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THE GIBRALTAR REGULATORY AUTHORITY

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									THE GIBRALTAR REGULATORY
        AUTHORITY

       ANNUAL REPORT 2010 / 2011




          R A D I O C O M M U N I C AT I O N S



          C O M M U N I C AT I O N S



          D ATA P R O T E C T I O N



          S AT E L L I T E



          GAMBLING




                Suite 603 Europort
                     Tel: 20074636
                    Fax: 20072166
                        www.gra.gi
This page is intentionally left blank...




Gibraltar Regulatory Authority Annual Report 2010 / 2011
                                                                                                        Table of Contents
                                                                                                                               I
TABLE OF CONTENTS

CHIEF EXECUTIVE OFFICER’S STATEMENT                                                                                    1

Introduction............................................................................................................2
Organisation & Staffing.........................................................................................2
Electronic Communications.................................................................................3
Satellite Co-ordination..........................................................................................3
Data Protection.....................................................................................................4
Gambling...............................................................................................................4


COMMUNICATIONS                                                                                                         5

Introduction............................................................................................................7
The Electronic Communications Regulatory Framework...................................7
Price Cap Control Compliance.............................................................................8
Accounting Separation Report (ASR)..................................................................8
Other Regulatory Matters.....................................................................................10
Conferences..........................................................................................................13
Work Programme.................................................................................................14


STATISTICS                                                                                                             15

Voice Traffic Breakdown.......................................................................................16
VoIP Services........................................................................................................17
Mobile Services.....................................................................................................19
Internet Access Services......................................................................................22


RADIOCOMMUNICATIONS & I.C.T                                                                                            23

Gibraltar Spectrum Management.........................................................................25
Maritime.................................................................................................................29
Terrestrial...............................................................................................................31
Interference & Inspections....................................................................................34
International Responsibilities...............................................................................37
Work Programme.................................................................................................39




                       Gibraltar Regulatory Authority Annual Report 2010 / 2011
      Table of Contents
II
     TABLE OF CONTENTS

     SATELLITE                                                                                                                 41

       Satellite Co-ordination..........................................................................................41


     DATA PROTECTION                                                                                                           47

       Data Protection Register......................................................................................49
       International Participation.....................................................................................50
       Audits.....................................................................................................................51
       Case Studies.........................................................................................................54


     GAMBLING                                                                                                                  61

       Regulatory Framework.........................................................................................63
       Regulating the Industry.........................................................................................64
       The Industry in Gibraltar.......................................................................................72
       Work Programme.................................................................................................74
       Operators & Licences...........................................................................................75


     ANNEX                                                                                                                     77

       Organigram...........................................................................................................78




                                            Gibraltar Regulatory Authority Annual Report 2010 / 2011
                                                                    CEO Statement
                                                                                    1
CHIEF EXECUTIVE OFFICER’S STATEMENT




INTRODUCTION                                                             2


ORGANISATION & STAFFING                                                  2


ELECTRONIC COMMUNICATIONS                                                3


SATELLITE CO-ORDINATION                                                  3


DATA PROTECTION                                                          4



GAMBLING                                                                 4




         Gibraltar Regulatory Authority Annual Report 2010 / 2011
       CEO Statement
2
    Introduction
     This Annual Report of the Gibraltar Regulatory Authority ("GRA") is prepared in
     accordance with Section 12. (1) of The Gibraltar Regulatory Authority Act 2000 and
     covers the period 1st April 2010 to 31st March 2011.


    Organisation & Staffing

     The GRA has a total staff of nineteen and is divided into six Divisions: electronic
     communications; satellites; radiocommunications & ICT; data protection; gambling;
     and administration.




                                        Electronic
                                      Communications
                                         Division


      Data Protection                                                                Satellite
         Division                                                                    Division



                                          GRA

        Gambling                                                           Radiocommunications
         Division                                                                 & ICT
                                                                                 Division


                                         Administration
                                           Division




                Fig 1.00 chart showing regulatory responsibilities of the GRA


     An organigram of the GRA is annexed to this report.




                              Gibraltar Regulatory Authority Annual Report 2010 / 2011
                                                                           CEO Statement
                                                                                           3
 Electronic Communications
The GRA regulates the following transmission networks:

       Traditional telephone wire
       Dial up and ADSL internet
       Mobile operators providing voice and data services
       VOIP services
       Broadcasting
       Radiocommunications

There are eight companies operating under this regime imposed by the
Communications Act 2006 providing a variety of fixed and mobile networks and
services.

The GRA published a Decision Notice which explains the price cap compliance
procedure for operators to whom it is applied and establishes the compliance forms
to be completed for annual assessment. The Decision Notice provides guidance
to all operators who now or in the future will be subject to any form of similar price
controls.

Gibraltar is now in the final stages of introducing number portability between network
and service providers for geographic, non-geographic and mobile telephone numbers.
Number portability will enable subscribers of publicly available telephone services
and mobile services to change their service provider whilst keeping their existing
telephone number.

The GRA collects Administrative Charges from providers of electronic communications
services and networks, as well as licence fees and other reimbursements. During
the period under review, the total collected was £1,644,685.75, which was paid into
the Consolidated Fund. This compares to expenditure for all of the GRA’s Divisions
of £1,172,334.98.


 Satellite Co-ordination
The Satellite Division is responsible for looking after the interests of the satellite
industry, representing the Gibraltar satellite operator(s) at meetings and ensuring
they comply with the Radio Regulations of the International Telecommunication
Union and any other international obligations.

The Division also liaises with the UK’s National Space Centre prior to the GRA
granting satellite operators an Outer Space Act licence to launch and operate satellites
in space.




                Gibraltar Regulatory Authority Annual Report 2010 / 2011
       CEO Statement
4
    Data Protection

     The Data Protection Act 2004 requires companies and organisations who keep
     personal data about people to ensure that the information is collected, kept and
     used in a responsible manner as laid out in the Principles of the Act.

     During the period under review, the Division dealt with 86 formal enquiries, which
     is about the same number as the previous year. The Division undertook 19
     investigations. Please see the Case Studies section in this report for an in-depth
     review of some of the investigations which can be published.


    Gambling

     The Gambling Act 2005 came into operation on 26th October 2006 to repeal the
     Gaming Act, a law originally enacted in 1958.

     The Act provides for a Licensing Authority, currently the Minister with responsibility
     for Gambling, and a Gambling Commissioner, with both entities having separate
     responsibilities.

     The GRA is the Gambling Commissioner which operates through the Gambling
     Division. In the last year, the Commissioner concluded, in consultation with the
     industry, a second code in respect of Money Laundering and Counter Terrorist
     Financing (AML/CTF). This has now been approved by the Minister for implementation
     by the industry. Work will continue during 2011 to ensure the industry properly
     embraces the requirements of this Code.

     This is the last Annual Report of the GRA which includes information on the regulation
     of the gambling industry. During the coming financial year, the GRA’s Gambling
     Division will be merged with the Gambling Division of the Ministry of Finance and
     the new joint Division, coming under the Ministry of Finance, will deal with both
     licensing and regulatory matters.




     Paul J Canessa
     Chief Executive Officer




                               Gibraltar Regulatory Authority Annual Report 2010 / 2011
                                                                                                      Communications
                                                                                                                           5
COMMUNICATIONS




INTRODUCTION                                                                                                       7


THE ELECTRONIC COMMUNICATIONS
                                                                                                                   7
REGULATORY FRAMEWORK


PRICE CAP CONTROL COMPLIANCE                                                                                       8


ACCOUNTING SEPARATION REPORT (ASR)                                                                                 8

Accounting Separation & Cost Accounting Systems......................................... 8


OTHER REGULATORY MATTERS                                                                                           10
Number Portability................................................................................................10
118xx - Directory Enquiry Services..................................................................... 11
Roaming...............................................................................................................11
Eazitel....................................................................................................... 12




                      Gibraltar Regulatory Authority Annual Report 2010 / 2011
     Communications
6
    COMMUNICATIONS




    CONFERENCES                                                                                                      13

      International Institute of Communications (IIC) 2010,
      International Regulators Forum (IRF) and Annual Conference 2010................13
      European Platform of Regulatory Authorities (EPRA)........................................13


    WORK PROGRAMME                                                                                                   14

      Market Reviews....................................................................................................14




                                         Gibraltar Regulatory Authority Annual Report 2010 / 2011
                                                                           Communications
                                                                                            7
 Introduction

The remit of the Communications and Broadcasting Division includes the following
transmission networks:

       Traditional telephone wire
       Dial up and ADSL internet
       Mobile operators providing voice and data services
       VOIP services
       Television and Radio
       Radio Communications including fixed wireless services
       Licensing Framework for Satellite Services

The Communications and Broadcasting Division enhances competition in the
communications sector by facilitating market entry through authorisations and licences
to provide networks and services, and by regulating access to networks so as to
develop effective choice for both business and residential consumers. In a rapidly
evolving sector, the GRA seeks to ensure that consumer demands for competitive
services of the highest quality at a reasonable cost are met in a prompt and efficient
manner.

The issuing of a number of classes of radiocommunications licences, e.g. Ship’s
Station Licence, Dealer’s Licence, Private Mobile Radio Licence and Teleport Facility
Licence (collectively known as Part VI Licences), and collection of fees is delegated
to the GRA by the Minister for Communications. In the last financial year, the GRA
collected £1,578,802.78 in licence fees on behalf of the Government.

This Division also collects Administrative Charges from providers of electronic
communications services and networks, the total of which was £596,531, which was
paid into the Consolidated Fund.



 The Electronic Communications Regulatory Framework

The EU formally adopted a new Telecoms Reform package on 20th November 2009
and entered into force on 18th December 2009.

The EU Telecoms Reform package comprises five different EU Directives (Framework
Directive, Access Directive, Authorisation Directive, Universal Service Directive and
the e-Privacy Directive) and a new Regulation setting up the European Body of
Telecoms Regulators (BEREC). It has been accompanied by a Directive to reform
the GSM Directive of 1987 to free-up airwaves for 3G and other mobile services.

The transposition of the telecoms reform package into Gibraltar legislation should
be completed by June 2011.




                Gibraltar Regulatory Authority Annual Report 2010 / 2011
       Price Cap Control Compliance (Communications)
8
    Price Cap Control Compliance

     On 26th April 2010, the Authority published “Public Consultation 03/10 – Price cap
     control compliance” in which it invited comments from all interested parties on
     questions relating to the compliance procedure with regard to price control obligations
     applicable to providers of electronic communications networks and services designated
     with significant market power (SMP).

     This document builds upon what was established in Decision Notice 03/09 on the
     application of Rebalancing and a Price Cap control on Gibtelecom in which the GRA
     imposed retail price caps on an annual basis over the period from 1st May 2009 to
     30th April 2012. It also proposed the form in which SMP operators must submit
     price cap compliance information in order to enhance transparency and increase
     legal certainty for market players.

     Having taken all operator responses into account, the Authority published Decision
     Notice 04/10 which explains clearly the entire price cap compliance procedure and
     establishes the compliance forms to be completed for annual assessment. The
     Decision Notice provides guidance to all operators who now or in the future will be
     subject to any form of similar price controls.


    Accounting Separation Report (ASR)

     Gibtelecom has SMP in various electronic communications markets and therefore
     the company has an annual obligation to account separately for their wholesale and
     retail services. This is implemented through the annual submission of their Accounting
     Separation Report. Their ASR is submitted to the GRA after it has been independently
     audited. The GRA carries out annual reviews of these separated accounts and these
     set out to determine whether their ASRs comply with the relevant legislative documents.
     During this financial year, the GRA reviewed Gibtelecom's ASR and concluded that
     Gibtelecom was compliant with Statement 07/08 on Accounting Separation, Cost
     Orientation, Cost Accounting methods and compliance under SMP Obligations.
     Statement 07/08 deals with the obligations under accounting separation and with
     cost orientation through the correct attribution of costs. It also provides guidelines
     on Cost Accounting Systems and the compliance requirements.


    Accounting Separation & Cost Accounting Systems

     Statement 07/08 was published on 11th August 2008 as a preliminary guideline to
     all operators with accounting SMP obligations. In 2010, however, the Authority
     reviewed this document and decided that it needed to enhance its content in order
     to provide clearer guidance and regulatory certainty.




                              Gibraltar Regulatory Authority Annual Report 2010 / 2011
                                        Accounting Separation Report (Communications)
                                                                                            9
 Accounting Separation & Cost Accounting Systems cont (2)...

On the 30th September 2010, the Authority issued a public consultation on Accounting
Separation and Cost Accounting Systems with reference to compliance under SMP
obligations (Public Consultation No. 06/10). This consultation deals with the Authority's
position with regard to accounting separation and cost accounting obligations and
compliance with relevance to Decisions 03/08, 04/08 and 05/08 on Market Reviews
published on 11th August 2008 and builds upon Statement No. 07/08 on Accounting
Separation, Cost Orientation, Cost Accounting methods and compliance under SMP
obligations. This document allowed operators the opportunity to comment on the
Authority’s proposals.

Taking the operator responses into account, on 22nd February 2011 the Authority
issued a Response to Consultation and Decision 01/11 which now establishes the
complete accounting framework that SMP operators have to follow. It lists the
Notified Operators and the relevant markets where Accounting Separation and Cost
Accounting obligations have been imposed by the Authority and contains the key
principles to be applied by Notified Operators for the purpose of implementing
Accounting Separation and Cost Accounting obligations. It also provides templates
on how SMP operators need to submit their ASR’s for example Profit and Loss
statements and Mean Capital Employed statements amongst others.

The overall objective of this Response to Consultation and Decision is to foster and
ensure the application of consistent accounting principles and methodologies at
national level, taking into account the experience gained by national regulatory
authorities in other countries in the domain of accounting separation and cost
accounting. It will also improve the transparency of the cost accounting systems,
the methodologies, the data elaborated, and the auditing and reporting process to
the benefit of all parties involved.




                 Gibraltar Regulatory Authority Annual Report 2010 / 2011
        Other Regulatory Matters (Communications)
10
     Number Portability

      Gibraltar is now in the final stages of introducing number portability between network
      and service providers for geographic, non-geographic and mobile telephone numbers.

      Number portability will enable subscribers of publicly available telephone services
      and mobile services to change their service provider whilst keeping their existing
      telephone number. Its purpose is to foster consumer choice and effective competition
      by enabling subscribers to switch between providers without the costs and
      inconvenience of changing telephone number.

      Work on number portability commenced back in 2006. However, discussions to
      establish a self-regulatory framework to manage number portability did not progress
      in the manner the GRA had expected. The GRA believed that ample time had passed
      for the industry to have come up with a way forward in order to devise a joint solution.
      Thus, the GRA reached the conclusion that the only realistic way to move this project
      to completion, and so enable customers in Gibraltar on both mobile and fixed
      networks to benefit from number portability, was to issue a Direction on the manner
      in which it expected the introduction of number portability to be implemented.

      Following discussions with regulators in other small jurisdictions and correspondence
      with interested parties in Gibraltar, the GRA concluded that the company PortingXS
      was the most economic and suitable platform to deliver number portability in Gibraltar
      in the shortest timescale possible. This conclusion was reached based on the
      successes of the PortingXS platform in providing appropriate number portability
      solutions in other comparable jurisdictions such as the Channel Islands and the Isle
      of Man. In early July 2009, PortingXS was invited to Gibraltar to present their
      portability services to the local operators and costs involved. Based on the discussions
      on the day, the Authority forwarded a draft Direction to operators and invited comments.

