Who’s Who Legal brings together six leading experts from Denmark, England, Singapore, Brazil and the UAE to discuss issues facing telecoms and media lawyers and their clients in the industry today.
Martin André Dittmer: In Denmark we have seen this trend, which is why we at Gorrissen Federspiel have established a cross-practice TMT group where experts within different areas of law, but focusing on TMT-type clients, take part. Niche firms doing only TMT would often have to go to other firms to obtain advice on competition law in relation to TMT, etc.
Tony Ghee: As the regulatory emphasis has shifted from sector-specific regulation to a more competition-based approach, the need to have an understanding of competition law, especially in the telecoms sector, is essential. While an understanding and experience of M&A transactions is obviously helpful, I don’t think it is as essential. At the moment, perhaps a thorough understanding of the procedures of the Competition Appeals Tribunal may be more relevant for a telecoms specialist. The largest operators are buying in expertise from their legal advisers and will not normally expect their nominated M&A adviser to also be the sector expert. However, it goes without saying that they will expect the M&A adviser to be generally aware of the issues facing the sector, even if they lack the expertise or experience to deliver the advice.
Chia Voon Jiet: Telecommunications and media are areas where lawyers with a diversified practice are of great value to clients. In fact, I would regard expertise in competition law as invaluable for a telecommunications or media lawyer. With de-monopolisation and the entry of new players, telecommunications and media regulation has become intrinsically linked with competition policy. Using Singapore as an example, competition law was introduced in the telecommunications and media sectors well before general competition law was even enacted, which underscores the importance of competition issues in these sectors. Having said that, I do not think that having specific expertise in competition law or other areas is a necessity for a telecommunications lawyer, but certainly one has to be sufficiently aware of such issues and have access to the relevant expertise in order to ensure that the advice rendered is holistic.
Karin Alvo & Guilherme Ieno: It always brings positive feedback when telecoms lawyers have additional knowledge in other fields such as tax, corporate and competition law. However, they should also keep focused on the daily developments of the telecoms framework in order to deeply assist their clients. Sometimes clients prefer to work with two lawyers to be assured that one of them is entirely specialised in the telecoms market, especially when we are dealing with specific and delicate industries, such as the satellite industry (which we often deal with). We do not see this as a change in the definition of telecoms lawyers, since additional legal knowledge can be found (and is considered as a positive skill) in many other specialist lawyers, and is not limited to telecoms.
Eamon Holley: My answer might be a bit biased. Because I started my telecoms career working with Bahrain’s telecoms regulator, which was actively opening up a liberalising telecoms market, I have been working with competition law and mergers and acquisitions approvals from day one, just over 10 years ago. Other lawyers who don’t work so closely with regulation – for example, lawyers mainly focusing on commercial transactions – may not need to address these issues as regularly, but I think a working knowledge of competition law and M&A approvals is advantageous. However, as the issues faced by the telecoms sector are expanding, it is now absolutely vital for any lawyer working within it to also expand their skillset into “non-traditional” telecoms fields, such as data protection and data transfer, cloud computing, cybercrime and the internet of things. I doubt that in another 10 years telecoms lawyers will describe themselves as such.
Martin André Dittmer: We have a devoted team advising clients on data sharing and similar legal challenges. As elsewhere in the EU, the rules and EU Court practice have a direct impact on our clients. We have chosen to incorporate the new rules into our corporate compliance services that we offer to our clients.
Tony Ghee: It is axiomatic that the media, and telecoms sectors have, in the recent past, been continually in a state of flux as the evolving technology requires all industry players to re-evaluate their corporate strategy to meet both the changing market and consumer expectation. The regulatory and legislative framework is not exempt from this pressure to change. One very recent example is the decision of Ofcom to assume direct responsibility for the regulation of video-on-demand services in the UK from Authority for Television on Demand from the beginning of 2016. As few VOD services are profitable, any change in UK regulatory structure creates uncertainty, even one as seemingly innocuous as this change. Given that the regulatory style of Ofcom is likely to be more interventionist than ATVOD’s, inevitably there is likely to be some VOD operators who may look to relocate their services to the jurisdiction of another EU member’s state.
