ELECTRONIC COMMUNICATIONS BILL

EXPLANATORY AND FINANCIAL MEMORANDUM

INTRODUCTION

1. This Explanatory and Financial Memorandum relates to the Electronic Communications Bill. The Office of the First Minister and Deputy First Minister has prepared the Memorandum in order to assist with a proper understanding of the Bill and to help inform debate about it. The Memorandum does not form part of the Bill and has not been endorsed by the Assembly.
2. The Memorandum needs to be read in conjunction with the Bill. It is not, and is not meant to be, a comprehensive description of the Bill. So where a clause or part of a clause does not seem to require any particular explanation or comment, none is given.

BACKGROUND AND POLICY OBJECTIVES

3. The Electronic Communications Act 2000 empowers UK Ministers to make amendments to existing legislation in order to make electronic signatures and electronic storage of information acceptable for specific types of transaction.
4. The Electronic Communications Act 2000, which extends to all parts of the United Kingdom received Royal Assent in May 2000. The main purpose of the Act is to help build confidence in electronic commerce and the technology underlying it, by providing for

• An approval scheme for businesses and other organisations providing cryptography support services, such as electronic signature services and confidentiality services;

• The legal recognition of electronic signatures and the process under which they are verified, generated or communicated; and

• The removal of obstacles in other legislation to the use of electronic communication and storage, in place of paper.

5. The Act is in three parts:

• Part I, Cryptography Service Providers. This concerns the arrangements for registering providers of cryptography support services.

• Part II, Facilitation of Electronic Commerce, data storage etc. This makes provision for the legal recognition of electronic signatures and the process under which they may be generated, communicated or verified. It will also facilitate the use of electronic communications or electronic storage.

• Part III, Miscellaneous and Supplemental. This part amends Sections 12 and 46B of the Telecommunications Act 1984 and inserts a new Section 12A into that Act. The new provisions are concerned with facilitating the modification of telecommunication licenses. This part also concerns matters such as general interpretation, the short title, commencement and territorial extent of the Act.

6. Part II of the Act makes provision for Ministers of UK Departments and the devolved authorities in Scotland and Wales to make legislative amendments to provide for the legal recognition of electronic signatures and storage, but no provision has been made for such changes to be made in the context of a devolved administration for Northern Ireland.

PURPOSE OF THE BILL AND SUMMARY OF ITS MAIN PROVISIONS

7. The UK Act is a key element in the UK Government's overall strategy for the electronic delivery of government services to the public and in facilitating electronic commerce in the United Kingdom. The Departmental Ministers (the First Minister and Deputy First Minister) have agreed that Northern Ireland should be part of this revolution in the delivery of government services.
8. This Bill makes provision to allow Northern Ireland departments to modify legislation schemes, licenses, authorisations and approvals to facilitate the use of electronic communication and storage in transactions in the public and private sectors in Northern Ireland.

CONSULTATION

9. Details of the extensive public consultation undertaken before the introduction of the Electronic Communications Act 2000 are listed in the Annex to this document. Given the extent of UK-wide consultation and the non-contentious nature of the proposed Northern Ireland legislation, further local consultation is considered unnecessary.

OPTIONS CONSIDERED

10. Consideration was given to extending the Westminster Bill to Northern Ireland in the same way that it extends to Scotland and Wales. However, the usual convention in relation to Westminster Bills on devolved matters is that they do not extend to Scotland or Northern Ireland unless the devolved institutions have so requested.

The Northern Ireland Assembly was not yet in operation (or was in suspension) for most of the passage of the Westminster Bill and no proposal to extend the Bill to Northern Ireland was ever put to local Ministers or the Assembly. For this reason the Westminster Act follows the normal convention and does not extend to NI in relation to devolved matters.

OVERVIEW

11. The Bill has 5 clauses. Clause 1 contains the power to modify by order legislation and contains the substance of the Bill. Clause 2 makes provision as to Orders made under Clause 1. Clause 3 makes provision concerning the use of key escrow (an access and authorisation procedure). Clause 4 deals with interpretation of expressions used in the Bill and Clause 5 is the short title of the Bill.

COMMENTARY ON CLAUSES

Clause 1: Power to modify legislation

This power is designed to remove restrictions in other legislation which prevent the use of electronic communication and storage in place of paper, and to enable the use of electronic communications and storage to be regulated where it is already allowed. The power can be used selectively to offer the electronic alternative to those who want it.

There is a large number of provisions in statutes on many different topics which require the use of paper or might be interpreted to require this. Many of these cases involve communication with Government Departments by businesses or individuals - including submitting information or applying for licences or permits. Other cases concern communications between businesses and individuals, where there is a statutory requirement that the communication should be on paper. The power can be used in any of these cases eg in applying for a driver's licence, an applicant must make written statements regarding age and health. Following the implementation of this Bill Driver and Vehicle Licensing NI might change their own legislation to allow that statement and application to be made electronically.

Subsection (1) gives the appropriate Department the power to modify, by order made by statutory rule, the provisions of any legislation for which it is responsible. It may authorise or facilitate the use of electronic communications or electronic storage (instead of other methods of communication or storage) for any purpose mentioned in subsection(2). This power is limited by subsection(3) which places a duty on the appropriate department not to make such an order unless it is satisfied that the order will not result in arrangements for record keeping which are less satisfactory. It is also limited by subsection (6) so that a person cannot be required to abandon paper unless he has previously chosen to do so.