      The GRA took on board such comments and on the 9th November 2010 issued
      Direction A01/2010 “Direction Issued to Providers of Public Electronic Communications
      Networks on Number Portability” which took account the Government’s requirement
      that the central database of the number portability platform be hosted in Gibraltar.
      Draft specifications for mobile and fixed porting, based on existing documents used
      by PortingXS in other jurisdictions to providers of electronic communications networks
      on number portability, were also forwarded to the relevant operators.

      Furthermore, the Direction required operators to establish a technical steering group
      whose first task would be to finalise the detailed specifications. The GRA facilitated
      the first meeting of the technical steering group in November 2010 where a
      representative from PortingXS also attended. Operators were instructed to provide
      feedback on the draft specifications at the meeting.

      Under the terms of the Direction, the technical steering group has been informing
      the GRA of the dates of its subsequent meetings and the outcome of each of its
      meetings.

      The Direction finally provided that operators should implement number portability
      by 1 June 2011. Direction Notice A01/2010 on Number Portability can be read on
      the Authority’s website.
                               Gibraltar Regulatory Authority Annual Report 2010 / 2011
                                              Other Regulatory Matters (Communications)
                                                                                          11
 118x - Directory Enquiry Services
In order to provide continuity to consumers, Gibtelecom’s 195 and 196 directory
facility access codes continued in operation for a period of six months until they
were withdrawn completely.

A period of parallel running between the 195 and 196 and the new 11811 and 11888
directory enquiry access codes came to an end on the 30th September 2010. Since
then, customers have been reminded to dial 11811 and 11888 respectively to access
Gibtelecom’s local and international enquiries.

 Voice Roaming
During 2007, the EU introduced caps on roaming prices to ensure that mobile phone
subscribers pay similar roaming tariffs across the EU.

In July 2009, the EU adopted revised rules that cut roaming prices further in
installments so that by July 2011 the maximum roaming charges would be 35 €
cents per minute for calls made and 11 € cents for calls received while abroad. Such
roaming rules would apply until the end of June 2012.

As part of the above rules, with effect the 1st July 2010, the EU has lowered roaming
call price caps. The maximum price for making a roaming call was cut from the
current 43 € cents to 39 € cents per minute, while receiving a call would cost a
maximum of 15 € cents per minute, instead of 19 € cents.

 Data Roaming
In addition to the lowered roaming call price caps, with effect the 1st July 2010, the
maximum wholesale prices for data roaming was lowered from 1 Euro to 80 € cents
per MegaByte. This meant that mobile data customers in Gibraltar could possibly
see a reduction in their data roaming charges (dependant on prices set by the
operators that customers are roaming with whilst traveling within Europe).

Furthermore, the EU placed a cap on mobile data roaming charges ensuring
customers would not be hit with a huge bill without warning. This meant that as of
July 2010, operators have had to set a monthly roaming limit to customers and a
warning is sent once a customer has reached 80% of their data-roaming limit. Those
customers who do not set a data-roaming limit will be automatically set at 50 Euros
(unless they have chosen another higher or lower limit). Once a customer hits their
cap, the operator will have to cut off his or hers mobile internet connection. Having
said this, a customer may inform an operator if they want to exceed their data
roaming cap a particular month.

As Gibraltar is a non-eurozone country, the amounts mentioned above for both voice
and data roaming, should be calculated by relevant Gibraltar operators based on
the exchange rate published in the EU's Official Journal as of 1 June 2010.

As all the above was regulation-driven, the relevant operators in Gibraltar have to
adopt such measures. Thus, the GRA must ensure that authorised mobile phone
operators in Gibraltar comply with the new rules on data roaming and the lower
prices of voice calls.
                Gibraltar Regulatory Authority Annual Report 2010 / 2011
        Other Regulatory Matters (Communications)
12
     Eazitel

      Earlier this year, Cloud9 Mobile (Gibraltar) Limited changed its name to Eazitel.

      Unfortunately, due to unforeseen delays, Eazitel has failed to launch by its intended
      date. Having said this, they have recently obtained planning permission for a number
      of the sites that will be holding their mobile network infrastructure and have also
      reported that they are in the final stages of completing their Network Operations
      Centre. A revised launch date is expected soon.




                               Gibraltar Regulatory Authority Annual Report 2010 / 2011
                                                               Conferences (Communications)
                                                                                              13
 International Institute of Communications (IIC) 2010, International
 Regulators Forum (IRF) & Annual Conference 2010
In October 2010 two delegates from the GRA, including its Chief Executive, attended
the IIC’s international regulatory forum and the annual conference that followed.
Both were held in Barcelona and were hosted by the Consell de l’Audiovisual de
Catalunya (CAC) and the Comision del Mercado de las Telecomunicaciones (CMT).

The Forum was an invitation-only meeting in which the challenges raised by the
dynamic and interconnected relationships that technologies and content now permit
and what this subsequently means for the regulatory process was explored. Other
topics that were debated included the regulator’s role in relation to competition in
wholesale and retail markets, the relevant forms of regulation and dispute resolution
in a time of economic pressure, and how to efficiently manage domestic and
international spectrum management.

The IRF was followed by the IIC Annual Conference. Senior representatives from
industry, government, regulatory authorities and other experts from around the world
shared their knowledge and insights about the wave of developments in the
telecommunications world and look at the public policy and regulatory issues raised.
Among the issues for debate were the impact the economic and financial crisis is
having on the communications sector and any government intervention and the way
the industry, government and regulators may assist users to safeguard their privacy
and personal data in a way that does not obstruct the development of new businesses
and business models.


 European Platform of Regulatory Authorities (EPRA)

31st Meeting of EPRA
The meeting which took place on 12th - 14th May 2010 was held in Barcelona at
the invitation of the Consell de l’Audiovisual de Catalunya (CAC). This provided the
opportunity to also celebrate the 15th anniversary of the EPRA and the 10th
anniversary of the Catalan Audiovisual Council. Around 140 delegates from 43
countries attended the meeting where 50 regulatory authorities were represented.
They were joined by the permanent observers from the Council of Europe, the
European Audiovisual Observatory and the European Commission.

The implementation of the Audiovisual Media Services Directive was one of the focal
points on the agenda, with a plenary session and a working group addressing the
first experiences with regulating product placement and practical issues relating to
the protection of minors in on-demand services. Two representatives of the GRA
attended this meeting.

32nd Meeting of EPRA
Two representatives of the GRA attended the meeting which was held in Belgrade,
Serbia on 6 - 8 October 2010 at the invitation of the Republic Broadcasting Agency
(RBA). Over 50 regulatory authorities attended. Observers from the National
Communications Commission of Georgia attended for the first time. The National
Commission on TV and Radio of Armenia became the 52nd member to join the
biggest network of broadcasting regulators in Europe.

                Gibraltar Regulatory Authority Annual Report 2010 / 2011
        Work Programme (Communications)
14
     European Platform of Regulatory Authorities (EPRA) cont (2)...

      The main focus of the meeting was based on the future of advertising regulation.
      The plenary session looked at future regulatory scenarios ahead of the announced
      review of the Commissions Interpretative Communication on certain aspects of the
      provision of televised advertising. Audio and video examples of high profile cases
      illustrated how the separation principle has evolved over time which creates a
      challenge for regulators who need to keep pace with market developments and
      balance the protection of viewers against public interests while sustaining the
      broadcasting industry.

      This was followed by three working groups which tackled issues such as Product
      Placement, especially on how member states implement the rules, followed by a
      discussion of recent cases with the help of video examples; Connected TV/Hybrid
      TV and the regulatory challenges in terms of access, content integrity, content
      standards, viewers protection and media responsibilities and a third group on Public
      Service Broadcasting (PSB) which focused on assessment criteria, methods applied
      and how PSBs are followed up.




                        Fig 2.00 Images obtained from 31st EPRA Meeting



     Work Programme

      Market Reviews
      The GRA shall be starting its market review exercises during the next financial year.
      The reviews to be undertaken will be the wholesale fixed markets and wholesale
      mobile markets. With regard to the fixed market review, this will cover call origination
      and call termination markets. The wholesale mobile market review will look at two
      markets, call termination and SMS termination markets.

      In order to evaluate the relevant market conditions, qualitative and quantitative data
      requests have been sent out to all operators involved in these market reviews. As
      procedure dictates, public consultations will be issued inviting interested parties to
      provide comments and subsequent decision notices will be sent to the European
      Commission.




                               Gibraltar Regulatory Authority Annual Report 2010 / 2011
                                                                                                        Statistics
                                                                                                                     15
STATISTICS




VOICE TRAFFIC BREAKDOWN                                                                                  16

Voice Traffic Breakdown............................................................................16


VOIP SERVICES                                                                                            17

VoIP Services............................................................................................17
Subscriber Statistics..................................................................................17
VoIP Calls via VoIP Providers..............................................................................18


MOBILE SERVICES                                                                                          19

Mobile Phone Services..............................................................................19
                                                                                                           20
Mobile Statistics...........................................................................................
Roaming....................................................................................................21




INTERNET ACCESS SERVICES                                                                                 22
Internet Service Providers........................................................................ 22
Subscriber Statistics................................................................................. 22


                    Gibraltar Regulatory Authority Annual Report 2010 / 2011
                                     Voice Traffic Breakdown (Statistics)
16
        Voice Traffic Breakdown

                                   During the period April 2010 - March 2011, 83.5 million minutes of phone calls
                                   originated in Gibraltar. This figure takes into account calls made from fixed lines (i.e.
                                   land lines and payphones), VoIP calls and mobile calls.
                                                                                                           (6%)
                                                                                                    (4%)
                                                                                                                           (57%)          Local Calls
                                      150
                                                                                          (16%)                                           International Calls
 Voice Traffic Minutes (000,000)




                                      140                                                                                                 Local Mobile
                                                                                                                                          International Mobile
                                      130




                                                                                                                                                                 The statistics provided in this section are based on data provided by the operators to the GRA
                                                                                                                                          VoIP

                                      120                                                   (17%)

                                      110
                                                                                                                  Fig 3.00 chart showing breakdown of
                                                                                                                     Calls Originating from Gibraltar
                                      100

                                       90

                                       80
                                            2004 2005 2006 2007 2008 2009 2010
                                                                Year
                                       Fig 3.01 historical breakdown of Total Voice Traffic
                                                      generated in Gibraltar


                                   The drop in the number of local calls correlates with the increased use and popularity
                                   of mobile phones. International calls, however, have not changed significantly over
                                   the years. Free software or instant messaging applications used to make ‘calls’ over
                                   the internet such as Skype and MSN Messenger could be the reason for this
                                   decrease.

                                                                                                                                   Local Calls
                                                                120                                                                International Calls
                                                                                                                                   Local Mobile
                                                                100                                                                International Mobile
                                                                                                                                   VoIP
                                                                                                                      Fig 3.02 historical breakdown
                                            Minutes (000,000)




                                                                 80                                                      of Calls Originating from
                                                                                                                                 Gibraltar

                                                                 60


                                                                 40


                                                                 20


                                                                  0
                                                                      05/06     06/07      07/08         08/09      09/10      10/11
                                                                                                  Year
                                                                              Gibraltar Regulatory Authority Annual Report 2010 / 2011
                                                                                                                                                                         VoIP Services (Statistics)
                                                                                                                                                                                                      17
                                                                                                  VoIP Services

                                                                                                 VoIP (Voice over IP) telephony is defined as a way of sending voice calls over the
                                                                                                 Internet using either software or a hardware telephone. It is optimized for the
                                                                                                 transmission of voice through packet switched networks.

                                                                                                 VoIP services can be accessed either by means of a pre-paid calling card or by
                                                                                                 dialling a prefix prior to the call. The prefix ensures that the call is routed via the
                                                                                                 network corresponding to the prefix.

                                                                                                 VoIP to VoIP phone calls are usually free (via software applications such as Skype),
                                                                                                 while VoIP calls connecting to public switched telephone networks (PSTN) usually
The statistics provided in this section are based on data provided by the operators to the GRA




                                                                                                 incur a cost.

                                                                                                 Though VoIP calls generally are of less quality (due to speech data compression
                                                                                                 techniques) than those routed via conventional networks, the cost of the calls is
                                                                                                 comparatively lower thus providing an attractive alternative in many cases.

                                                                                                  VoIP Subscriber Statistics

                                                                                                 There are currently 3 VoIP providers in Gibraltar which allow for international calls
                                                                                                 to be routed via their network. These are Gibtelecom, EasyCall and CTS.

                                                                                                               (16%)




                                                                                                                                                                                Fixed Line

                                                                                                 (22%)                                                                          VoIP

                                                                                                                                                                                Mobile
                                                                                                                                                     (62%)




                                                                                                         Fig 3.03 chart showing breakdown of Outgoing International Calls Originating
                                                                                                                                       from Gibraltar


                                                                                                 During the period April 2010 - March 2011, 4.8 million minutes of outgoing international
                                                                                                 calls were routed via VoIP. This accounted for 20% of the total outgoing international
                                                                                                 minutes originating in Gibraltar.

                                                                                                 This figure does not take into account Voice over Instant Messaging (VoIM)
                                                                                                 applications used to make ‘calls’ over the internet such as Skype and MSN Messenger.




                                                                                                                  Gibraltar Regulatory Authority Annual Report 2010 / 2011
       VoIP Services (Statistics)
18
     VoIP Calls via VoIP Providers

      The countries most called via the VoIP calls originating in Gibraltar during the period
      April 2010 - March 2011, as in previous years, were UK and Spain.

                                                        (10%)
        UK                                   (5%)

        Spain                          (4%)

        Morocco                     (4%)




                                                                                                     The statistics provided in this section are based on data provided by the operators to the GRA
        Asia                                                                                (51%)

        Rest of Europe

        Rest of World
                                          (26%)


       Fig 3.04 chart showing breakdown of VoIP calls by destination originating from Gibraltar


      The downward trend seen in the graph below could be due to consumers preferring
      to use VoIP to VoIP phone calls which are usually free of charge instead of making
      VoIP calls via VoIP providers which incur a cost.



             2000000
                                                                                           UK
             1800000                                                                       Spain
             1600000                                                                       Morocco
             1400000
             1200000
             1000000
               800000
               600000
               400000
               200000
                      0
                           06/07      07/08         08/09       09/10       10/11

               Fig 3.05 Comparison of total VoIP Traffic with its 3 most called countries




                                Gibraltar Regulatory Authority Annual Report 2010 / 2011
                                                                                                                                                                                         Mobile Services (Statistics)
                                                                                                                                                                                                                        19
                                                                                                  Mobile Phone Service

                                                                                                 There are now three licensed mobile operators in Gibraltar:
                                                                                                                         Gibtelecom
                                                                                                                         CTS
                                                                                                                         Eazitel

                                                                                                 However, the charts below only take into account Gibtelecom & CTS subscribers
                                                                                                 as at the time of compiling statistics Eazitel were not yet operational.
The statistics provided in this section are based on data provided by the operators to the GRA




                                                                                                                                                                                                  (26%)

                                                                                                                                    Post Paid
                                                                                                                                    Pre-Paid




                                                                                                                                                       (74%)

                                                                                                                         Fig 3.06 chart showing subscribers on Post, Pre Paid SIM Cards




                                                                                                                            40000


                                                                                                                            35000
                                                                                                    Mobile Subscribers




                                                                                                                            30000


                                                                                                                            25000


                                                                                                                            20000


                                                                                                                            15000


                                                                                                                            10000
                                                                                                                                     2001 2002 2003 2004 2005 2006 2007 2008 2009 2010
                                                                                                                                                                   Year
                                                                                                                                             Fig 3.07 Yearly increase in Mobile Subscribers


                                                                                                                                    Gibraltar Regulatory Authority Annual Report 2010 / 2011
        Mobile Services (Statistics)
20
     Mobile Statistics

      During the period April 2010 - March 2011, 20.1 million minutes of calls originated
      from mobile phones in Gibraltar. Of these, 13.7 million minutes were local calls, 3.6
      million minutes international with the remainder being roaming calls.

