initiative to strengthen the UK’s resilience to cyberattacks. Furthermore, Jenkins said that the EU intends to invest €1.6 billion in cybersecurity through to 2027 as part of its ‘Digital Europe’ programme.

He added, “Businesses will be motivated and incentivised to strengthen and upgrade their cybersecurity defences. The channel has a big opportunity to play a key role in these developments to advise and assist organisations in selecting, deploying and managing cybersecurity detection and remediation.”

“We have gone through Wi-Fi 2, 3, 4, 5 and 6, and we’re already talking about Wi-Fi 7. The speed of change and demand over Wi-Fi driven by the fact that as more and more things go wire-less, people change the way they deliver those services. So we really need to finance networks differently, and that’s why network as a service is a real boon to managed service providers.”

One Touch Switch

Another piece of legislation that the Channel needs to be aware of is One Touch Switch. This new process builds on an Ofcom rule change from 2015, whereby customers switching between providers such as BT, Sky and TalkTalk on Openreach’s copper network can follow a process where their new provider manages the switch. The introduction of a new ‘one touch’ process for all broadband and landline customers extends this principle so all residential customers can switch provider by contacting a new provider.

FullFibre’s Helm expects this new approach to create opportunities within the Channel. He said, “Whilst this is currently really only targeted at the residential market, there are some big opportunities for business-focused service providers to try and leverage.

“The ‘broker’ for the system behind this is TOTSCo, but they’ve indicated that the platform will not be ready by the April deadline outlined in the ECC, making anyone with a retail offering technically in breach.

“Ofcom has acknowledged this, but suggested that service providers need to evidence that they are working to implement a solution as soon as the platform is available, or they could face regulatory action.”

Pricing protections

Attention is also being paid to pricing and contracts as rising inflation and the cost-of-living crisis continues to bite. In February, Ofcom announced a review that will examine whether inflation-linked mid-contract price rises give phone and broadband customers sufficient certainty and clarity about what they can expect to pay. The regulator said this review will examine whether tougher protections are needed, with initial findings expected later in the year.

Also, during February, Ofcom opened a consultation on a pricing offer for full fibre broadband that Openreach intends to introduce. The regulator delayed its decision on that as the consultation raised issues which require further assessment. Ofcom had planned to publish a final decision on the consultation by the end of March 2023.

It now anticipates that it will take an additional two months to undertake this further analysis and issue a final decision. Some companies within the Channel believe the implications of Equinox 2 need to be examined.

Greg Mesch, CEO, CityFibre, said, “Ofcom appears to be taking industry’s concerns seriously. Taking more time to properly consider the impact of Equinox 2 is the right approach if UK consumers and businesses are to benefit from a healthy competitive market for the long term.”

Helm, from FullFibre, said, “It is common knowledge that the market is getting more competitive, but there are some risks in this. Equinox 2 promises a slight price reduction to communications providers, but the loyalty mechanics have a sting, and potentially a substantial cost. If you are an operator with a legacy copper base, it’s vital to engage in the consultation with Ofcom on this.

“Altnets like FullFibre offer a big first mover advantage to communications providers, but Equinox could increase the costs of doing business with Openreach. Additionally, in-contract price rises are under scrutiny. Ofcom is digging deep into these at a time where inflation is hurting both businesses bottom lines and consumer disposable income.

Security and privacy

When asked what topics or issues he expects to dominate the regulatory landscape in the near term, Jenkins, from Nuvias Group, said, “Security and privacy regulations are set to continue to dominate. Companies must remain on top of the latest changes, and the channel, to assist businesses in adopting a robust cybersecurity posture and safeguard data in compliance with local legislation.

“One major issue that channel companies should be mindful of is the business implications around data sharing across jurisdictions, in particular the US and EU. The US Federal Government and the EU recently committed to the Trans-Atlantic Privacy Framework which sets out the legal mechanism for the transfer of data between both markets. Meeting these requirements can be complex and require specialist help from the channel, and the agreement will no doubt be tested as EU regulations tighten.”

A helping hand

Engaging with government and keeping pace with evolving legislation and regulations can be difficult for channel companies to navigate. Guidance from trade associations can be hugely helpful, with organisations including FCS, Comms Council UK and the ITP ensuring their members are part of the conversation.

FullFibre’s Helm explained how channel companies can make the most of their relationship with trade associations, whilst also playing a direct role where necessary.

He said, “Trade associations give smaller players the opportunity to work with the larger ones. Associations like ISPA bring together the smallest WISPs all the way up to Openreach, with their teams of political and regulatory specialists. In short, they help unify the industry voice.

“It is really important not to assume they will do it all though: direct engagement is vital to changing or steering regulatory and political direction of travel.”

Nuvias Group’s Jenkins added, “Keeping on top of compliance and regulatory frameworks is important. Trade associations and the channel can ensure best practices.”

Access to expertise

Knowing when it is time to hire a dedicated regulatory or public affairs professional to support a company’s interests in this space can be important, and the leadership team should take a strategic approach here.

Helm, from FullFibre, said, “The right time is a factor of your turnover and the type of infrastructure you run. The space is becoming more fundamental to communications providers business plans, particularly those planning aggressive growth.

“A dedicated professional may not be the answer though. There are a handful of very specialist consultants that tend to work with groups of communications providers, giving the advantages of both consistent, unified output, and cost savings against work for a group of similar entities.”

Jenkins, from Nuvias Group, added, “International businesses are obliged to comply with many, yet differing, legislations, and so must fully understand the regulatory nuances in local markets. In these circumstances, it might be appropriate for channel companies to hire specialist legal counsel to ensure correct compliance across the organisation.

“Privacy laws, for example, may seem uniform at first glance, but the fine print can highlight significant distinctions. And companies compliant with the CCPA in the US might require procedural adjustments to meet GDPR requirements in the EU, as GDPR has a much broader scope than the CCPA.”

The voice of the channel

What is critical is that the voice of the channel is heard within broader technology discussions, so regulations do not miss a particular implication or have an unintended impact. Jenkins, from Nuvias Group, discussed the significance of the meaningful partnerships across the Channel.

He said, “Channel companies must adapt and respond to the external economic and geopolitical factors impacting businesses if they want to be heard within the broader technology industry. Ensuring close ties with partners and suppliers is critical to meeting the fast-changing needs of organisations and addressing current challenges such as supply chains and semiconductor shortages.

“Becoming part of a diverse partner network enables channel companies to intercept digital transformation trends that accelerated as a result of the pandemic and offer in-demand technologies such as cybersecurity capabilities. Furthermore, adopting subscription-based, as-a-service offerings helps the channel broaden its customer base by offering more affordable solutions to more organisations.

“Taking these steps will heighten awareness of channel companies and offer them the means to be heard within broader technology discussions. Finally, joining industry bodies such as the Global Technology Distribution Council, the world’s leading consortium of distributors, will help elevate the channel’s position across multiple markets.”

Now is the time to get involved and take action. Helm, from FullFibre, said, “So much of Government and business agendas are underpinned by the assumption of a resilient, ubiquitous and competitive telecoms environment. However, engaging with and lobbying government – at all levels – and the regulator is vital. If the industry doesn’t engage on topics now, it can’t really have a say later.”

This feature appeared in our April 2023 print issue. You can read the magazine in full here.