Schedule 13: Financial penalties under the Broadcasting Acts
910.Part 1 of this Schedule amends the provisions in the Broadcasting Act 1990 as regards financial penalties.
911.Penalties may be imposed on the revocation of a Channel 3 or the Channel 5 licence, or a licence to provide the public teletext service. At the moment, under section 18 of the Broadcasting Act 1990, the maximum penalty which can be imposed on a Channel 3 licensee is 7 per cent of the qualifying revenue for the licensee’s last complete accounting period falling within the licence period, or where the licence is revoked before the licensee has begun to provide the relevant service or before the end of the licensee’s first complete accounting period falling within the licence period, 7 per cent of what the Independent Television Commission estimate would have been the qualifying revenue of the licensee for his first complete accounting period falling within the period for which the licence would have been in force. Paragraph 2 amends section 18 of the 1990 Act by keeping in place the arrangements for calculating penalties on the basis of qualifying revenue (by OFCOM) but providing that the maximum penalty will now be whichever is the greater of £500,000 or the amount calculated by reference to qualifying revenue.
912.Under section 41 of the Broadcasting Act 1990, penalties may be imposed on the holder of a Channel 3 licence or the Channel 4 or Channel 5 licences, if he fails to comply with licence conditions or the regulator’s directions. Paragraph 3 amends section 41 so that the distinction between a first and a subsequent offence is removed and the maximum penalty is now fixed at 5 per cent of the licensee’s qualifying revenue for his last complete accounting period falling within the licence period (instead of 3 per cent for a first offence and 5 per cent for any subsequent breaches). In cases where a penalty is imposed before the first such accounting period has ended, the penalty is to be 5 per cent of what OFCOM estimate would have been the licensee’s qualifying revenue for that period.
913.Paragraph 5 makes similar amendments to section 55 of the Broadcasting Act 1990, which deals with penalties which may be imposed on the holder of an additional services licence if he fails to comply with licence conditions or the regulator’s directions.
914.Under section 42B (for restricted services) of the Broadcasting Act 1990, penalties may be imposed on a restricted services licensee if he fails to comply with licence conditions or the regulator’s directions. Paragraph 4 amends this section. The new penalties are whichever is the greater of £250,000 (instead of £50,000) or 5 per cent of the licensee’s qualifying revenue for his last complete accounting period falling within the licence period or, where a penalty is imposed before the end of the first such accounting period, 5 per cent of what OFCOM estimate would have been the licensee’s qualifying revenue for that period. Also, the distinction between a first and a subsequent offence is removed for both restricted and additional service.
915.Under section 101 of the Broadcasting Act 1990, penalties may be imposed on the revocation of a national sound broadcasting licence. These provisions are amended by paragraph 6 to provide that the maximum penalty is whichever is the greater of £250,000 or 7 per cent of the qualifying revenue for the licensee’s last complete accounting period falling within the licence period, or of what OFCOM estimate would have been the qualifying revenue of the licensee for his first complete accounting period falling within the period for which the licence would have been in force, where the penalty is imposed before the first such accounting period has ended. The basis for calculating qualifying revenue substantively duplicates the existing provision in section 101.
916.Under section 110 of the Broadcasting Act 1990, penalties may be imposed on analogue sound broadcasting licensees, and under section 120, on additional service licensees, if they fail to comply with licence conditions or directions given under Part 3 of that Act. The existing provisions are amended, in the case of a national sound broadcasting licensee, to provide that the maximum penalty is whichever is the greater of £250,000 or 5 per cent of the qualifying revenue for the licensee’s last complete accounting period falling within the licence period, or of what OFCOM estimates would have been the qualifying revenue of the licensee for his first complete accounting period falling within the period for which the licence would have been in force, where the penalty is imposed before the first such accounting period has ended. In other cases (e.g. local licences or radio licensable content service licences, by virtue of section 250(3) of this Act) the maximum penalty is increased from £50,000 to £250,000. In the case of an additional services licensee, the maximum penalty is 5 per cent of qualifying revenue, calculated on the same basis as for a national sound broadcasting licensee. There is no distinction between a first and a subsequent offence for penalties under either section 110 or120.
917.Part 2 of this Schedule amends the provisions of the Broadcasting Act 1996 as regards financial penalties.
918.Under section 11 of the Broadcasting Act 1996, penalties may be imposed on the revocation of a television multiplex licence and, under section 53(5) penalties may be imposed on the revocation of a radio multiplex licence. In the case of a television multiplex licence, the existing provisions are amended to provide that, where the licence is revoked before the licensee has begun to provide the service or before the end of the first accounting period, the maximum penalty payable is whichever is the greater of £500,000 (instead of £50,000) and 7 per cent of what OFCOM estimates would have been the multiplex revenue of the licensee falling within his first accounting period for which the licence would have been in force. In any other case, the maximum penalty is £500,000 or 7 per cent of the multiplex revenue for his last complete accounting period falling within the licence period. For a radio multiplex licence, the maximum penalty is £250,000 in the case of a local multiplex licence (increased from £50,000); and in the case of a national multiplex licence it is whichever is the greater of £250,000 (also increased from £50,000) or a prescribed amount. The prescribed amount is 7 per cent of multiplex revenue, calculated on the same basis as for a television multiplex service (see section 53(6) of the 1996 Act).
919.Penalties may be imposed under section 17, on a television multiplex licensee; under section 23, on a digital television programme licensee; under section 27, on a digital additional services licensee; under section 59, on a radio multiplex licensee; under section 62, on a digital sound programme licensee and, under section 66, on a digital additional sound services licensee, if he fails to comply with licence conditions or OFCOM’s directions. In the case of sections 17, 23 and 27, the maximum penalties are raised to the greater of £250,000 (from £50,000) or 5 per cent of the licensee’s multiplex revenue for his last complete accounting period falling within the licence period. In cases where a penalty is imposed before the end of the first such accounting period, the second figure is to be 5 per cent of what OFCOM estimate would have been the licensee’s multiplex revenue for that period. For sections 59, 62 and 66, where the licensee holds a local licence the maximum penalty payable is £250,000. In the case of national licences the maximum penalty payable is whichever is the greater of £250,000 and 5 per cent of the licensee’s multiplex revenue for his last complete accounting period falling within the licence period. In cases where a penalty is imposed on a national licensee before the end of the first such accounting period, the second figure is to be 5 per cent of what OFCOM estimate would have been the licensee’s multiplex revenue for that period. Again, the distinction between a first offence (where a figure of 3 per cent of revenue had effect, instead of 5 per cent) and subsequent offences has been eliminated.
920.Paragraph 9 gives the Secretary of State the power to amend, by order, the size of any of the penalties that may be imposed under the provisions of the Broadcasting Act 1990 that are set out in sub-paragraph (2). Paragraphs 16 and 22 amend existing powers to alter penalties in the 1996 Act. In particular, orders made under those powers will in future be subject to approval by resolution of each House of Parliament (as is the power in paragraph 9).
921.These new provisions will only apply in relation to failures taking place after the commencement of this paragraph.