                                                                         (13.9%)
       Local Outgoing Mobile
       International Outgoing Mobile
       Outgoing Roaming Mobile
                                                     (18.1%)




                                                                                                                        The statistics provided in this section are based on data provided by the operators to the GRA
                                                                                                          (68.0%)

                                      Fig 3.08 chart showing breakdown of GSM Calls




                             14

                             12
         Minutes (000,000)




                                                                                                     Local Outgoing
                             10                                                                      Mobile
                                                                                                     International
                              8                                                                      Outgoing Mobile
                                                                                                     Outgoing Roaming
                              6                                                                      Mobile


                              4

                              2

                              0
                                  04/05 05/06 06/07 07/08 08/09 09/10 10/11
                                                          Year
                                         Fig 3.09 Yearly increases in Mobile calls




                                          Gibraltar Regulatory Authority Annual Report 2010 / 2011
                                                                                                                                                                            Mobile Services (Statistics)
                                                                                                                                                                                                           21
                                                                                                  Roaming

                                                                                                 The period April 2010 - March 2011 saw approximately 1,090,000 roamers log on
                                                                                                 to mobile networks in Gibraltar. This figure corresponds to mobile phones using SIM
                                                                                                 (Subscriber Identity Module) cards originating in countries other than Gibraltar.
                                                                                                 Roaming mobile made approximately 2.8 million outgoing international minutes of
                                                                                                 phone calls and received 2.3 million incoming minutes of calls.



                                                                                                              1100000
The statistics provided in this section are based on data provided by the operators to the GRA




                                                                                                              1000000

                                                                                                               900000

                                                                                                               800000
                                                                                                    Roamers




                                                                                                               700000

                                                                                                               600000

                                                                                                               500000

                                                                                                               400000

                                                                                                               300000

                                                                                                               200000
                                                                                                                         04/05 05/06 06/07 07/08 08/09 09/10 10/11
                                                                                                                                                      Year
                                                                                                                                  Fig 3.10 Yearly increases in Mobile Roamers




                                                                                                                        Gibraltar Regulatory Authority Annual Report 2010 / 2011
                         Internet Services (Statistics)
22
                       ISP’s (Internet Service Providers)

                        Currently, there are three licensed Internet Service Providers (ISP) in Gibraltar,
                        Sapphire Networks, Gibtelecom & CTS. Each provider is responsible for providing
                        subscribers with ADSL and dial-up accounts which allow access to the Internet.

                        ADSL and dial-up both utilise existing copper telephone lines to send and receive
                        data. ADSL, however, allows for datastream speeds from 128kbps to 8mbps,
                        unlike conventional dialup rated at 57kbps.

                        Sapphire also offer metro ethernet services which are available to customers within
                        reach of their own physical network. As a result, these are capable of reaching higher




                                                                                                                            The statistics provided in this section are based on data provided by the operators to the GRA
                        and more reliable speeds.

                        CTS are also offering WiMAX services - a telecommunications technology providing
                        wireless data, voice and video over long distances.



                       Subscriber Statistics

                        At the end of March 2011, there were a total of 11,284 internet accounts / subscribers
                        in Gibraltar.


                                                                      ADSL
                       12000                                          Dialup
                                                                      Metro
                                                                      WiMAX
                       10000
 Subscriber Accounts




                        8000

                        6000

                        4000

                        2000

                           0
                               02/03    03/04      04/05       05/06       06/07       07/08       08/09    09/10   10/11
                                                                           Year

                                 Fig 3.11 chart outlining the popularity of internet services offered by ISP’s




                                                 Gibraltar Regulatory Authority Annual Report 2010 / 2011
                                                                                   Radiocommunications & I.C.T
                                                                                                                              23
RADIOCOMMUNICATIONS & I.C.T




GIBRALTAR SPECTRUM MANAGEMENT                                                                                         25

The Electromagnetic Spectrum...........................................................................25
Licensing of the Electromagnetic Spectrum........................................................25
Part VI Licence Revenue......................................................................................27


MARITIME                                                                                                              29

Maritime.................................................................................................................29
Accounting Authority.............................................................................................29
Port Operations.....................................................................................................29
Ship Station Licences...........................................................................................30


TERRESTRIAL                                                                                                           31

Terrestrial Licence Revenue................................................................................31
Radio Amateurs and Citizen’s Band (CB) Radio.................................................31
Dealers..................................................................................................................32
Private Mobile Radio............................................................................................32
Short Range Devices (SRD)................................................................................32
Very Small Aperture Terminals (VSAT)................................................................33
Fixed Wireless Access Networks (FWA).............................................................33

                       Gibraltar Regulatory Authority Annual Report 2010 / 2011
        Radiocommunications & I.C.T
24
     RADIOCOMMUNICATIONS & I.C.T




     INTERFERENCE & INSPECTIONS                                                                                             34

       Site Audits.............................................................................................................34
       Enforcement..........................................................................................................34
       Development & Planning Commission................................................................35
       Digital Broadcasting..............................................................................................36


     INTERNATIONAL RESPONSIBILITIES                                                                                         37

       International Co-ordination & Outer Border Issues.............................................37
       International Frequency Planning Group (IFPG)................................................37
       International Spectrum Stakeholder Briefing (ISSB)...........................................38
       GRA Consultancy.................................................................................................38
       Cybersecurity Forum 2010 Conference............................................................38


     WORK PROGRAMME                                                                                                         39

       Accounting & Reporting........................................................................................39
       Bespoke Software................................................................................................40
       GRA Website.......................................................................................................40




                                            Gibraltar Regulatory Authority Annual Report 2010 / 2011
                  Gibraltar Spectrum Management (Radiocommunications & I.C.T)
                                                                                        25
 The Electromagnetic Spectrum

Under the Communications Act 2006 the GRA is responsible for the management
of the Electromagnetic Spectrum. This includes:

       the issuing of licences;
       allocation of spectrum;
       compliance with International Commission on Non-Ionizing Radiation
       Protection (ICNIRP) levels;
       international representation;
       offering advice and other related activities.

                                          Visible Light

                   Infrared                                   Ultraviolet
                                                                             X-Ray

     Microwave


 Radio                                                                         Gamma




                                   Increasing Wavelength

                                    Increasing Energy

          Fig 4.00 diagrammatic representation of electromagnetic spectrum

Only a fraction of the electromagnetic spectrum is usable for communication systems
due to the specific properties of each classification of wavelengths, therefore the
GRA concentrates mainly on the Radio, Microwave and Infrared parts of the spectrum.
For a more detailed breakdown of spectrum allocations and authorised services in
Gibraltar please see the Gibraltar Frequency Allocation Table (GFAT) (published on
the GRA website).


 Licensing of the Electromagnetic Spectrum

The GRA collects licence fees on behalf of the Government of Gibraltar but uses
different licensing schemes to promote the use of technologies or maximise the
spectrum efficiency by charging by frequency rather than by the number of transmitter
equipment. For a complete list of applicable licence fees please refer to Direction
M02/2009 available on the GRA website.




                Gibraltar Regulatory Authority Annual Report 2010 / 2011
        Gibraltar Spectrum Management (Radiocommunications & I.C.T)
26
     Licensing of the Electromagnetic Spectrum cont (2)...
      Although all radio transmitters require a form of licensing, it is both impractical and
      not beneficial to issue licences to all these devices which range from WiFi, mobile
      phones, remote door openers or even TV remote controls. Therefore, these and
      many other devices are exempt from licensing because of their social benefit, such
      as panic alarms, or because they provide service or security. A full list of applicable
      exemption criteria can be found on our website under “Notice 11/08, concerning
      exemptions from requirement to obtain a licence”.

      Usually, devices with very low power or for specific uses are exempt, but there are
      strict conditions which must be adhered to in order to be compliant, i.e. WiFi is
      generally exempt but if the antennas are changed, the radiated power is increased
      and may constitute a health risk. This will also increase the range of the link and
      can be used to provide unregulated services and be detrimental to consumers.
                                New
         Description          Licences 2010/2011 2009/2010 2008/2009 2007/2008
         CB Radio                0               9                12               10       11
         Radio Amateurs          0               43               43               42       43
         Dealers                 1               39               39               40       46
         Port                    0               34               34               33       33
         PMR                     1               25               24               23       25
         Fixed Links             0               6                6                5        3
         SRD (LAN)               0               15               16               17       16
         VSAT                    0               2                2                2        2
         Accounting              0               20               20               21       22
         Authority
         Ship Station           114              792              778              734      675
         ESTN                    0               1                1                1        1
         Spectrum Usage          0               1                1                1        1

         FWA                     0               2                2                2        2
         GSM                     0               2                2                1        1
         UTMS                    0               2                2                2        0
         TFL                     0               2                2                2        2
         Paging                  0               1                1                1        -
         Radar                   1               1                -                -        -
         AGRS                    1               1                -                -        -
         Total                   118            998              985              937       883
        Table 4.01 table illustrating breakdown of the type of Part VI licences issued by the GRA

                                 Gibraltar Regulatory Authority Annual Report 2010 / 2011
                Gibraltar Spectrum Management (Radiocommunications & I.C.T)
                                                                                            27
 Part VI Licence Revenue

The licensing of the electromagnetic spectrum is governed by Part VI of the
Communications Act. The chart below contains the percentage contribution to the
revenue collected over the last year for each type of Part VI licence. Please note
that these figures are made up of all monies collected for the period 1st April 2010
to 31st March 2011 and do not accurately reflect the contribution of all valid licenses
for the period, i.e. late payment of fees where the grace period elapses to the
following financial year.
                                                             (14.8%)
                                        (21.3%)

             Total                                                           (3.3%)
             FWA
             GSM
             TFL
             UMTS

                                  (29.2%)                                   (31.3%)


        Fig 4.02 chart containing the % contribution to the revenue collected
                  over the last year for each type of Part VI licence

As it stands now, and for the foreseeable future, the respective percentage contributions
will not fluctuate to any considerable extent. However, as new technologies gain
greater impetus worldwide, we will see a shift to include mobile technologies such
as LTE advance (4G). Fourth Generation mobile telephony with higher data capacity
rates requires greater bandwidth and hence more premium rate radio spectrum.
Although 4G networks are at a very early rollout stage throughout Europe there is
much hype surrounding this technology and the new interactive services it promises.




                 Gibraltar Regulatory Authority Annual Report 2010 / 2011
        Gibraltar Spectrum Management (Radiocommunications & I.C.T)
28
     Part VI Licence Revenue cont (2)...


                                                                                                         350,000
        TFL
        GSM                                                                                              300,000
        Total
        FWA                                                                                              250,000
        UMTS                                                                                             200,000
                                                                                                         150,000
                                                                                                         100,000
                                                                                                         50,000
                                                                                                         0
                  06/07         07/08              08/09                09/10               10/11
                      Fig 4.03 historical timeline showing Licence Revenue Collected

      From the graph above we can appreciate a reduction in the revenue collected for
      UMTS. This is due to a late payment of a licence renewal for an operator which was
      due close to the end of the financial year. This fact has also affected the split in the
      pie chart below where the actual contribution of UMTS should be in the region of
      23%, therefore accounting for approximately a quarter of all part VI revenues.




      CB Radio (0.06%)                                             (2.44%)
                                              (8.37%)                          (4.76%)
      Radio Amateurs (0.23%)
                                                                                          (7.33%)
      Dealers                      (8.15%)
                                                                                            (3.02%)
      Port (0%)
                                                                                               (1.92%)
      PMR
      Fixed Links                                                                                   (6.97%)

      SRD (LAN)
      VSAT
      Accounting Authority
      Ship Station Licences                   (56.75%)
      ESTN
      Spectrum Usage                 Fig 4.04 breakdown of % contribution of ‘Other’ licence
                                              revenue collected by Part VI Licences




                               Gibraltar Regulatory Authority Annual Report 2010 / 2011
                                                  Maritime (Radiocommunications & I.C.T)
                                                                                                     29
 Maritime

Port Operations, Accounting Authorities and Ship Station Licences make up the
Maritime quotient of Part VI licences. The Ship Portable Radio Licence is intended
for use by persons who operate radio equipment on marine frequencies for work or
pleasure, but do not want to associate their equipment with a vessel. The licence
fee is the same as for a pleasure yacht.

            Accounting Authority                        Ship Station Licences                 Port

 90,000
 80,000
 70,000
 60,000
 50,000
 40,000
 30,000
 20,000
 10,000
      0
            02/03 03/04 04/05 05/06 06/07 07/08 08/09                           09/10 10/11
               Fig 4.05 historical timeline highlighting licence revenue collected for
                              the maritime quotient of Part Vi licences

There has been a clear increase in the revenue collected for Ship Station Licences
over the current period. This is entirely due to the 5 year licence renewal option and
the increase of Ship Station licence fees for merchant vessels from £75 to £100.
The true long term pattern will be become apparent in coming years once this
stabilises and we will probably see a 5 year trend emerging.


 Accounting Authority

It is an international requirement that all Gibraltar registered vessels with radio
equipment enter into an agreement with an Accounting Authority, recognised by
Gibraltar, to process the payments of bills incurred from radiocommunications. A
total of 20 Accounting Authorities are now registered in Gibraltar out of a maximum
of 25 permitted by the ITU Radio Regulations.


 Port Operations

This form of licensing is used to authorise the use of Marine band radio equipment
from a mobile or fixed location on land. Mainly used by Ship agents, ship chandlers
and other maritime businesses which require to communicate with their vessels at
sea or for communications between vessels requiring services from them. Calling
channel 71 and working channels 61, 62, 63, 68 and 69 have been set-aside for
Port Operators to use.



                Gibraltar Regulatory Authority Annual Report 2010 / 2011
             Maritime (Radiocommunications & I.C.T)
30
           Ship Station Licences

            The 5 year validity period option for commercial and pleasure vessels which was
            introduced in December 2009 has been welcomed by the industry. The obvious
            immediate increase in revenue discussed earlier is a clear sign that many vessels
            have opted to use this scheme. Currently 19% of vessels are under the 5 year
            scheme of which 84% are merchant vessels. A direct benefit of the 5 year scheme
            is the bringing in line of the certificates issued by the Maritime Administrator’s Office
            and the Ship Station Licence. The reduction in processing by back-office staff of
            reminder letters, renewals and other associated tasks releases back-office recourses
            which can be put towards training and other priority tasks.