Increasingly many of the “leftfield” legal bombshells have come out of the European Court. Recent examples include the series of copyright cases starting with Murphy v FAPL; and in a privacy and data protection field, include the Google “right to be forgotten” decision, ending with the recent ruling outlawing the US safe harbour decision. In terms of providing advice to operators impacted by such decisions, the aim is always to be as practical as possible. For example, in the copyright field, the judicial trend is clear – the single market and competition law trump copyright law where the two legal disciplines collide. Inevitably, the nature of the advice depends on the business of the client – for example, a copyright owner will be keen to ensure that the existing distribution model of territorial and rights segmentation can continue. The answer is yes, for now. For those distributors which are merely buyers of content, the answer is also the same: the existing distribution model remains largely intact for now. However, there is little doubt of the direction of travel favoured by the European Commission and the European Court, as they perceive the European Union to be a single digital distribution market and will not allow copyright owners to use copyright law to thwart it. Therefore the status quo is unlikely to last indefinitely.
Chia Voon Jiet: One fairly recent development in Singapore is the introduction of personal data protection laws which came into force in 2014. The telecommunications and media industries are not spared from this development as participants in these sectors routinely collect and retain large amounts of confidential personal data. It also introduced a new regulator in the form of the Personal Data Protection Commission. On the media front, online news sites have also become subject to a licensing framework when they were previously unregulated. When advising on such matters, it is critical to develop a good understanding of the broader policy objectives underpinning the legislation or guidelines. The boundaries of the law, including any grey areas, should be carefully explained to clients so that they can make informed decisions. A good rapport with regulators can also pave the way towards clearing up some of these uncertainties.
Karin Alvo & Guilherme Ieno: Yes, the Internet General Act (Federal Law 12.695) was enacted last year and foresees obligations to many industry sectors, such as telecoms, internet service providers, internet applicative providers, etc. Our privacy rules have also changed and our clients are adapting their privacy policies. Case law, international legislation/regulation, and legislation applicable on similar situations are the alternatives we have in order to best advise our clients on still non-legislated issues.
Eamon Holley: In the Arabian Gulf it can be challenging to keep abreast of all the latest developments. There are multiple jurisdictions and not all proposed laws or changes to laws are publicly consulted upon. You therefore need to rely on your own eyes and ears, network of contacts and, as in DLA Piper’s case, knowledge management team, to keep up to date on regional developments. Things that have been recently on the horizon in the region include proposed data protection laws, amendments to national telecoms laws and the establishment of an independent telecommunications regulator in Kuwait. However, as the telecoms sector is a global one, and many of our clients are global, if an issue is affecting the sector or a client in one part of the world, it is only a matter of time before it affects our clients in another part of the world. Being part of a global firm like DLA Piper allows our telecoms lawyers to exchange regularly on updates, trends and ideas from around the world. This helps us to stay one step ahead of curve. I think of it as one large conversation that you can never stop!
Martin André Dittmer: It is also a trend we see in Denmark where the bigger corporate firms have entered TMT in a more strategic and focused way to the benefit of competition. In Gorrissen Federspiel we have done this by establishing our cross practice group thereby coordinating and centralising our knowledge within the industry. We see somewhat similar approaches from the other major law firms.
Tony Ghee: Corporate and dispute resolution lawyers have always been active in the sector, However, of late corporate lawyers have been the beneficiaries of the dash for consolidation as the impact of convergence moves from the conference circuit into the home. One example where M&A lawyers have benefited is the strategy pursued by ITV to become an international content owner and distributor as it seeks to ameliorate the long-term effects of falling advertising revenues in its core broadcast business. Pursing this strategy has involved a constant stream of acquisition of production businesses in the UK and internationally. Another example is AT&T’s recent acquisition of DirecTV. But such deals are not unique – although 15 years ago, at the height of the last tech bubble, AOL merged with Time Warner. We all know how that ended up. But I guess in terms of the corporate work, the cautious would advise that the M&A work in the sector can be cyclical. But what is different now, is that the technology works and in terms of content the consumer wants and increasingly expects it to be delivered to them anywhere, anyhow and at any time. As a result operators in the sector (whether they be telecoms, technology companies or traditional media businesses) have to position themselves to be able to satisfy that demand.
In terms of dispute resolution, there has always been litigation – in the media sector these disputes have traditionally been about how rights are owned or exploited, defamation or trademark disputes etc. Those type of disputes continue – but where there has been a change is in the telecoms sector – the decision at a European level to mandate a review of certain decisions of the national telecoms regulator has had a major impact in the UK. Certain of Ofcom’s decisions in the telecom field have been subject to a full appeal on the merits before the Competition Appeals Tribunal. Inevitably, this has frustrated Ofcom as there is little doubt that some CAT appeals are merely gaming by one or other operators. The jurisdiction questions alone can be complex and have been the subject of much High Court litigation. As a result there has been pressure put on the government to limit the right of appeal in telecoms matters to judicial review which would mean that the appellate rules for telecoms would again match up with the rules that apply to most of Ofcom’s decisions under its broadcasting remit. To date this pressure has not succeeded. However it is also have true that a merits review process has required Ofcom to up its game and consider the full ramifications of its decisions as no regulator enjoys being second-guessed or criticised. Nonetheless it has been boon time for certain law firms and barristers paid to argue these appeals often on technical and seemingly obscure points.