• The appropriate department is defined in Clause 2

Subsection (2) describes the purposes for which modification by an order may be made.

Subjection (4) specifies the types of provision about electronic communications or the use of electronic storage that may be made for in an order under this Clause.

Subsection (6) provides that an order under this Clause cannot require the use of electronic communications or electronic storage except when someone has previously elected or decided to make use of such communications or storage. When someone has previously chosen the electronic option, restrictions or conditions may be imposed on the variation or withdrawal of such a choice.

Clause 2: Orders under Section 1

This Clause sets out supplementary provisions relating to orders made under Clause 1 and contains standard provisions commonly accorded to powers to make subordinate legislation, such as an ability to make supplementary provision.

Subsections (3) and (4) provide that the regulations made under Clause 1 will be subject to a choice of either affirmative or negative resolution procedure in the Northern Ireland Assembly. It will be a matter for Departments to decide whether or not modifying legislation should be subject to the affirmative procedure in the Assembly having regard to the significance of the proposed changes.

Clause 3: Publication of Key escrow requirements

This Clause prohibits the imposition of a requirement to deposit a key for data (as defined in subsection (3)) with an intended recipient except where the person is the intended recipient. It prohibits the imposition of a requirement to deposit a key with any other person. Also in circumstances when a key for data is not deposited with a third party the holder of the information may be required to provide alternative means of access to the information in the event of loss or damage of the key.

Clause 4: Interpretation

This Clause contains definitions of words and expressions used in the Bill.

Clause 5: Short title

This Clause cites the intended short title of the Bill on becoming an Act.

FINANCIAL EFFECTS OF THE BILL

12. The Bill will not have any impact on public or private sector finance in that it does not require any department or business to use electronic means, to transact business, but facilitates such use.

EFFECTS ON EQUAL OPPORTUNITY

13. The impact of the Bill on equality of opportunity as between those groups listed in Section 75 of the Northern Ireland Act 1998 has been considered, and no adverse effects were identified. The provisions of the Bill should help promote equality of opportunity for all by adding another means of communication to be traditional methods of telephone, letter or personal visits.

HUMAN RIGHTS ISSUES

14. No human rights implications have been identified.

REGULATORY APPRAISAL

15. The Bill will have no detrimental impact on businesses.

IMPACT ON RELATIONS, COOPERATION OR COMMON ACTION ON A NORTH SOUTH BASIS

16. No adverse effect is indicated. Note that equivalent legislation was made in the Republic of Ireland in July 2000 (Electronic Commerce Act 2000 Number 27 of 2000).

LEGISLATIVE COMPETENCE

17. The First Minister and Deputy First Minister have made the following statement under Section 9 of the Northern Ireland Act 1998:

"In our view the Electronic Communications Bill would be within the legislative competence of the Northern Ireland Assembly".

ANNEX

CONSULTATION

1. Consultation on the matters contained in the Act was conducted on a UK-wide basis. Consultation on Parts 1 and 11 of the Act was conducted by the previous Administration in March 1997.
2. The Government announced its response to that consultation, and its policy on the provision of cryptographic services, in a parliamentary statement by Mrs Barbara Roche, then Parliamentary Under Secretary of State at the Department of Trade and Industry, on 27 April 1998. Hansard, HoC, Column 27; available on the Parliament website at www.parliament.uk/commons.htm.
3. A broader consultation "Building Confidence in Electronic Commerce: A Consultation Document" (URN99/642) available on the DTI website at www.dti.gov.uk/cii/elec/elec com.htm - was launched on 5 March 1999. A summary of the responses to this consultation (URN 99/891) is available on the DTI website www.dti.gov.uk/cii/elec/conrep.html.
4. The Trade and Industry Select Committee of the House of Commons published a report on the matters covered by the consultation document 'Building Confidence in Electronic Commerce' on 18 May 1999: "The Government's Proposals", available on the Parliament website at www.parliament.uk/comms/selcom/t&ihome.htm.
5. A draft of the Electronic Communications Bill was published as part of a consultation on 23 July 1999 in the document "Promoting Electronic Commerce" (Cm4417) available on the DTI website at www.dti.gov.uk/cii/elec/ecbill.html. This document also contained the Government's response to the Trade and Industry Select Report. A summary of the responses to this consultation (URN 99/1218) is also available on the DTI website.
6. On 3 November 1999, the Trade and Industry Select Committee of the House of Commons published a report on the draft Electronic Communications Bill (HC 862, also available on the parliament website). The Government responded to the Committee on 17 January 2000.
7. There have been three consultations on the revised license modification procedure provided for in Part 111 of the Act. The first "License Modification Procedure: Proposed Changes to the Telecommunications Act 1984" (URN 98/1049), was issued in May 1998; the second, "License Modification Procedure; Updated Proposals for Changes to the Telecommunications Act 1984" (URN 99/945) in March 1999 (further details available on the DTI website at www.dti.gov.uk/cii/regulation.htm. The third was undertaken as part of the consultation on the draft Electronic Communications Bill.