                                                                                             Pleasure
                                                                                             Commercial
                                                                                             Official
            70                                                                               Ship Portable Radio

            60

            50
Licences




            40

            30

            20

            10

             0
                 02/03    03/04     04/05       05/06       06/07       07/08       08/09        09/10   10/11
                            Fig 4.06 timeline highlighting Ship Station Licence distribution


            The GRA is also responsible for maintaining the GMDSS (Global Maritime Distress
            & Safety System) and EPIRB (Emergency Position-Indicating Radio Beacon) registers
            and the allocation of the MMSI (Maritime Mobile Service Identities) numbers in
            conjunction with all other call signs for terrestrial licences. Therefore, changes to
            SOLAS (Safety of Life at Sea) and IMO (International Maritime Organisation)
            implemented by both the Gibraltar Port Authority and Ship’s Registry affect the
            requirement of vessels with radio equipment registered in Gibraltar.




                                      Gibraltar Regulatory Authority Annual Report 2010 / 2011
                                                  Terrestrial (Radiocommunications & I.C.T)
                                                                                                      31
  Terrestrial Licence Revenue

                 CB Radio                            Radio Amateurs                         Dealers
                  PMR                                SRD                                    VSAT


10,000
 9,000
 8,000
 7,000
 6,000
 5,000
 4,000
 3,000
 2,000
 1,000
     0
         02/03   03/04      04/05       05/06      06/07      07/08         08/09   09/10   10/11
             Fig 4.07 timeline highlighting Terrestrial Licence revenue collected



  Radio Amateurs & Citizen’s Band (CB)

Citizens' Band radio (CB) is a system of short-distance, simplex radio communications
between individuals on a selection of channels avoiding any interference to other
radio users. Radio amateurs, however, use various types of radio transceivers to
communicate with other radio amateurs. Together they only account for less than
1% of the Part VI licences revenue.

The Gibraltar Amateur Radio Society (“GARS”) is a small but active society that
represents the interests of Amateur Radio both locally and internationally as a full
International Amateur Radio Union (IARU) member society.

Each year there is a number of Radio Amateurs visiting Gibraltar for the purpose
of transmitting from specific permitted areas in Gibraltar such as Europa Point.
Temporary reciprocal licences are issued by the GRA to visiting Radio Amateurs but
the qualifying criteria are stringent and the conditions more restrictive in order to
safeguard other systems which could be adversely affected such as television
reception. There is no fee for these temporary licenses.

For more information on courses and on the Gibraltar Amateur Radio Society visit
their website www.gibradio.net




                 Gibraltar Regulatory Authority Annual Report 2010 / 2011
       Terrestrial (Radiocommunications & I.C.T)
32
     Dealers

      Under the Communications Act 2006, the sale, repair, hire or lending of licensable
      equipment (e.g. CB radios) require a Dealers’ Licence in addition to a Trade Licence.
      Since the abolition of the TV licence in 2006, TV receivers are now exempt from
      licensing and therefore many businesses who sold TV’s have cancelled their licence
      which they no longer require. Hence, the decline in the associated revenue since
      2005/2006.


     Private Mobile Radio (PMR)

      PMR's are field radio communications systems which use portable, mobile, base
      station, and dispatch console radios.

      Despite the proliferation of mobile phones and the exemption from licensing of short-
      range radios operating on 446 MHz band, some companies are seeing the benefit
      in changing back to using PMR. Nonetheless, due to the local terrain and greater
      dependence on mobile internet we will likely see the number of licensees decreasing
      or levelling off, though commercial activities (e.g. crane operators) may still require
      a protected frequency for their sole use, unlike the 446 MHz licence-exempt band
      which is unprotected and available to the public.


     Short Range Devices (SRD)

      A whole variety of SRD’s, which include WiFi Local Area Networks, are licence
      exempt throughout Europe. In Gibraltar, only CE approved equipment with integral
      antennas is exempt from licensing. Equipment fitted with an external antenna
      requires a SRD(LAN) licence. These types of equipment are used mainly as a
      cheaper alternative to leased lines to connect a remote office to the main office
      computer network. The basic limitation with these systems is a requirement for line-
      of-sight between the antennas and power is restricted to very low levels. Companies
      are charged a single annual licence fee depending on the type of system (point-to-
      point or point-to-multipoint), and not on a per link basis.




                               Fig 4.08 SRD’s installed in Gibraltar

                               Gibraltar Regulatory Authority Annual Report 2010 / 2011
                                                 Terrestrial (Radiocommunications & I.C.T)
                                                                                             33
  Very Small Aperture Terminals (VSAT)

VSAT’s are small Earth Stations that operate within 14-14.5 GHz at reduced power
levels. Satellite News Gathering ("SNG") terminals fall under this umbrella because,
technically, they operate in the same frequency bands. The licence fee is waived
for licence periods of 3 months which enables applicants ample time to provide ‘live’
broadcasts from Gibraltar.




                              Fig 4.09 VSATs installed in Gibraltar


  Fixed Wireless Access Networks (FWA)

There are currently 2 FWA network operators in Gibraltar operating in the band 3.4-
3.6 GHz. In most cases, this technology is seen as a quick rollout to compete against
ADSL, with varying success. Recent developments in LTE and other technologies
have overtaken this and can deliver better throughput hence we will see a reduction
in FWA in the near future.

None the less, the band specified above still has geographical restrictions in the
South District in the vicinity of Windmill Hill. This is to protect SES’s Satellite Earth
Station which operates in this band for the Space-to-Earth leg of their Telemetry and
tele-command transmissions.




                 Gibraltar Regulatory Authority Annual Report 2010 / 2011
       Interference & Inspections (Radiocommunications & I.C.T)
34
     Spectrum Audits

      The GRA has the responsibility in law to manage and maintain the electromagnetic
      spectrum in Gibraltar. This includes the allocation of spectrum (frequencies), spectrum
      harvesting in order to introduce better and more efficient use through developments
      in technology, normally driven by EU directives or ITU decisions, and ensuring
      compliance with the GFAT (Gibraltar Frequency Allocation Table) and investigate
      and remove, where possible, sources of interference.




                   Fig 4.10 Spectrum audits conducted at various sites by the GRA



     Enforcement

      The GRA has been involved in a number of interference related investigations, most
      notably the unlicensed use of a GSM signal booster. These devices are usually
      installed by qualified personnel affiliated or working for licensed mobile operators.
      They require expert knowledge of the network in order to work seamlessly without
      causing interference to other licensed users.




                               Gibraltar Regulatory Authority Annual Report 2010 / 2011
                           Interference & Inspections (Radiocommunications & I.C.T)
                                                                                        35
 Enforcements cont (2)...

Throughout the year, an individual/company decided to purchase and import into
Gibraltar a GSM booster without informing the GRA or declaring it to HM Customs.
They installed the antenna in a very inconspicuous location. This had an immediate
affect on the services provided by a licensed operator and led to dropped calls and
a considerable degradation of its signal quality. Working in partnership with the
affected mobile operator, and using specialised direction finding equipment, the
GRA located the transmitter and, consequently, the equipment was disabled. The
offender was warned that he was in breach of the Communications Act 2006 and
the equipment was removed and rendered inoperable.




                     Fig 4.11 Unlicensed GSM Signal Booster



 Development & Planning Commission
An efficient exchange information system between the GRA, office of the Town
Planner and other members of the DPC such as LPS (Land Property Services) has
been established. Its aim is to create an input onto the possible detrimental effects
to radiocommunications networks in Gibraltar caused by new land developments
and other tall structures/buildings. A notification process has also been established
whereby the GRA informs of proposed new radio installation which might be brought
to the attention of the Town Planner for compliance with building regulations.




                Gibraltar Regulatory Authority Annual Report 2010 / 2011
        Interference & Inspections (Radiocommunications & I.C.T)
36
     Digital Broadcasting

      The Government are committed to ‘going digital’ by the end of 2012. This will bring
      Gibraltar into line with our immediate neighbours as well as complying with the
      commitments of the ITU’s GE06 Plan, which was drafted in Geneva in 2006. The
      move to digital terrestrial broadcasting will increase the availability of spectrum for
      the introduction of a variety of new programmes and broadcasting opportunities,
      ultimately bringing new business opportunities and more importantly better quality
      digital services and variety to the public.




                               Gibraltar Regulatory Authority Annual Report 2010 / 2011
                        International Responsibilities (Radiocommunications & I.C.T)
                                                                                              37
 International Co-ordination & Outer Border Issues

The table below shows a summary of submissions by neighbouring countries to
change details in the Master Frequency Register (MFR). Changes can include the
addition of new transmitters, amendment of antennae characteristics or the removal
of a station which is no longer in operation. This information is published by the ITU
in a bi-weekly publication and in most cases, when a potential interference issue
is identified by the submitting administration; it is common practice to inform the
affected parties to reach bi-lateral agreements in order to speed the whole registration
process with the ITU. In the majority of cases, the changes do not pose a problem
to Gibraltar’s registered stations due to the distance or terrain attenuation (i.e. signals
blocked by mountains) between them, but there are always exceptions which need
to be scrutinised using available software, analysis models, propagation software
and local terrain knowledge.


                                 MRC              ALG                E      Total

               GE75               0                0                3       3
               GE84               12               0                50      62
               GE06A              17               0                0       17
               GE06D              2                39               0       41

   Table 4.12 table showing breakdown of type of submission by neighbouring countries
    in a radius of 500km from Gibraltar. Please note that only a fraction of these trigger
           co-ordination are objected to due to potential interference to Gibraltar
                                 registerered assignments


The ITU run biennial workshops to update administrations on how to interact with
the bureau and submit the appropriate forms for changes to the international master
frequency register. They also recap on the internal workings of the ITU and what
software developments have been brought on-line and other tools which are available
to administrations in order to help in the co-ordination and dispute process. Last
December in Geneva, two members of the GRA attended respective workshops in
terrestrial and satellite services.


 International Frequency Planning Group (IFPG)

The UK’s IFPG deals exclusively with international matters and international UK
policy including, but not limited to policy documents for WRC (World Radio Conference),
EU and CEPT (European Conference of Postal and Telecommunications
Administrations).

The GRA attends these meetings and forms an integral part of the group to ensure
that the UK policies do not conflict with Gibraltar’s interests and to flag potential
problems specific to countries in the outer borders of the EU.




                 Gibraltar Regulatory Authority Annual Report 2010 / 2011
        International Responsibilities (Radiocommunications & I.C.T)
38
     International Spectrum Stakeholder Briefing (ISSB)

      The ISSB forum continues to be a valuable source of information and the GRA
      regularly attends meetings.

     GRA Consultancy

      At the recommendation from the British Virgin Islands (BVI), the Director of Public
      Utilities/Telecommunications Officer for Anguilla has been in contact with the GRA
      with the aim of establishing a similar working relationship to what the GRA currently
      has with the BVI. A number of years ago the GRA helped the BVI implement a
      tailored version of our current Ship Station Licensing system which manages the
      accounting and back-office side as well as the management of call signs, MMSI
      numbers and information posting to the MARS (Maritime Mobile Access and Retrieval
      System) database in the ITU. Although negotiations are still at a very early stage
      we still regularly advise on maritime matters to both Anguilla and the BVI and look
      forward to working closely with them for many years to come.

     Cybersecurity Forum 2010

      The GRA was invited by the Commonwealth Telecommunications Organisation to
      attend as a panel member at the 1st Cybersecurity Forum which took place in
      London 17 – 18th June 2010.

      The purpose of this conference was to bring awareness and draw on the strengths
      of the developed world to build the capacity of countries in Africa and Asia and to
      improve their cyber security frameworks through implementing available technical
      measures, establishing appropriate organisational structures, creating robust
      legal/regulatory frameworks and enabling international cooperation.

      A large number of delegates from Commonwealth countries attended. They ranged
      from government to private business entities as well as representatives from charities
      that tackle threats to young and vulnerable people.

      Joseph Torres, the Authority’s Radiocommunications & I.T. Manager, delivered a
      presentation on ‘Aims and expectations of Gibraltar’ in the context of cyber security
      threats, established practices and the need for a CERT (Computer emergency
      response team).




                                 Fig 4.13 Cybersecurity Forum 2010
                               Gibraltar Regulatory Authority Annual Report 2010 / 2011
                                    Work Programme (Radiocommunications & I.C.T)
                                                                                                        39
 Accounting & Reporting

The internal Vote Book Manager software has now been working seamlessly for the
past four years. This package controls the expenditure of the four Divisions within
the GRA and maintains an accurate account of the allocated public spending and
reporting to the Financial Secretary and other Government Departments.

The in-house accounts manager software has now been working for six years
managing the revenue activities of the GRA. This package links all the licence
databases to centrally control the issuing of government receipts. This central
repository of receipt information enables reports to be created at a click of a button
for banking and reconciliation purposes. This removes the tasks of the manual
system and licenses can be renewed at a fraction of the time. Below is a quick
example of how these statistics have helped in the implementation of new policies
to stream line back office duties.
                                                                                               Cheque
                                                                                               Transfer
                                                                                               Cash
                                                                                               Void
 1,200                                                                                         Credit Card

 1,000

   800

   600

   400

   200

     0
          05/06          06/07            07/08            08/09            09/10      10/11
                        Fig 4.14 timeline highlighting forms of payment



                                                                                                 SSL
                                                                                                 Others
   900
   800
   700
   600
   500
   400
   300
   200
   100
     0
           05/06         06/07            07/08          08/09             09/10      10/11
               Fig 4.15 historical timeline highlighting the number of SSL’s issued
                         compared with other licences issued by the GRA



                Gibraltar Regulatory Authority Annual Report 2010 / 2011
       Work Programme (Radiocommunications & I.C.T)
40
     Bespoke Software

      The GRA continues to develop and fine tune bespoke applications designed and
      built in house to aid and automate:

             Accounting;
             Issuing of licences;
             Reporting;
             Filing;
             Spectrum management;

      We are currently amalgamating various stand-alone systems to centrally manage
      and control all aspects of spectrum management.

      All databases will be undergoing a regular review in order to sanitise and streamline
      the code for faster processing and making use of the new hardware and software
      architecture capabilities.


     GRA Website

      The GRA website will be redeveloped in the coming year. A new portal will be
      designed to make full use of current web design trends in order to better interact
      with the public.




                               Gibraltar Regulatory Authority Annual Report 2010 / 2011
                                                                                                                    Satellite
                                                                                                                                41
SATELLITE




SATELLITE CO-ORDINATION                                                                                            42

Satellite Division....................................................................................................42
Satellite Co-ordination..........................................................................................42
Outer Space Act ...................................................................................................45




                      Gibraltar Regulatory Authority Annual Report 2010 / 2011
        Satellite Co-ordination (Satellite)
42
     Satellite Division
      The Satellite Division is responsible for looking after the interests of the satellite
      industry, representing Gibraltar at international meetings on satellite matters and
      ensuring that satellite operators comply with the International Telecommunication
      Union’s (ITU)Radio Regulations and all other international obligations.

      The Satellite Division also manages and assists with the co-ordination of over 20
      satellite locations filed with the ITU through the UK Administration on behalf of SES
      Satellites (Gibraltar) Ltd.

