Friday, December 23, 2016

United Kingdom – Scottish Government plans for independence, splitting the single telecommunications market and requiring new regulators

The Scottish Government has published its plan for Brexit, which amounts to a massive shopping list of further devolved powers, so much that there would be nothing left for Westminster or Whitehall. A possible exception is defence, on which the Scottish National Party (SNP) violently disagrees with the UK government. The choice it offers is independence in name or independence called something else.

Its preferred option for Scotland is independence from the United Kingdom and membership of the EU, though it is scarcely expanded on. This is despite the implication of the application for Article 50 TEU finally destroying the fiction of an EU membership route via Article 48 TEU. The only mechanism after Article 50 had been invoked would thus appear to be accession via Article 49 TEU, which might take several years, indeed the application would probably not be possible until independence had been completed  (i.e., after a referendum and full transfer of powers). For the present, the polls suggest that a referendum on independence would fail. The effects for telecommunications are an entirely new system of governance, with ministry and policies, regulatory authority and market analyses, appellate body and parliamentary oversight committee, with new licences for all operators.

Its second best option is for the UK to remain in the EEA, the famous ‘Norway option’. This is so close to the status quo as to require little comment, other than that it seems hardly to be Brexit at all. For the purposes of telecommunications the effects are limited, primarily downgrading of the United Kingdom from an influential player in the European Parliament and Council to being a registered lobbyist. It would also be downgraded in the European regulatory networks (ERNs).

Its third best option, and much the most convoluted, is for the UK to leave the EU and for Scotland to join (or remain) in the European Economic Area (EEA) and European Union Customs Union (EUCU). The required devolution of powers to Scotland looks like dominion status or the Irish Free State (Eire). For telecommunications it requires splitting the single UK market, including all existing licences, and the creation of a new regulatory authority and system of appeals. It would also require a Scottish competition authority. The issue of data protection is more complex, but should the UK vary its regime from the General Data Protection Regulation (GDPR), then moving personal data between Scotland and England (e.g., within a bank or supermarket chain) would seem to require some special legal framework. This proposal looks contrived, supported by references to the treaty status of the Channel Islands, Faroe Islands (Føroyar), Liechtenstein, and Spitsbergen.

No attempt was made to consider how long it would take to put in place the necessary legislation and institutions for the options. In particular, there would be an increase in workload for the Scottish Parliament, perhaps doubling or tripling its present activities.


Ewan Sutherland (2013) “Independence and the regulatory state - Telecommunications in Scotland and the rest of the United Kingdom” Telecommunications Policy 37 (11) 1046-1059.

Ewan Sutherland (2017) “The implications of Brexit for the governance of telecommunications markets in the United Kingdom” Digital Policy, Regulation and Governance, in press

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