Digital News Bytes November 2021
Our Comment
US 5G delay due to aviation frequency interference concerns – AT&T and Verizon have been forced to delay commercial rollout of their 5G networks in the US in the newly licensed midband or “C Band” frequency band until the New Year, as a result of concerns raised by the US aviation regulator about the potential interference of onboard 5G signals with flight safety equipment. This follows similar concerns raised in the Summer by the Candian aviation regulator. Whilst the implementation of 5G faces many interoperability challenges, and AT&T and Verizon have agreed to “voluntarily pause” their commercial rollout as a result of the concerns raised, the potential for any frequency interference of this kind could have been foreseen and could have been addressed earlier through greater cross-co-operation between the aviation and telecoms sectors prior to reallocation and licensing of the C Band.
Cryptoassets and tokens – which UK FCA category? As cryptocutrrencies and initial coin offerings continue to grow in popularity, owners, investors and issuers need to be aware of the regulatory approach of the UK financial services regulator, the FCA, and its categories for those tokens which will require compliance with the UK’s financial services regulation. The FCA’s regulatory scrutiny of this area has resulted in it issuing a series of warnings over the last several months in relation to investments in cryptocurrencies and NFTs.
UK Telecoms Security Bill becomes law – The provisions of the UK Telecoms Security Bill have been brought into sharp focus since its introduction last year, following the Government’s controversial removal of Huawei equipment from the UK’s 5G networks on the grounds of network security, and the powers subsequently enshrined in this Bill for similar action to be carried out in the future. Now it will be critical for public network providers to undertake the high level of compulsory testing contemplated by this Bill to maximise security. It will also be vital that Ofcom, as the regulator endowed with regulatory oversight, boosts its internal expertise in this area as planned – effective co-operation with industry in the implementation and proportional enforcement of the wide-ranging provisions of the Bill will be the real key to raising network security and supply chain standards.
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US 5G delay due to aviation frequency interference concerns – According to a joint announcement by the US Federal Aviation Administration and the Federal Communications Commission earlier this month, AT&T and Verizon will “voluntarily pause” the commercial deployment of a new 5G network in the C-band. Concerns have been raised about the potential for interference of 5G signals operating in the 3.7-4.2Ghz band with onboard radio altimeters (measuring the altitude of a plane and assisting with safe landing).
These US regulatory agencies will “further assess any impact on aviation safety”, and have pledged to “co-ordinate closely to ensure that the United States keeps pace with the rest of the world in deploying next-generation communications technology safely and without undue delay”. This announcement follows closely on the back of similar concerns raised earlier this year in the Summer by the Canadian aviation regulator.
Interestingly, Canada and the US pushed for a new frequency band of 3.7-4.2Ghz – “the C Band” – to be allocated as 5G frequency in the last ITU World Radiocommunications Conference in 2019. The aviation regulators of both countries have now expressed concerns in relation to potential interference with onboard airplane sensors known as altimeters operating in the 4.2 to 4.4 GHz band. If there is indeed a potential for 5G midband interference with US and Canada aviation safety services, then why wasn’t this addressed by cross-sector regulatory co-operation and thorough testing in the C Band prior to the spectrum being reallocated for 5G use and assigned to AT&T and Verizon?
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Cryptoassets and tokens – One of the major issues facing cryptocurrencies and companies making initial coin offerings (ICOs) and/or initial securities offerings (ISO) is which category of token it falls into. Not all will be familiar with the differences between the different types of cryptoassets and tokens, including what has popularly become known as NFTs (or Non-Fungible Tokens), let alone which fall within the regulatory purview of the UK’s Financial Conduct Authority (FCA).
The three categories identified by the FCA are: unregulated (including utility and exchange tokens), e-money and security tokens. The latter two token types fall within the FCA’s regulatory perimeter and would in most cases (depending on the features and purpose of the token) be considered a specified investment. These would be subject to regulations and governance by the FCA, most notably is FSMA 2000 and FSMA (RAO) Part III 2001 which define and govern most areas of securities and/or Electronic Money Regulation 2011.
It is vital that companies that launch tokens that do fall within the FCA’s regulatory perimeter are aware of their regulated financial services position and notify the FCA to ensure no negative ramifications occur in the future that might impact the trading of or investment in these assets.
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UK Telecoms Security Bill becomes law – Now enshrined in law, the Telecoms Security Bill is a positive step towards maximising the security of our public networks in the digital age we now live in. It has been mired in controversy since the UK Government’s announcement last year that it would be introducing a bill to formalise powers for the government to take action on the use of high-risk vendors on the grounds of network security, having already decided on the removal Huawei equipment from 5G networks on these grounds.
Controversies aside, though, the bill aims to enhance the security of public networks, introducing stringent new security and supply chain diversity measures, in particular a compulsory new testing regime for public service providers to ensure the security of their networks. Providers will also need to “monitor, analyse and audit” communications signals on their network (but not content) “for the purpose of identifying the occurrence of any security compromise”. Failure to comply will result in fines of up to up to £100,000 a day, with a maximum penalty of £10million. The Bill’s provisions are wide-ranging, and the cost implications of complying with the required measures are significant. Ofcom – as the relevant regulator tasked with implementing and enforcing the Bill – will need to work together with industry co-operatively and approach its decision-making proportionately. It is good news, therefore, that Ofcom has announced it will be recruiting cybersecurity experts to bolster its internal network security expertise.
Just by way of postscript, the Telecoms Security Bill is not to be confused with the latest announced cybersecurity bill, the new Product Security, Telecoms Infrastructure Bill, which is aimed at protecting internet-enabled consumer tech products from cyberattack, including phones, tablets, smart TVs and other internet-connected devices.