     Satellite Co-ordination
      When an administration intends to launch a satellite into a specific location on the
      geostationary orbit, they must provide the ITU with full technical characteristics of
      the proposed network which must comply with the Radio Regulations and show it
      will not cause harmful interference, to both previously filed and existing operational
      satellites. They must also take account of all the terrestrial radio services of the
      different countries within the satellite’s service area and which share the same
      frequency bands. Administrations must ensure that each filing completes co-
      ordination and the satellite is built and launched within the regulatory period of 7 or
      8 years, depending on the type of service to be provided. Most of the new satellites
      being launched have to be as flexible as the latest technology permits and the
      operators must be prepared to reach compromises in order to operate a viable
      service without causing harmful interference to existing satellite services. The typical
      lifespan of a satellite is 15 to 20 years and throughout this period many new satellites
      will make every effort to squeeze into the already congested geostationary orbit and
      the limited spectrum available, therefore co-ordination is an on-going, essential
      activity in the operation of satellite networks.


                 GEOGRAPHICAL AREAS                       RECEIVED                    SENT

                 Africa                                           0                        4

                 America                                          266                      50

                 Asia                                             210                      214

                 Europe                                           205                      267

                 Middle East                                      21                       117

                 Oceania                                          22                       5

                 TOTAL                                            724                      657


                 Table 5.00 table listing co-ordination correspondence received and sent




                                Gibraltar Regulatory Authority Annual Report 2010 / 2011
                                                          Satellite Co-ordination (Satellite)
                                                                                                    43
 Satellite Co-ordination cont(2)...

The charts below give an indication of the volume of co-ordination requests the GRA
have processed this year and, when compared with last year’s charts, show that
although the co-ordination workload for the Americas has reduced there has been
a marked increase in the Asian region. This is primarily due to the fact that we have
two operational satellites providing a multitude of services to this area, but also in
the last two years we have seen an overall increase in satellite filings from other
administrations in the key locations around the globe. This has led to a significant
increase in the number of satellites which have been identified as, theoretically,
capable of causing interference to the existing Gibraltar filings. To avoid unnecessary
co-ordination the GRA and the operator, SES Satellites (Gibraltar) Ltd., agreed to
narrow the scope of the analysis and concentrate efforts on potential sources of
interference closer to the Gibraltar filings.



                                                                                          Africa
    Sent                                                                                  America
                                                                                          Asia
                                                                                          Europe
                                                                                          Middle East
                                                                   Received
                                                                                          Oceania




           Fig 5.01 timeline highlighting Terrestrial Licence revenue collected


In total we have received 724 individual requests for co-ordination from other
administrations and through adoption of the new methodology we have been able
to reduce the number of co-ordination requests sent by the GRA from 1,677 last
year to 657 this year which, although a significant reduction, still leaves a substantial
workload. In fact, this still means that during the coming years, we will have to
contact the administrations of over 35 countries to arrange meetings and facilitate
the co-ordination between the operators of all of the affected satellites to ultimately
reach satisfactory mutual co-existence.




                 Gibraltar Regulatory Authority Annual Report 2010 / 2011
        Satellite Co-ordination (Satellite)
44
     Satellite Co-ordination cont(3)...

      Last year, over 400 new filings and modifications to existing filings were registered
      with the ITU. This year, just over 300 new filings and modifications to existing filings
      have been recorded, which shows that last year was an exceptionally busy time for
      the ITU and the whole of the satellite industry. A number of the Gibraltar projects
      have suffered delays and although in some cases the original filings have expired,
      new filings have been submitted, ensuring that these commercially viable projects
      remain alive.
                                                              1677                   1800

                                                                                                  1600

           CS                                                           1294                      1400
           CR                                                                                     1200

                                                                                                  1000
                                                      780
                                                                                            724   800
             593
                                                                                           657    600
                          340
                                       239                                                        400
             216
                          311
                                         88             75                                        200

                                                                                                  0
          2005 / 06    2006 / 07    2007 / 08        2008 / 09       2009 / 10        2010 / 11
            Fig 5.02 line graph highlighting trend of co-ordination correspondence
                                       sent and received

      The trend diagram above, shows there was a sharp increase in co-ordination work
      during last year, which can be attributed to the general increase in global activity
      and also to the fact that all of the main operators have filed for the same orbital
      locations to provide the best coverage of developing markets. This year, there has
      been a settling down of global activity, but nevertheless the geostationary orbit and
      the satellite frequency bands are a finite resource and the questions being asked
      in many forums is just how many more satellites can be accommodated and what
      technological advancements can be used to alleviate the imminent saturation of
      primary locations over the main continents. The ITU has organised workshops to
      address the issue of efficient use of spectrum and orbit resources, and there have
      been proposals from a number of administrations and operators which have been
      discussed. There is no quick-fix solution to this sensitive issue, but a consensus
      was reached that the regulatory framework for managing and registering satellites
      must be improved and changes need to be ready for discussion at next year’s World
      Radiocommunications Conference.

      The GRA is closely monitoring developments and participates in these international
      workshops and the UK’s Satellite Consultative Committee, with the aim of improving
      the regulatory framework and ensuring Gibraltar remains competitive and at the
      forefront of this evolving industry.
                                Gibraltar Regulatory Authority Annual Report 2010 / 2011
                                                          Satellite Co-ordination (Satellite)
                                                                                                45
 Outer Space Act

The Outer Space Act 1986 (the Act) is the legal basis for the regulation of activities
in outer space carried out by organisations or individuals established in the United
Kingdom or one of its Overseas Territories (OTs) or Crown Dependencies (CDs).
The UK’s Outer Space Act 1986 was extended to Gibraltar by The Outer Space Act
1986 (Gibraltar) Order 1996.

The GRA has granted Outer Space Act licences to four satellite networks that
currently provide broadcasting and telecommunication services to Asia and the
Americas. This year, a new licence was granted to SES Satellites (Gibraltar) Ltd.
to operate its recently acquired SES-7 satellite that was drifted into a Gibraltar orbital
slot at 108.2E to complement an existing satellite also licensed by the GRA.




                Fig 5.03 Boeing 601HP Spacecraft Launched 2009
                              Copyright (c) Boeing

The GRA ensures that Gibraltar licensed satellites are operated in compliance with
the UK’s obligations under international treaties and principles covering the use of
outer space, including liability for damage caused by space objects. The GRA liaises
closely with the UK Space Agency, formerly known as the British National Space
Centre (BNSC) and all satellites licensed by Gibraltar are included in the UK’s
Registry of Space Objects.




                 Gibraltar Regulatory Authority Annual Report 2010 / 2011
This page is intentionally left blank...




Gibraltar Regulatory Authority Annual Report 2010 / 2011
                                                                                                         Data Protection
                                                                                                                            47
DATA PROTECTION




DATA PROTECTION REGISTER                                                                                            49

Registration Statistics...........................................................................................49




INTERNATIONAL PARTICIPATION                                                                                         50
Presentations to Youth Centre & Gibraltar College on Privacy
Awareness in Social Networking Sites................................................................50
Data Protection Audit Training in Republic of Ireland..........................................50




AUDITS                                                                                                              51

Measured Activity..................................................................................................51
Inbound Enquiries.................................................................................................51
Investigations........................................................................................................52
Inspections............................................................................................................52




                      Gibraltar Regulatory Authority Annual Report 2010 / 2011
       Data Protection
48
     DATA PROTECTION




     CASE STUDIES                                                                                                        54

       Enforcement..........................................................................................................54
       Cases IV01/10 & IV02/10:
       Complaint against Royal Gibraltar Police............................................................54
       Case IV03/10:
       Complaint against by the Insolvency Service UK (”IS”), with regards to
       Party Gaming PLC’s Obligations.........................................................................59
       Case IV09/10:
       Complaint against Makana Property Ltd.......................................................59
       Case IV06/10:
       Complaint against the Care Agency.....................................................................60
       Cases IV04/10, IV07/10, IV08/10, IV09/10, IV10/10, IV13/10, IV16/10:
       Complaint against Data Controllers for non-compliance with Subject
       Access Requests..................................................................................................60




                                           Gibraltar Regulatory Authority Annual Report 2010 / 2011
                                                     Data Protection Register (Data Protection)
                                                                                                      49
        Data Protection Register

    The Data Protection Act 2004 (“DPA”) requires the Data Protection Commissioner
    to maintain a register of data controllers. The Register contains details of data
    controllers in Gibraltar including contact details and details pertaining to the processing
    operation of personal data carried out by the data controller. In 2006, a system was
    put in place which allows data controllers to register online although the ability to
    register manually remains.


        Registration Statistics

    At the end of the period 2010/11, the Register was comprised of the following:

                 (5%)         (9%)
                                         (3%)                                   Government Department
                                              (3%)
                                                                                Health
                                                                                Bank

                                                   (18%)                        Service
                                                                                Education
                                                                                Retail

                                                (2%)                            Financial Services,
(49%)                                                                           Insurance & Legal

                                         (11%)                                  Gaming & Betting

    Fig 6.00 Detailed Breakdown of Distribution of
             Registered Data Controllers

    Revenue collected as a result of registrations for the period 2010/11 was £1,160.




                     Gibraltar Regulatory Authority Annual Report 2010 / 2011
        International Participation (Data Protection)
50
     International Participation

      The Data Protection Division attended the following international events in the year
      2010/11:

             Spring Conference of the European Data Protection and Privacy
             Commissioners, held in Prague, April 2009
             Meeting of Data Protection Commissioners of the UK, Ireland, Scotland,
             Guernsey, Jersey, Isle of Man, Cyprus, Malta and Gibraltar, held in Malahide,
             Ireland, June 2010
             Data Protection Forum, London – September 2010
             European Data Protection and Privacy Conference, held in Brussels, November
             2010
             Data Protection Forum, London – March 2011


     Presentations to Youth Centre & Gibraltar College on Privacy
     Awareness in Social Networking Sites

      In March 2010, the Data Protection Division, in conjunction with the Gibraltar Youth
      Service and the Royal Gibraltar Police embarked on a programme to present talks
      about privacy issues and dangers of social networking websites to the youth.

      These presentations were given to the Youth Clubs in Gibraltar with various age
      groups attending. Similar presentations were also held at the Gibraltar College.


     Data Protection Audit Training in Republic of Ireland

      In January 2011, a member of the Data Protection Division visited the Data Protection
      Commissioner's Office in the Republic of Ireland. The purpose of the visit, which
      lasted 5 days, was to obtain an in-depth understanding of how the Irish Data Protection
      Commissioner carried out audits in Ireland. During the visit, participation in several
      audits was undertaken.




                               Gibraltar Regulatory Authority Annual Report 2010 / 2011
                                                                             Audits (Data Protection)
                                                                                                        51
     Measured Activity

 The year 2010/11 saw the following measured activity take place. Activity is divided
 into three categories - inbound enquiries, investigations and inspections.

     Inbound Enquiries

 An enquiry is a request for advice about data protection from a third party which
 does not require further action to be taken by the Division after the advice has been
 given. All registration related enquiries are not counted as being part of the Inbound
 Enquires.

 Upon receipt of an enquiry by phone, email or letter, it is assigned a unique reference
 which remains with the enquiry until it is resolved. In many cases, enquiries may
 be dealt with in a single phone call or via an email. However, it has been found that
 many enquiries require several phone calls or emails before they are resolved.

 In the period 2010/11, 86 Inbound Enquiries were logged. The Inbound Enquiries
 for the period 2010/11 are broken down in categories as Public Sector, Private Sector
 & Individual:



        (23%)
                                                                             Public Sector
                                                    (35%)
                                                                             Private Sector
                                                                             Individual




                (42%)
45
40
35
30
25
20
15
10
5
       2007/2008             2008/2009                2009/2010                 2010/2011
 Fig 6.01 Categorisation & historical timeline of enquiries logged using the TIMES system

                  Gibraltar Regulatory Authority Annual Report 2010 / 2011
       Audits (Data Protection)
52
     Investigations

      Under section 25 of the DPA, the Data Protection Commissioner is empowered to
      carry out investigations to ensure compliance with the DPA irrespective of whether
      a complaint has been made. An investigation is any process which sees the Division
      taking action either as the result of a complaint or as a result of information obtained
      as part of the day to day function of the Division and which raises doubts as to
      whether the DPA is being complied with. “Action” in this case may range from the
      making of an enquiry to a data controller in order to determine compliance with the
      DPA, to the issuing of an Information or Enforcement Notice in accordance with
      sections 26 and 27 of the DPA. By applying this formula, an investigation is different
      from an inspection in that an inspection may be undertaken without a complaint or
      doubt about compliance existing. Investigations and inspections however are
      commenced by virtue of the powers granted to the Data Protection Commissioner
      under section 25 of the DPA.

      The period 2010/11 saw the Division undertake 19 investigations. This is over a
      25% increase on the previous year. Please see the Case Studies section for a
      review of some of the investigations which can be published. Please note that details
      about some investigations may not be published due to commercial sensitivity or
      the risk of identifying of an individual.


     Inspections

      In order to monitor compliance with the DPA, the Division commenced an inspection
      programme during the course of the year. An inspection can be carried out by virtue
      of section 25 of the DPA and its aim is to check data controllers in order to ensure
      their compliance with the various aspects of data protection.

      In order to ensure that inspections are not invasive to the point of being overly
      burdensome on the data controller being inspected, the Division has ensured that
      the inspections last no more than 3 hours and that they are carried out with full
      consent and in the presence of an authoritative member of the data controller being
      inspected. The procedure has been developed to run as follows:

      Pre-Inspection
             A sector to be inspected is selected
             A list of all the registered data controllers within the sector is composed and
             one is selected at random
             The data controller is informed by letter of the intended visit and all details
             pertaining to the reason for the visit and a date for the inspection is suggested
             A new date is negotiated if that offered originally is unsuitable for the data
             controller
             Prior to the inspection, the data controller is informed by letter of the aspects
             of data protection which the Inspection Team intends to inspect


                               Gibraltar Regulatory Authority Annual Report 2010 / 2011
                                                                            Audits (Data Protection)
                                                                                                       53
 Inspections cont(2)...

Inspection
      Upon arrival at the data controller’s premises, the Inspection Team meets
      with an appointed person(s), usually a person in charge of data protection
      matters;
      During the meeting the Inspection Team highlights the aspects of data
      protection which are to be inspected, taking into account any matters which
      the data controller wishes to highlight as regards compliance;
      A visual tour of the premises is carried out and any issues pertaining to non-
      compliance with the DPA are highlighted;
      The Inspection Team meets with the appointed person(s) again to discuss
      the results of the inspection;
      About a week after the inspection, the data controller is informed of the result
      of the inspection by way of a letter which highlights any recommendations
      in order that the DPA is complied with;
      If there is any doubt as to the data controller applying changes to meet the
      recommendations, a further inspection may be carried out.

During the period 2010/11, 6 Inspections were carried out. These were carried out
on the following data controllers:

      LAB (a private company specialised in data storage)
      Income Tax Office
      Bishop Fitzgerald Middle School
      St Anne’s Middle School
      Sacred Heart Middle School
      St Joseph’s Middle School




                 Gibraltar Regulatory Authority Annual Report 2010 / 2011
       Case Studies (Data Protection)
54
     Enforcement Notices

      Sections 26 and 27 of the DPA grant the Data Protection Commissioner (the
      “Commissioner”) the power to issue Enforcement Notices and Information Notices.
      Failure to comply with the terms of such notices is an offence.

