A Short Note on Telecommunications in Scotland - Devolution and Independence

In January 2012 the Westminster government offered to devolve to the Scottish Parliament the powers necessary to conduct a referendum on the independence of Scotland, with the possibility of repealing the Act of Union of 1707. This could return Great Britain to a Union of the Crowns, with separate parliaments under one sovereign. The alternative, the status quo, is a complex, asymmetric and pseudo-federal system with a UK Parliament and a Scottish Parliament, with most of the instruments and agencies of the regulatory state associated with but at arm’s length from Westminster and Whitehall. There is also a straw man, a third way, sometimes known as “Devo-Max” in which economic powers are devolved to the Scottish Parliament. The present arrangements are the European Union legal framework, transposed for the UK as the Communications Act, implemented by the Office of Communications with appeals heard by the Competition Appeal Tribunal. The administration in Edinburgh and local authorities can support local broadband initiatives through grants or aggregated purchasing. In Devo-Max economic policy, regulation and licensing might be devolved to Scotland, though the structures and processes are poorly formulated. Under independence, while some unrelated UK institutions would be retained, Scotland would obtain its own international dialing code and top level domain, plus national competition and regulatory authorities. It would have to create a new regulatory state. Licenses and general authorizations would be split for Scotland and the rest of the UK, with the option of modifying the contents. Given the smaller size of the population and the lower population density, new and lower coverage targets would have to be developed or higher subsidies offered. The principal challenge of independence is to devise ways to make the transition from one regulatory state to another that is rather smaller. This appears to be a novel problem. The changed economic circumstances of being a new, smaller and less densely populated market might cause some operators to reconsider participation on the market