Communications Act 2003

227 Reviews under ss. 225 and 226

(1) This section applies where an application is made under section 225 or 226 for a review of the financial terms on which a licence is held.

(2) As soon as reasonably practicable after receiving the application, OFCOM must—

(a) determine the amount to be paid to them under the conditions of the licence for the first calendar year falling wholly or partly within the period under review to begin after the application date; and

(b) determine the percentage to be used for computing the payments to be made to them under those conditions in respect of each accounting period falling within the period under review to begin after that date.

(3) The amount determined under subsection (2)(a) must be equal to the amount which, in OFCOM’s opinion, would have been the cash bid of the licence holder were the licence being granted afresh on an application made in accordance with—

(a) section 15 of the 1990 Act (licences for Channel 3 service or Channel 5); or

(b) paragraph 3 of Schedule 10 to this Act.

(4) The determination required by subsection (2)(b) is a determination of the percentage of qualifying revenue for each accounting period that is to be paid to OFCOM.

(5) For the purposes of subsection (2)(b)—

(a) different percentages may be determined for different accounting periods; and

(b) the percentages that may be determined for an accounting period include a nil percentage.

(6) In making their determinations on an application under section 226 OFCOM are to have regard, in particular, to any additional costs that are likely to be incurred by the licence holder in consequence of the commencement of so much of section 272, 273 or 274 (or any two or more of them) as is brought into force by the commencement order in question.

(7) References in this section to qualifying revenue for an accounting period are to be construed—

(a) in the case of the holder of a licence to provide a Channel 3 service or Channel 5, in accordance with section 19 of and Part 1 of Schedule 7 to the 1990 Act; and

(b) in the case of the holder of the licence to provide the public teletext service, in accordance with Part 3 of Schedule 10 to this Act.

(8) In this section—

• “the application date”, in relation to a review, means the date of the making under section 225 or 226 of the application for the review; and

• “the period under review”, in relation to a review of the financial terms of a licence, means so much of the period for which the licence will (if not renewed) continue in force after the application date.