      The DPA reads:

      “26.(1) If the Commissioner is of the opinion that a person has contravened or is
      contravening a provision of this Ordinance he may, by notice in writing (referred to
      in this Ordinance as an “enforcement notice”) served on the person require him to
      take such steps to comply with the provision concerned as are specified in the notice,
      within such time as is specified.”

      During the period 2010/11, three Enforcement Notices were issued in order to ensure
      compliance with the DPA. These were served on the following data controllers:

             Royal Gibraltar Police
             Gibraltar Health Authority
             Public Services Commission (later withdrawn at the request of the Complainant)

      In all three cases, the notices were issued to ensure that the data controllers complied
      with a subject access request correctly. Details of some the cases can be seen in
      the Case Studies section below.


     Case IV01/10 & IV02/10:
     Complaint against Royal Gibraltar Police
     25th May 2010

      The Complainant advised the Commissioner that he had submitted two subject
      access requests (SAR) to the Royal Gibraltar Police (RGP) and, at the time of the
      complaint, neither request had been complied with. The first SAR, dated 25th March
      2010, requested the RGP supply copies of any CCTV footage held on the Complainant,
      which was recorded during the “early morning of the 15th March 2010 and throughout
      the same day”. The second SAR, dated 31st March 2010, requested the RGP to
      supply copies of any information held on the Complainant, including photographs
      and fingerprints.

      On 1st April 2010, the Complainant received written confirmation of receipt of the
      second SAR which stated “[y]our request is being dealt with by the Special Branch”.
      On 22nd April 2010 the RGP advised the Complainant by telephone that he may be
      required to pay a fee. Other than that, the Complainant was not supplied with any
      of the information requested.

      On 24th May 2010, the Complainant sent the RGP another letter stating that he had
      not received replies to his two SARs. The Complainant submitted his complaint to
      the Commissioner on 25th May 2010.



                               Gibraltar Regulatory Authority Annual Report 2010 / 2011
                                                                       Audits (Data Protection)
                                                                                                  55
 Case IV01/10 & IV02/10: cont (2)...
 Complaint against Royal Gibraltar Police
 25th May 2010

Findings of the Investigation
During the investigation carried out by the Commissioner, it was found that the CCTV
footage was no longer available due to it having been deleted as part of the CCTV
system’s functionality. It was further found that the other information which the
Complainant sought was available and the RGP was required to comply with the
SAR.

Failure to Comply with First SAR
Under s14 (4) DPA, if a data controller is processing personal data about a data
subject, it must comply with a SAR within 28 days.

The Complainant made the first SAR on 25th March 2010 which requested the
CCTV footage be provided. The RGP was obliged to comply with this SAR by 22nd
April 2010.

The RGP attempted to obtain the CCTV footage on the 29th March 2010 after which
it encountered a problem in retrieving the CCTV footage. After the database had
been restored, the CCTV footage was available between 29th March 2010 and, at
least, until the 13th April 2010

The RGP did not make available to the Complainant, in compliance with its obligations
under s14 DPA, the CCTV footage which was retrieved after the database had been
restored. Furthermore, it appeared that no attempt was made by the RGP to preserve
the CCTV footage after it was made available again on the 29th March 2010, four
days after the Complainant requested the disclosure of the CCTV footage in his first
SAR dated 25th March 2010.

Given the above failure after the CCTV footage was recovered, no attempt was
made to preserve the CCTV footage so that it could be made available to the
Complainant as per his rights under the DPA. The RGP had knowledge of the CCTV
system’s limitations and was therefore aware that the CCTV footage was due to be
deleted 28 days after recording. Allowing the CCTV footage to be lost after it became
the subject of a SAR can only be seen as falling far short of the standards to be
expected from any data controller as regards its duties under the DPA.

The RGP had maintained throughout that the CCTV images were not available due
to a “technical glitch”. On 28th May 2010, the RGP wrote to the Commissioner
saying, inter alia, “[W]hilst regrettable, it is a fact that the footage, not just for the
period subject to the SAR is not available, purely for technical reasons and no other.”

On 15th June 2010, in reply to additional questions from the Commissioner, the
RGP wrote, inter alia, “[S]ubstantial work was undertaken thereafter to establish
whether the CCTV images could be retrieved, unfortunately whilst the files for the
period stated are accessible there is no footage recorded as a result of the power
failure that had caused an interruption to the wireless link. This was finally established
on Monday 26th April 2010.”

                 Gibraltar Regulatory Authority Annual Report 2010 / 2011
       Case Studies (Data Protection)
56
     Case IV01/10 & IV02/10: cont (3)...
     Complaint against Royal Gibraltar Police
     25th May 2010

      In a further letter, the RGP wrote to the Commissioner on 23rd June 2010 saying,
      inter alia, “[I]t is unfortunate that a technical glitch should have resulted in the loss
      of images for the period 10th to 24th March 2010, but that is the case.”

      On 30th September 2010, the RGP recognised that the unavailability of the CCTV
      images had not solely been due to a technical glitch. The RGP wrote to the
      Commissioner saying, “[U]nfortunately, due to a series of “technical glitches” and
      extenuating circumstances it was not possible to take definitive steps to recover the
      CCTV footage until Thursday 15th April 2010 by which time it was too late”.

      The Commissioner did not accept that the “extenuating circumstances” referred to
      by the RGP lessen the seriousness of the RGP’s failure to recover the CCTV images.

      The Commissioner did not accept that a “technical glitch” was the primary reason
      for the loss of the footage. He found that the first SAR was not complied with due
      to the failure of the RGP. He concluded that the RGP had had ample opportunities
      to recover the CCTV images which were lost due to a lack of proper care and
      attention to what was required under the DPA.

      In any event, even accepting that the CCTV footage might have been lost due to a
      “technical glitch”, the RGP would be found to have breached section 6(1)(d) DPA
      which obliges data controllers to take “appropriate organisational and technical
      security measures…to protect personal data against accidental or unlawful destruction
      or accidental loss, alteration, unauthorized disclosure or access”.

      The Commissioner noted that the RGP said it had learnt from this experience. In
      its letter of 30th September 2010, the RGP wrote “… I am confident that the system
      in place, coupled with a heightened sense of urgency in recovering CCTV footage
      when … SAR’s are received is now sufficiently robust for such an episode not to be
      repeated.”

      The Second SAR
      The Complainant made the second SAR on 31st March 2010 which requested that
      any information held on the Complainant, including photographs and fingerprints be
      provided. The RGP was obliged to comply with the second SAR by 28th April 2010.

      Whilst it is only after the Commissioner’s investigation that the second SAR was
      complied with, the Commissioner found that the RGP had attempted to comply with
      its duties under the DPA in a manner incompatible with the spirit of the DPA and
      more importantly, the right to privacy granted by the DPA.

      Upon reviewing the Letter, the Commissioner found that the manner in which the
      RGP attempted to carry out its obligation to provide the fingerprints and photographs
      did not conform to the provisions of the DPA.




                                Gibraltar Regulatory Authority Annual Report 2010 / 2011
                                                              Case Studies (Data Protection)
                                                                                               57
 Case IV01/10 & IV02/10: cont (4)...
 Complaint against Royal Gibraltar Police
 25th May 2010

The Commissioner noted that as regards the second SAR, the RGP had failed to
fully carry out its duties under the DPA. The RGP complied fully with its duties as
regards the second SAR after having been served with an Enforcement Notice.

Conclusions
Based on the above findings, the Commissioner concluded that the RGP has shown
negligence in carrying out its duties under the DPA by allowing the CCTV footage
to be lost after it became the subject of the first SAR. As regards the second SAR,
the Commissioner was found that the RGP had carried out it duties in a dilatory
manner.

The Commissioner concluded that the RGP had breached the provisions of the DPA.
However, taking all relevant matters into consideration, the Commissioner decided
it would not be in the public interest to take any further action.

 Case IV03/10
 Complaint against by the Insolvency Service UK (“IS”), with regards
 to Party Gaming PLC’s Obligations
 26th April 2010

Background
The IS advised the Commissioner that it was being prevented from fulfilling it’s
statutory duty to investigate the cause of bankruptcy of an individual by the refusal
of Party Gaming PLC to deal appropriately to requests for information about gambling
losses incurred by the Bankrupt, by failing to apply the legislation in the DPA, and
thereby hampering action by the IS that is in the public interest in reporting potential
misconduct to the court.

The IS advised that where a bankruptcy order has been made against an individual
the official receiver has a statutory duty to investigate the conduct and affairs of the
bankrupt under section 289 of that UK’s Insolvency Act 1986. The official receiver
often required information from data controllers in order to discharge the duties
imposed upon it by the Insolvency Act 1986 in connection with potential legal
proceedings. In this instance a bankruptcy order was made against an individual
and the official receiver became aware of gambling losses incurred by the bankrupt
through an account he held with Party Gaming PLC.

The official receiver wrote to Party Gaming on 14th January 2010 requesting
statements of wins and losses incurred by the Bankrupt.

Party Gaming responded to this request with a standard refusal. The IS claimed
that Party Gaming failed to apply the appropriate sections of the DPA that would
have allowed them to provide the information requested and thereby delayed or
prevented the official receiver’s investigations.



                Gibraltar Regulatory Authority Annual Report 2010 / 2011
        Case Studies (Data Protection)
58
     Case IV03/10
     Complaint against by the Insolvency Service UK (“IS”), with regards
     to Party Gaming PLC’s Obligations
     26th April 2010
      The official receiver sent a further enquiry to Party Gaming on 29th March 2010
      setting out the parts of the DPA that allowed them to release personal information
      about the Bankrupt. This letter enclosed a copy of the bankruptcy order and consent
      to disclosure signed by the bankrupt. Party Gaming again refused to comply.

      The Commissioner was advised that the impact of these refusals was that the official
      receiver was unable to evidence gambling losses stated by the Bankrupt and was
      therefore unable to establish a true cause of the bankruptcy. Where gambling losses
      have taken place at a time prior to the bankruptcy when the Bankrupt was aware
      of his insolvent position i.e. made use of credit for gambling to the detriment of
      creditors, then the official receiver has a duty to consider an application to the court
      for a Bankruptcy Restriction Order.

      The IS advised that in some bankruptcy cases gambling losses are stated as a
      cause of bankruptcy where in fact the bankrupt may be seeking to hide the true
      disposal of assets. Unless the official receiver is able to evidence these alleged
      gambling losses it remains a possibility that the loss of assets cannot be properly
      investigated and the bankrupt’s creditors are disadvantaged.

      The remedy that the IS sought from the Commissioner on behalf of all official
      receivers was that Party Gaming (and all other Gibraltar-based casinos) be advised
      of the provisions of the DPA, and requested to comply with information requests
      they received from official receivers undertaking requests for information, where the
      bankrupt has signed a consent to disclosure or where an exemption existed under
      the DPA.

      Findings of the Investigation
      After considering the matter, the Commissioner concluded as follows:

      The powers granted to the IS by the Insolvency Act 1986 does not extend to Gibraltar.
      Thus, contrary to the UK, where such powers may oblige a data controller to comply
      with a request by the IS, a Gibraltar-based data controller is under no obligation to
      take into account such powers.

      The Commissioner also found that the IS had sought to rely on section 7 DPA which
      allows “the performance of the Government or a Minister of the Government” to be
      a legitimate reason for processing personal data. The Commissioner found, however,
      that this provision does not extend to the UK Government (or any other foreign
      government) and so, the fact that the IS could be construed to be performing a
      function of the UK government was not relevant.




                               Gibraltar Regulatory Authority Annual Report 2010 / 2011
                                                              Case Studies (Data Protection)
                                                                                               59
 Case IV03/10
 Complaint against by the Insolvency Service UK (“IS”), with regards
 to Party Gaming PLC’s Obligations
 26th April 2010
The only factor under which Party Gaming PLC could provide the IS with the
Bankrupt’s personal data was where the Bankrupt has consented to the data being
provided. Even with this being the case, such consent did not oblige Party Gaming
(or indeed any data controller) to actually process the personal data in such manner.
The Commissioner found that such consent was purely a condition under which
processing of such personal data may be carried out legitimately. Thus, Party
Gaming PLC was not obliged to comply with the IS’ request.

The Commissioner found that given the above, the IS did not have any power to
oblige a Gibraltar-based data controller to comply with such a request (other than
through appropriately executed court orders). The IS was also advised to reconsider
its request that Gibraltar-based data controllers be advised by of the provisions of
the DPA and advised to comply with requests from the IS.

The Commissioner noted that whilst such an action would ensure that the IS’ role
be simplified, it concluded that a data controller can only be asked to perform a task
by the Commissioner, when such a task is a requirement of the DPA. Thus, asking
a data controller to perform a task which does not involve compliance with the DPA
would in fact cause the Commissioner to act ultra vires, or beyond his powers.

The IS was instead directed to section 14 DPA which deals with Subject Access
Requests. A data subject such as the Bankrupt was entitled to a copy of personal
data held about him upon request. Compliance with such a request is an obligation
under the DPA and were such a request be made to Party Gaming PLC by the
Bankrupt, Party Gaming PLC would be obliged to comply.

 Case IV09/10
 Complaint against Makana Property Ltd
 3rd March 2011

The Commissioner received a complaint about an email sent by Makana Property
Ltd which was in breach of the DPA.

The Complainant provided the Commissioner with a copy of the email which was
sent which showed that just over 900 email addresses had been disclosed. The
email’s format was such that it was possible for each of the 900+ recipients to view
each others’ email address. Whilst it was impossible to establish whether every
recipient has given their consent for their email address to be disclosed in such
manner, the Complainant assured the Commissioner that he had not. The
Commissioner therefore assumed that Makana Property Ltd has not sought such
consent from the other recipients. Makana Property Ltd was therefore asked to
immediately cease such communications.

Makana Property Ltd admitted the error and stated that measures had been taken
to ensure that such errors did not occur in future.

                Gibraltar Regulatory Authority Annual Report 2010 / 2011
        Case Studies (Data Protection)
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     Case IV06/10
     Complaint against the Care Agency
     5th July 2010

      Background
      The Commissioner was advised by the Complainant that a subject access request
      (“SAR”) had been made to the Care Agency. The SAR was made on the 28th May
      2010 and specifically asked the Care Agency to supply the Complainant with travel
      information pertaining to the Complainant’s daughter. The Commissioner was
      advised that the Complainant’s daughter was aged 10, but that the Complainant did
      not have custody of the minor. The Care Agency had not complied with the SAR.

      Under the DPA a data subject, including a minor, is entitled to make a SAR to a data
      controller. In the absence of any exemptions and/or valid reasons for not complying
      with the request, any personal information held about the data subject must be
      disclosed following a SAR. In the case of a minor (this being a person under the
      age of 16 as regards the DPA) a parent or legal guardian may make a request on
      the minor's behalf.

      However, the Commissioner found that as the Complainant did not have custody
      of her daughter, it would not be correct to interpret this to mean that a parent without
      custody was entitled to make such a request on the minor's behalf. Under the
      circumstances, the Commissioner was not satisfied that the Complainant was able
      to carry out a SAR on her daughter’s behalf.


