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Communications Act 2003

Section 401: Power of OFCOM to retain costs of carrying out spectrum functions

869.This section allows OFCOM, subject to the approval of the Treasury, to introduce a new system for meeting the cost carrying out their spectrum functions. Section 400(1)(c) provides for sums received by OFCOM under the Wireless Telegraphy Act 1998 to be paid to the Consolidated Fund. Under this section, OFCOM would be able to retain out of those sums sufficient amounts to cover the cost of carrying out most of their spectrum functions.

870.Subsections (1) and (2) would enable OFCOM to make a statement of principles under which they could retain amounts received by them under the Wireless Telegraphy Act 1998. Under subsections (3) and (4), the principles contained in any statement must secure, on the basis of such estimates of the likely costs as it is practicable to make, that on a year by year basis, the aggregate amount retained by OFCOM does not exceed the amount required to meet the annual cost to OFCOM of carrying out their functions in relation to the management of the radio spectrum. The amounts retained by OFCOM must be objectively justifiable and proportionate to the costs and the relationship between the costs and the amounts retained must be transparent. Subsection (5) excludes functions under sections 22(2), 28, 152(1), (2), (5) and (8), 155, 158, 168 and 175 to 177 of this Act and section 5 of the Wireless Telegraphy Act 1949 (since inclusion of those functions would be contrary to the EC Electronic Communications Authorisation Directive).

871.As charges for licences covering several years are sometimes paid as a lump sum in one year, subsection (6) allows for amounts received in one year to be treated as referable to costs incurred in that year and in one or more subsequent years and to be brought into account in each of those years in accordance with an apportionment made in the statement of principles. Subsection (7) allows any deficit or surplus to be carried forward and taken into account in determining what is required by OFCOM in the following year to meet the costs of carrying out their spectrum functions.

872.Where a statement of principles has effect for a limited period or is withdrawn, subsection (8) provides that it does not apply to any amounts paid to OFCOM after the end of the period or after the withdrawal takes effect. Subsection (9) enables OFCOM to revise a statement of principles. Subsection (10) requires the consent of HM Treasury to be given for the making, revision or withdrawal of any statement of principles. Subsection (11) requires publication of so much of a statement of principles as demonstrates compliance with the requirements of subsection (3).

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