Chia Voon Jiet: It is only natural and healthy for more firms to branch out into these sectors as the market grows and matures, and I observe this to be the case in Singapore. It certainly adds to the competition in that clients now have more options available when it comes to appointing external counsel. Nevertheless, firms that have been active in this sector since day one will have a distinct advantage due to their familiarity with the local regulatory environment and the expertise that has been acquired over the years at all levels of seniority. In this respect, I am fortunate to be in a firm that has been at the forefront of telecommunications and media law since the early days. I believe this is how we distinguish ourselves from the competition, and I think clients do recognise that the experience we bring to the table is invaluable.
Karin Alvo & Guilherme Ieno: Yes, especially in regards to dispute resolution not connected to deep telecom discussions, but mainly to consumer complaints and general commercial disputes. This may be affecting those involved in this market, which is not our case (dispute resolution comes from telecom practice to litigation and not otherwise). With regards to corporate and telecom practice, the works in our firm flow in both ways.
Eamon Holley: Yes and no. The additional competition is also a reflection of telcos developing into multifaceted businesses with more challenges than they have had before. But telecoms companies want to discuss issues quickly and not have to educate their lawyers at each turn. They need lawyers that already know their sector and the issues that they face. In something as technically and economically complicated as telecoms law and regulation this knowledge takes a long time to accumulate and build. There may be more firms in the space, but the investment of time required to become an expert isn’t going away. A telecoms company may pick a law firm because it has a reputation in, say, finance; but then that means that the company is looking for a finance lawyer for a particular transaction. The question is: is that finance lawyer focused on the telecoms sector, or does she or he work with a firm that focuses on the telecoms sector? If you want to specialise in the telecoms sector then you as a lawyer, and as a firm, must really specialise in it. In my view there are still only a number of law firms that are “go-to” firms for telecoms.
Martin André Dittmer: There has been no particular change in the size and composition of the TMT companies’ in-house functions in Denmark.
Tony Ghee: The shift by major operators to employ a large and well-resourced in-house legal team continues unabated. Inevitably this has meant that much of the bread-and-butter work for those clients has disappeared. Large clients often now use me for specialised advisory work – for example whether a programme or advert complies with the relevant Ofcom rules, or the impact of a particular clause in a contract (rather than negotiate the whole contract). On the other hand, these clients continue to use other specialists of our firm (such as dispute resolution or employment) but are often keen to know that the firm contains the industry expertise inhouse which means that the “dumb” and not so “dumb” questions can be asked and answered internally and not reserved for them.
On the other hand, the changing nature of the technology and the industry means that there are always new entrants who need to “buy in” the expertise – for example I have spent a lot of time in the last couple of years advising a Scaninavian operator on the launch of its video-on-demand and electronic-sell-through services and in particular the acquistion of content from the Hollywood studios. Therefore, to some extent, it remains true that the more things change, the more things stay the same.
Chia Voon Jiet: It is heartening to know that demand for high-quality lawyers to move in-house to large telecoms firms has not waned, as this means that demand for in-house legal services in this sector remains healthy. This is a reflection of a mature, competitive, and dynamic market. I view this as a win-win proposition – lawyers now have more options than ever before, and firms acquire specialist in-house capability in the process. I do not necessarily think that this has directly resulted in a difference in terms of the work that we perform for clients.
Karin Alvo & Guilherme Ieno: We do not notice this as a great shift in the Brazilian telecoms sector, and therefore we are not able to clarify if and how it affects our practice.
Eamon Holley: Many in-house lawyers are specialists who have that deep telecoms sector knowledge we were discussing before. They often have come from excellent firms that specialise in the sector and are very well trained. Not only that, but they are a fixed cost to the business and will know their client like the back of their hand. That is hard to beat! For this reason I believe that if you are a private practitioner the true key to success is to complement the in-house lawyers’ skill set. Easier said than done. But this is probably the best example of how the traditional business model of a law firm has been disrupted and why lawyers and firms now need to continually set themselves apart from each other, and their own clients. What is it that you and your firm can bring, that your client and their in-house lawyers actually need?