     Cases IV04/10, IV07/10, IV08/10, IV09/10, IV10/10, IV13/10, IV16/10:
     Complaints against Data Controllers for non-compliance with
     Subject Access Requests

      Complaints were received against the following data controllers with respect to SARs
      which had not been complied with or not complied with fully:

             Ministry of Employment, complaint received on 7th June 2010
             Gibraltar Health Authority, complaint received on 16th July 2010
             Electraworks Ltd. (Party Gaming), complaint received on 16th August 2010
             No.6 Convent Place, complaint received on 26th August 2010
             Royal Gibraltar Police, complaint received on 26th August 2010
             Gibraltar Health Authority, complaint received on 23rd November 2010
             (Enforcement Notice Issued)
             Gibraltar Health Authority, complaint received on 11th February 2011

      In all cases, the respective data controller was asked to comply or outline why it had
      not done so. In all cases, the data controller complied with the SAR after the
      Commissioner investigated the matter.



                               Gibraltar Regulatory Authority Annual Report 2010 / 2011
                                                                                                             Gambling
                                                                                                                        61
GAMBLING




REGULATORY FRAMEWORK                                                                                          63

The Gambling Act 2005........................................................................................63
The Gambling Commissioner..............................................................................63
The Gambling Division.........................................................................................64


REGULATING THE INDUSTRY                                                                                       64

Codes of Practice & Guidelines...........................................................................64
Events where the Gambling Commissioner is a Participant...............................65
Working with Licence Holders..............................................................................66
Liaison with other Regulators & Jurisdictions......................................................67
Complaints from Players......................................................................................67
Suspicious Activity Reports (SAR’s)....................................................................71
Other ‘Criminal’ Activities......................................................................................71


THE INDUSTRY IN GIBRALTAR                                                                                     72

Remote Gambling ................................................................................................72
Land Based Industry.............................................................................................72
Problem Gambling in Gibraltar.............................................................................73



                     Gibraltar Regulatory Authority Annual Report 2010 / 2011
     Gambling
62
 GAMBLING




 WORK PROGRAMME                                                            74


 OPERATORS & LICENCES                                                      75




                Gibraltar Regulatory Authority Annual Report 2010 / 2011
                                                          Regulatory Framework (Gambling)
                                                                                            63
 The Gambling Act 2005

The Gambling Act 2005 ("the Act") came into operation on 26 October 2006 to repeal
the Gaming Act, a law originally enacted in 1958.

The purpose of the Act is to modernise Gibraltar's legislation and to create a statutory
licensing and regulatory framework to suit Gibraltar's status as 'home to the world's
leading online gambling operators'.

The Act provides for a Licensing Authority, currently the Minister with responsibility
for Gambling, and a Gambling Commissioner, with both entities having separate
responsibilities.

Gibraltar remains committed to the principles:

       That remote gambling should be conducted responsibly and with safeguards
       necessary to protect children and vulnerable people;

       That remote gambling should be regulated in accordance with generally
       accepted international standards to prevent fraud, money laundering and
       other crime, and should not be permitted to be a source of crime;

       That, where offered, remote gambling should be verifiably fair to the consumer.


 The Gambling Commissioner

The GRA was appointed as the Gambling Commissioner ("the Commissioner") and
commenced its duties as from the date the law was enacted.

The objectives of the Commissioner are to ensure:
       that licence holders conduct their business undertakings in accordance with
       the terms of their licences;
       that they conduct their business in accordance with the provisions of the Act;
       and that they conduct their business in a manner that maintains Gibraltar's
       good reputation as a first tier jurisdiction.




                Gibraltar Regulatory Authority Annual Report 2010 / 2011
       Regulating the Industry (Gambling)
64
     The Gambling Division

      The Gambling Commissioner operates through the Gambling Division, whose
      responsibilities include:
             Liaising with and overseeing all operations of licensees, in particular the
             regulation, supervision and enforcement of licence terms and relevant laws;
             Advising the Gambling Commissioner, Licensing Authority and Minister
             responsible for gambling, as required, on all matters concerning the regulation
             of the gambling industry;
             Carrying out regulatory policies, procedures and investigations;
             Representing the jurisdiction at international forums;
             Carrying out detailed assessments of licence applications as required and
             preparing advice to the Licensing Authority;
             Initiating and carrying out investigations of possible breaches of licences or
             relevant laws;
             Examining and resolving disputes between licensees and users;
             Preparing Codes of Practice for licensees and generalinformation for users;
             Liaising with regulators in other jurisdictions with regard to the developing
             practice of licensing and regulation of online gambling.


     Codes of Practice & Guidelines

      In pursuit of the objectives, the Commissioner has a mandate under the Act to draw
      up and publish Codes of Practice aimed at ensuring good business practice on the
      part of the licence holders. Codes of Practice, however, can only be released with
      the consent of the Minister, following consultation with the industry and the Licensing
      Authority.

      During 2008, the Minister approved the first code of practice for the Gibraltar gambling
      industry, the Generic Code. This is the primary code for the industry and its
      implementation and monitoring continued throughout 2010, and it remains a key
      element of the Gambling Division’s work. Monitoring will include the introduction
      of cyclical Regulatory Returns and the formalisation of site and premises visits and
      the bespoke examination of operators’ arrangements.

      In the last year, the Commissioner concluded, in consultation with the industry, a
      second code in respect of Money Laundering and Counter Terrorist Financing
      (AML/CTF). This has now been approved by the Minister for implementation by the
      industry. Work will continue during 2011 to ensure the industry properly embraces
      the requirements of this Code.

      In progressing these Codes the Minister has agreed the process by which the
      Commissioner should issue formal guidelines to the industry. Guidelines are more
      flexible and dynamic than Codes, and in meeting the mandatory requirements of a
      Code (or a statute) guidelines are to be regarded as a means through which a
      requirement can be met, rather than being obligatory and the only way.



                               Gibraltar Regulatory Authority Annual Report 2010 / 2011
                                                            Regulating the Industry (Gambling)
                                                                                                 65
 Codes of Practice & Guidelines cont (2)...

The Remote Technical and Operating Standards consultation document is currently
under consultation. This document has been prepared as a series of guidelines on
how approved Standards should be achieved, rather than a code that requires a
particular or single method, and the draft document has been extended to include
responsible gambling practices. In recognition of the ever-changing technology and
diverse market of remote gambling, remote gambling licence holders will be required
to demonstrate that they meet or exceed the given Standard, by either applying the
guideline or moving beyond it.

The Generic Code, the AML Code, the Remote Technical and Operating Standards
and Regulatory Returns of key statistical data will form the basis against which the
Gibraltar gambling industry will be formally examined and assessed. The overwhelming
majority of the issues addressed in these arrangements are already embedded in
the Gibraltar gambling industry, but it is increasingly the case that the industry has
to be able to demonstrate to a wider audience that it operates at the highest levels
of consumer protection, technical integrity and social responsibility.

 Events where the Gambling Commissioner is a Participant
The Gambling Division has participated in various local and international initiatives
both as part of its duties, and to assist or learn from other jurisdictions engaged in
gambling regulation.

The Gambling Division attended the EU Presidency Remote Gambling Forum at the
European Commission in Brussels in October 2010. Under the guidance of the
Belgian Presidency, representatives of member states with an interest in the regulation
of remote gambling met for a day’s workshop in order to identify opportunities and
barriers to more systematically regulate remote gambling across the EU. It remains
the case that there is a diversity of opinion on the value and nature of ‘local regulation’
of online gambling. The Gambling Division continues to work with member states’
regulatory authorities as they develop their approaches to regulation. The EU
Presidency has continued to develop this work to include greater levels of co-
operation and communication between regulators whilst in parallel the European
Commission has issued a consultation paper (Green Paper) on remote gambling
services within the EU.

The Gambling Division participated in the Gambling Regulators’ European Forum
(GREF) in Berne in June 2010. GREF provides an opportunity for European
regulators to update each other on a wide range of common issues, including
technological developments, responsible gambling practices, illegal gambling activities,
and market developments. Members of the Gambling Division are also contributors
to the GREF technical issues and responsible gambling sub-groups that meet and
consult on an ad hoc basis during the year.

The Head of Gambling Regulation attended the International Association of Gambling
Regulators’ (IAGR) conference in Washington in October 2010. This conference
is the primary event for regulators from Asia, Australia, the United States and other
major states, to meet and share their experiences and expectations of the remote
and land based gambling industries.
                 Gibraltar Regulatory Authority Annual Report 2010 / 2011
        Regulating the Industry (Gambling)
66
     Events where the Gambling Commissioner is a Participant cont(2)...

      The Gambling Division also participated in the International Association of Gambling
      Regulators' working groups during the course of the year. The Gambling Division
      has been a participant in the ongoing IAGR technical sub- group developing guidance
      for regulators on common technical, operating and compliance and enforcement
      arrangements for remote gambling. The Division is actively involved in the eGambling
      Working Group of IAGR has taken a lead role in collating and representing the
      different models of compliance and sanctions available to regulatory authorities, an
      update of the Technical Standards document and the introduction of standards for
      remote betting arrangements. The main purpose of the eGambling Working Group
      forum is to identify and share good practice amongst regulators and governments
      around the world that supervise remote gambling operators. Participants include,
      but are not limited to, the UK, Isle of Man, Jersey, Antigua, Kahnawake, Malta,
      Sweden, Italy, France, Denmark and Alderney.

      The Gambling Division was also represented at the European Igaming Expo and
      Conference in Copenhagen in October 2010. This provided a useful opportunity to
      meet with industry representatives from across the world as well as other regulators,
      and receive updates in respect of various industry trends and developments.

      The Gambling Division again attended at the annual International Regulator's meeting
      and the International Casino Exhibition held at Earls Court, London from 25-27
      January 2011.

      The Gambling Division has also been represented at a range of professional and
      legal events across Europe considering future developments in land based and
      remote gambling, anti money laundering measures, and developments in financial
      and information services.

     Working with Licence Holders

      In addition to visits and meetings to discuss general regulatory issues, the Gambling
      Division has continued to meet with various operators on a wide range matters
      specific to individual operators. These have included the provision of system and
      account information in connection with bona fide and unfounded complaints, as well
      as the consideration of technical and operational development proposals.

      The remote industry has also met collectively with the Gambling Division through
      the auspices of the Gibraltar Betting and Gaming Association (GBGA) in order to
      identify and address areas of general interest or concern.

      These arrangements underline the value of the unique structure of the gambling
      industry in Gibraltar. With under 20 companies holding licences the principals of
      those organisations are able to be directly involved in day to day regulatory
      arrangements first hand and often with minimal notice. Nowhere in the world is
      there such direct and immediate access between the gambling community and the
      regulatory body.



                               Gibraltar Regulatory Authority Annual Report 2010 / 2011
                                                           Regulating the Industry (Gambling)
                                                                                                67
 Working with Licence Holders cont (2)...

Given the changing demands on the industry and the constant development of new
and novel opportunities, such short and direct lines of communication are in regular
use and a range of issues have fallen to be addressed by the Gambling Division
and the Licensing Authority in an effort to keep the industry at the forefront of the
remote market and regulation.

The Commissioner is committed to ensuring the industry remains at the forefront
of the world market for remote gambling services, whilst at the same time, continues
to develop and demonstrate necessary and desirable regulatory standards.

The visits also gave licence holders the opportunity to raise emerging issues in
relation to the new licensing and regulatory framework, and any other matters related
to the industry at large.

 Liaison with other Regulators & Jurisdictions

2010 saw an unprecedented number of visits to Gibraltar by regulators and gambling
licensing or supervisory bodies from other jurisdictions in the United States and
Europe. The Commissioner welcomes the opportunity to learn from and share good
practice with other Regulators and is grateful for the support of operators in hosting
and providing further direct access to management, staff and facilities on these
occasions. Without exception, international visitors comment positively on the direct
and immediate access we have to the operators located here, and the obvious
transparency and accountability our arrangements offer.


 Complaints from Players

The Commissioner has a legal duty to ensure that any complaints by customers
about licence holders are handled fairly and properly. A small number are referred
to the Commissioner each month, usually by the complainant, but occasionally by
the operator. In order to have a transparent system to address complaints, since
2006 the Gambling Division has used a Complaint Resolution Procedure ("CRP")
with an accompanying Complaint Resolution Request Form ("CRRF").

Complaints that have not been referred to the operator are treated as ‘informal’
complaints. In some cases they are dealt with immediately by Gambling Division
staff as they amount to no more that giving general advice about operators’ procedures
around matters such as why payments have been delayed (usually mandatory
identification procedures). Where the complaint is more substantive the complainant
is advised to contact, or re-contact the operator in order to conclude the operator’s
complaints process.

Complaints that cannot be resolved with the operator or an independent adjudication
service, that are subsequently referred to the Commissioner, are recorded as ‘formal’
complaints. The Commissioner will only examine formal complaints received via the
CRP/CRRF arrangements.



                Gibraltar Regulatory Authority Annual Report 2010 / 2011
        Regulating the Industry (Gambling)
68
     Complaints from Players cont (2)...

      Information for persons considering making a complaint about a licence holder is
      available on the GRA Gambling Division website. Many complaints arise from
      customers failing to abide, or deliberately trying to circumvent, licence holders’
      published terms and conditions. Moreover, whilst the Commissioner treats all
      complaints objectively and sympathetically, a substantial number of complainants
      attempt to mislead and deceive the Commissioner’s staff and the licence holder.
      The website advice seeks to assist potential complainants in properly considering
      the merits of their complaint and the steps to take if they intend to pursue it.

      The Commissioner strongly believes that other than in the most exceptional
      circumstances, customers must first use the licence holder’s customer services, or
      similar facilities, to address any complaint. If the Commissioner concludes that all
      possible avenues of resolution have been exhausted, even then, the Commissioner
      might conclude that the complaint would be addressed in a more suitable manner
      by a reputable independent adjudication body. Where the complaint is subject to
      examination by the Commissioner, then a specific member of the Gambling Division
      is appointed to undertake that task under the supervision of the Head of Gambling
      Regulation, and report to the Commissioner his findings. The Commissioner requires
      complaints to be judged on the balance of probabilities, applying the principles of
      ‘reasonableness’, and in the light of the information available at the time the incident(s)
      took place. This amounts to a careful, systematic and objective establishment of
      the facts of the incident, as can be determined from the information available, set
      against operators’ legal obligations.

      Experience to date indicates that most complaints arise out of a failure by customers
      to understand or follow the stated terms and conditions of the licence holder.
      However, a small but significant number of complaints arise out of technical faults
      or ‘bugs’ in software, staff errors or misjudgements, or misapplication of operators’
      policies by staff. Invariably, complaints involve an expectation by the complainant
      that they will receive a financial settlement in their favour, either by way of an award
      of disputed winnings or reimbursement of lost wagers.

      During the last year, the Gambling Division has dealt with an increasing number of
      complaints generally associated with the largest operators, reflecting the scale and
      diversity of their operations.

      The nature of the complaints examined includes the following;

             Players claiming to have been allowed to gamble after invoking the ‘self
             exclusion’ process. None of these cases have been found in favour of the
             complainant, rather, the complainants are generally found to be seeking to
             use to their advantage, as formal self exclusion agreements, loose or general
             references to account closures in telephone calls to customer service staff,
             or other ad hoc communications, in an effort to recover lost funds. Some of
             these complaints have strong undertones of experienced and abusive
             customers threatening to exert unjustified pressure on operators through the
             media or other means.



                                Gibraltar Regulatory Authority Annual Report 2010 / 2011
                                                        Regulating the Industry (Gambling)
                                                                                             69
Complaints from Players cont (3)...

    Unfair game outcomes. A number of players become convinced that their
    preferred numbers ‘never come up’ or that card or other outcomes are fixed
    or other players are unfairly winning. Investigation of the true distribution of
    outcomes, returns to player rates and other analyses show that such complaints
    are based on misunderstandings or misconceptions about how games actually
    work. The strong and transparent testing regimes used by operators and
    accessed by Gambling Division staff invariably provides the evidence that
    such concerns are demonstrably untrue.

    A number of complaints were received following operators freezing accounts
    or suspending cash outs due to suspicious activity by the customer. This
    often revolved around the identification or banking information subsequently
    provided by the customer being inconsistent with that initially provided and
    held by the operator. Again, these complaints are usually unfounded with
    customers failing to appreciate the procedures licence holders apply before
    paying out winnings or returning deposits.

    Related to the above issue is that of poker players who are known to each
    other colluding in their play or using the facilities to ‘chip dump’ for malign or
    innocent reasons. Notwithstanding that these actions are likely to be in breach
    of the operator’s terms and conditions, such play triggers security alerts and
    the accounts have to be properly investigated. As this may involve waiting
    to see if any deposit method generates a fraud report, the delay and
    inconvenience the parties have brought on themselves can lead to considerable
    frustration.

    Bonus terms and conditions continue to frustrate both the methodical bonus
    ‘hunters’ and ‘abusers’ and the less wary novice customers. In part due to
    the way they are promoted by operators, bonuses are often wrongly regarded
    as ‘free money’ that the player can quickly withdraw. Operators have a
    responsibility to ensure that the typical player realises that the bonus is there
    to attract customers and stimulate play (or bets) and is not, generally, available
    for withdrawal. We recognise that the scale of organised bonus abuse creates
    operational difficulties for operators but will continue to encourage our operators
    to ensure that this area of confusion is further reduced during 2011 by making
    relevant terms and conditions more explicit.

    The level of organisation and communication around bonus abuse is replicated
    in other areas of remote gambling with chat room issues quickly developing
    a wide audience and issues being amplified. The Commissioner has dealt
    with a number of these cases with a corresponding increase in the scale of
    work.

    Technical ‘bugs’ and disruptions are an inevitable feature of an online industry
    and the last year again saw a small number of cases. In one case a
    configuration error in a new game was exploited by the customer who found
    it, who then told a friend, who told a friend, until a group of customers were
    knowingly and systematically exploiting the fault and distorting their winnings
    sufficiently to be investigated by the operator.
             Gibraltar Regulatory Authority Annual Report 2010 / 2011
        Regulating the Industry (Gambling)
70
     Complaints from Players cont (4)...

             The year saw a number of complaints about specific terms and conditions
             that certain customers claimed to be unaware of or were too restrictive.
             Unless a term and condition is being repeatedly misinterpreted by customers,
             then the operator is likely to be supported in these disputes.

             Syndicate betting was a feature of a number of complaints in 2010. These
             highlighted that not all bookmakers have rules against or limiting syndicate
             betting.

             A particular area of concern that emerged in 2010 was a short series of
             complaints by persons stating they were mentally ill or mentally impaired
             when gambling and generating substantial losses. Despite the material
             provided in support of their claims for reimbursement, these could not be
             supported by the Commissioner as investigations showed the gambling to
             be within the parameters experienced by operators, the source of funds to
             be secure and in some cases the player to be in communication with the
             operator. In all cases, there was no reason why the operator would have
             cause to believe the customer was mentally ill or impaired when providing
             the gambling facilities.

             A small number of complaints were received by players claiming that they
             were actually under age or that someone under age had used their accounts.
             When these accounts were investigated the pattern of play was invariably
             found to be consistent with that of an adult account holder and the complaints
             were eventually withdrawn.

             A small number of complaint cases were found to be substantiated, these
             included:

                    A properly self excluded player was able to register with an operator
                    using very similar identification details. The operator has since taken
                    steps to improve the way it cross-references new accounts against
                    self excludes.

                    An operator incorrectly identified a customer’s identification material
                    as forged or altered when this was not the case. The staff involved
                    were being unjustifiably suspicious of the player.


      Whilst the overwhelming majority of complaints involve gaming as opposed to betting
      the year again saw a small number of cases of ‘punters’ seeking to exploit remote
      betting facilities by various forms of deceit. These attempts are generally found to
      be based on a deliberate breach of the express, implied or associated terms and
      conditions of the bet, but can be of a highly sophisticated and dishonest nature.
      In contrast, the Commissioner notes that operators continue to be transparent and
      accessible in their management of complaints and generally demonstrate a willingness
      to resolve them speedily and fairly, and at times show considerable goodwill in favour
      of the complainant even though an objective examination of the facts indicates in
      favour of the operator.
                               Gibraltar Regulatory Authority Annual Report 2010 / 2011
                                                          Regulating the Industry (Gambling)
                                                                                               71
 Suspicious Activity Reports (SAR’s)

The prevailing anti money laundering regulations require operators to submit such
reports where there is reason to suspect money laundering or an attempt to launder
money by players. The level of reporting by operators continues to be low and all
cases are referred to and discussed with the Gibraltar Financial Intelligence Unit.
The low level of reporting is consistent with that of other jurisdictions with most cases
involving the fraudulent use of credit cards or pre-paid vouchers, and usually relatively
small sums. Whilst a small number of cases have involved substantial losses and
rest with the relevant authorities for investigation, it is reasonable to conclude that
serious and organised criminals are aware that remote gambling creates an immediate
and virtually indelible audit trail, something that a money launderer would seek to
avoid.

 Other ‘criminal’ activities

With millions of customers and global access, the remote gambling industry cannot
expect to be immune from the often overstated, but nevertheless very real, threat
of cyber crime. Indeed, the industry knows that there are parties of varying strength
and sophistication constantly testing their security, gaming and betting arrangements
to identify and exploit weaknesses or associated weaknesses.

The Commissioner has worked with various agencies in different states, and with
various operators, to ensure that all sides appreciate the perspective of the industry
and law enforcement agencies. The Commissioner continues to act as a conduit
or intermediary in certain complex cases.




                 Gibraltar Regulatory Authority Annual Report 2010 / 2011
       The Industry in Gibraltar (Gambling)
72
     Remote Gambling

      The gambling industry in Gibraltar continues to be dominated by the presence of
      online gambling operators.

      As at 31st March 2011 there were 20 operators holding 36 licences to conduct
      remote gambling under the Act, 21 for gaming, 13 for fixed odds betting, one for a
      betting exchange and one for spread betting in financial products.

      During the course of the year one operator left the jurisdiction and five were given
      detailed consideration and support in their licence applications. Only one of these
      ‘went live’ during the year, the remainder will begin operations during 2011.
      Additionally, two operators went through a merger process that culminated on 1st
      April 2011.

      The past year has seen the industry continuing to develop new and existing markets
      and move forward from the impact of the Unlawful Internet Gambling Enforcement
      Act which, in general terms, prohibits banks in the United States from processing
      transactions for remote gambling operations. This remains a delicate commercial
      and legal dilemma as other jurisdictions choose to disregard the US Government’s
      perspective and adopt a different position than Gibraltar.

      Considerable effort is being expended by a wide range of parties to encourage the
      US Government to adopt a less prohibitionist and more consistent ‘free trade’ position.
      This would better reflect the realities of remote gambling than an assumption that
      denying US players access to bona fide suppliers is the most appropriate method
      of remedying the fiscal and social policy issue underlying the legislation.

      2010 also saw the ‘opening up’ of the French market, with the Greek, Danish,
      German, Irish, Belgian and other EU governments taking steps in the same direction.
      The UK Government also concluded its consultation process on remote gambling
      but this has yet to lead to any policy proposals. Overall the trend is towards more
      jurisdictions adopting locally based licensing and regulatory requirements, a pattern
      likely to be reinforced by the EC Green Paper being under consideration.

      It remains the Commissioner’s view that unless properly balanced, the multiple
      licensing, taxation and structural demands placed on bona fide licensed operators
      will only strengthen the position of the increasing number of ‘grey’ unlicensed and
      unregulated service providers outside the EU, who will be in a position to afford
      better odds and bonuses to attract the experienced higher value remote customers
      governments are seeking to protect.

     Land Based Industry

      The new casino premises had a very successful first ‘full year’ in 2010/11. The
      configuration of the casino, with a bespoke sports betting facility and substantial
      bingo room incorporated into the building, provides a model for other jurisdictions
      to consider in terms of co-located and managed facilities.



                               Gibraltar Regulatory Authority Annual Report 2010 / 2011
                                                          The Industry in Gibraltar (Gambling)
                                                                                                 73
 Land Based Industry cont (2)...

The premises’ location and offering has proved to be immensely popular and the
entry and internal control measures applied by the management have meant there
have been no significant incidents involving attempted or actual inappropriate use
of the facilities.

Gibraltar continues to have 2 licensed betting shops offering traditional betting
facilities to residents and tourists alike, together with some 220 slot style gaming
machines in pubs, bars and other qualifying premises. The Commissioner maintains
an interest in the conduct of these premises and access to their facilities by young
or other vulnerable people.

 Problem Gambling in Gibraltar

The Gambling Division continues to maintain an open and supportive relationship
with Bruce’s Farm and Gambler’s Anonymous to discuss, in general terms, problem
gambling within Gibraltar and the scale and nature of cases emerging within the
local community. The number and scale of known cases remains remarkably small,
though each is likely to represent a significant difficulty for the individual and/or family
affected. The Commissioner has taken steps to encourage interested parties to
support the work of Bruce’s farm more tangibly than in the past, and continues to
do so. The Commissioner has also facilitated contact between the UK problem
gambling charity, GamCare, and Bruce’s Farm to allow wider sharing of information
and practices in their respective fields of expertise and knowledge.

The Gambling Division continues to take an interest in the management and
supervision of gaming machines in cafes, bars and pubs in Gibraltar, and will take
action where there is evidence of machines being used illegally by young persons.
It is recognised internationally that the abuse of gaming machines by children and
young persons can create problematic gambling habits later in life.




                 Gibraltar Regulatory Authority Annual Report 2010 / 2011
       Work Programme (Gambling)
74
     Work Programme

      The Commissioner is in ongoing consultation with the Minister and the Licensing
      Authority on a wide variety of licensing and regulatory matters. Whilst many of these
      issues are of a relatively routine nature, or similar to matters that have been dealt
      with previously, an increasing number are novel and potentially contentious and
      require research and consideration at a policy level, including consideration of the
      wider and long term ramifications of what may at first appear to be simple or isolated
      requests.

      The Commissioner continues to apply resources to ‘Policing the Perimeter’ in order
      to maintain the integrity of the gambling industry that is legitimately based in and
      operating from Gibraltar, as opposed to those who use various devices to purport
      to do so.

      The demands created by the continued media and political interest across Europe
      in alleged breaches of ‘Integrity in Sport’, and an assumed but unfound association
      with remote gambling, have not reduced. A number of cases have required
      investigation, and again the majority of allegations and suggestions have been found
      to be wildly exaggerated, groundless speculation or ‘media hype’, designed to
      promote special interests. The Commissioner is grateful for the work of ESSA, the
      European Sports Security Association, for its assistance in these matters. In the
      isolated cases with any substance the Commissioner has acted swiftly and directly
      and with the co-operation of operators to establish the relevant facts.

      Much of the next year’s work has already been mentioned and is likely to mirror the
      past year. In summary, the Commissioner and Gambling Division intend to continue
      to build their healthy relationship with and knowledge of operators, whilst introducing
      a series of codes and guidelines that will allow the Gibraltar industry to demonstrate
      that it continues to adopt and apply a strong and distinctive method of regulation.
      That regulation will be built on the unique nature and character of the Gibraltar
      industry – a small number of ‘blue chip’ companies, with key management, staff,
      equipment and operations in Gibraltar, open, and in practice, ‘immediately’ accessible
      by the regulator. Work will also be progressed in respect of the land based facilities
      of the new casino, the betting shop operator and the supervision of gambling
      machines in public places.

      The Gambling Division will continue to participate in appropriate international events,
      to ensure that the status and nature of the Gibraltar industry is properly understood,
      and where necessary, that the objectives of the industry in terms of providing fair,
      legal and transparent gaming to an adult population are accepted.




                               Gibraltar Regulatory Authority Annual Report 2010 / 2011
                                                            Operators & Licences (Gambling)
                                                                                              75
 Operators & Licences

As at 31st March 2011 there were 20 operators holding 34 licences to conduct
remote gambling under the Act, 20 for gaming, 12 for fixed odds betting, one for a
betting exchange and one for spread betting in financial products.


    Operator                                                           Licences

    Ladbrokes                                           Betting                   Casino

    Victor Chandler                                     Betting                   Casino

    Stan James                                          Betting                   Casino

    BWin / Ongame                                       Betting                   Casino x2

    Carmen Media                                                                  Casino

    32 Red                                              Betting                   Casino

    Digibet                                             Betting                   Casino

    888 (Dragonfish)                                    Betting                   Casino

    Bet 365                                                                       Casino

    Mansion                                                                       Casino

    Partygaming                                         Betting                   Casino

    Betfred                                             Betting                   Casino

    Partouche                                                                     Casino
                                                                                  -

    Eurobet / Gala Coral                                -                         Casino

    St. Minver                                          -                         Casino

    Digibet                                             Betting
                                                        -                         Casino

    William Hill                                        Betting x2
                                                        -                         Casino x2

    Gamesys                                             -                         Casino

    Betfair                                             Betting Exchange
                                                        -


    ProSpreads                                          Financial Products
                                                        -

                                                                                  -
               Fig 7.00 table listing Gambling Operators licensed in Gibraltar
    * for a list of licence holders by registered company name, see the GRA website
                   Gibraltar Regulatory Authority Annual Report 2010 / 2011
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Gibraltar Regulatory Authority Annual Report 2010 / 2011
                                                                     Annex
                                                                             77
Annex

GRA Organigram                                                      78




         Gibraltar Regulatory Authority Annual Report 2010 / 2011
                                                                                                                                                                                                              78


                                                                                                                                 Chief
                                                                                                                               Executive
                                                                                                                                                                                             GRA Organigram




                                                                                                      Head of                                Head of          Head of
                                                                                                                                                                                                               GRA Organigram (Annex)




                                                                                                     Regulation                              Satellite       Gambling
                                                                                                                                             Services        Regulation




                                                             Data       Radiocomms                       Office         Electronic          International     Gambling        Gambling
                                                                                        Accountant                                           Frequency
                                                           Protection      & I.T.                     Administrator   Communications        Co-ordinator      Regulator       Regulator
                                                           Manager       Manager                         / PA            Manager                (UK)        (Tech & Ops)    (Policy & Ops)




                                                             Data       Radiocomms                   Administration     Electronic         Co-ordination           Gambling
                                                           Protection      & I.T.                       Officer       Communications       Administrator          Administrator
                                                            Officer     Administrator                                   Officer x2                               & Web Monitor




Gibraltar Regulatory Authority Annual Report 2010 / 2011

								
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