Implementation of the Authorisation Directive in the UK and the draft Communications Bill Peter...
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![Page 1: Implementation of the Authorisation Directive in the UK and the draft Communications Bill Peter Davies. Licensing Adviser OFTEL.](https://reader030.fdocuments.in/reader030/viewer/2022032806/56649f055503460f94c1ae5d/html5/thumbnails/1.jpg)
Implementation of the Authorisation Directive in the UK
and the draft Communications Bill
Peter Davies.
Licensing Adviser
OFTEL
![Page 2: Implementation of the Authorisation Directive in the UK and the draft Communications Bill Peter Davies. Licensing Adviser OFTEL.](https://reader030.fdocuments.in/reader030/viewer/2022032806/56649f055503460f94c1ae5d/html5/thumbnails/2.jpg)
Introduction
• EU Authorisation Directive
• Draft Communications Bill
• Statutory Instruments under the European Communities Act
• Could be two periods
• Oftel in the first. OFCOM in the second
![Page 3: Implementation of the Authorisation Directive in the UK and the draft Communications Bill Peter Davies. Licensing Adviser OFTEL.](https://reader030.fdocuments.in/reader030/viewer/2022032806/56649f055503460f94c1ae5d/html5/thumbnails/3.jpg)
Ending of the Licensing Regime
• 25th July 2003
• Crossing the Rubicon
• All telecommunications licences revoked
• A new licenceless regime
• Licences still needed for numbers, spectrum and rights of way
![Page 4: Implementation of the Authorisation Directive in the UK and the draft Communications Bill Peter Davies. Licensing Adviser OFTEL.](https://reader030.fdocuments.in/reader030/viewer/2022032806/56649f055503460f94c1ae5d/html5/thumbnails/4.jpg)
Funding Oftel/OFCOM
• Regulator funded by industry
• Previously funded from licence fees
• No more individual licences
• Authorisation Directive provides for administrative charges
• Extends to all Communications
![Page 5: Implementation of the Authorisation Directive in the UK and the draft Communications Bill Peter Davies. Licensing Adviser OFTEL.](https://reader030.fdocuments.in/reader030/viewer/2022032806/56649f055503460f94c1ae5d/html5/thumbnails/5.jpg)
Consultation by Oftel
• Before and after 25th July
• Licence fees for the first period
• Administrative charges for the second
• OFCOM will probably replace Oftel during the second period
![Page 6: Implementation of the Authorisation Directive in the UK and the draft Communications Bill Peter Davies. Licensing Adviser OFTEL.](https://reader030.fdocuments.in/reader030/viewer/2022032806/56649f055503460f94c1ae5d/html5/thumbnails/6.jpg)
The first period
• Licence fees based on the existing system
• Only apply to individual licensees
• pro rata amount to reflect the part period
• Based on last year’s licensable turnover figures
![Page 7: Implementation of the Authorisation Directive in the UK and the draft Communications Bill Peter Davies. Licensing Adviser OFTEL.](https://reader030.fdocuments.in/reader030/viewer/2022032806/56649f055503460f94c1ae5d/html5/thumbnails/7.jpg)
The second period
• Administrative charges after 25th July 2003
• Will extend to all electronic communications
• Systems no longer a concept
• Networks, services and associated facilities
![Page 8: Implementation of the Authorisation Directive in the UK and the draft Communications Bill Peter Davies. Licensing Adviser OFTEL.](https://reader030.fdocuments.in/reader030/viewer/2022032806/56649f055503460f94c1ae5d/html5/thumbnails/8.jpg)
Who could be liable for these charges
• Those operating electronic communications networks (ECN)
• Those providing electronic communications services (ECS)
• Those providing associated facilities (AF)
• Content providers not included
![Page 9: Implementation of the Authorisation Directive in the UK and the draft Communications Bill Peter Davies. Licensing Adviser OFTEL.](https://reader030.fdocuments.in/reader030/viewer/2022032806/56649f055503460f94c1ae5d/html5/thumbnails/9.jpg)
What is an associated facility
• Associated facilities include:
• Co-location to facilitate LLU and similar services
• Conditional access
• Access control
![Page 10: Implementation of the Authorisation Directive in the UK and the draft Communications Bill Peter Davies. Licensing Adviser OFTEL.](https://reader030.fdocuments.in/reader030/viewer/2022032806/56649f055503460f94c1ae5d/html5/thumbnails/10.jpg)
Who will pay administrative charges
• Those operating ECNs and those providing ECS and AF whose
• relevant turnover is £5 million or more
• Minimum fee for those below 5 million threshold abolished
![Page 11: Implementation of the Authorisation Directive in the UK and the draft Communications Bill Peter Davies. Licensing Adviser OFTEL.](https://reader030.fdocuments.in/reader030/viewer/2022032806/56649f055503460f94c1ae5d/html5/thumbnails/11.jpg)
Notification to Oftel/OFCOM
• Notification is permitted
• Regulatory requirements imposed only when necessary
• UK has decided notification is not necessary at present
• Communications Bill will provide power to require notification
![Page 12: Implementation of the Authorisation Directive in the UK and the draft Communications Bill Peter Davies. Licensing Adviser OFTEL.](https://reader030.fdocuments.in/reader030/viewer/2022032806/56649f055503460f94c1ae5d/html5/thumbnails/12.jpg)
How administrative charges will be assessed
• Relevant turnover will replace licensable turnover
• In practice very little difference between the two
• Charges when relevant turnover is more than £5million
![Page 13: Implementation of the Authorisation Directive in the UK and the draft Communications Bill Peter Davies. Licensing Adviser OFTEL.](https://reader030.fdocuments.in/reader030/viewer/2022032806/56649f055503460f94c1ae5d/html5/thumbnails/13.jpg)
Relevant turnover will include
• call conveyance• Resale of calls • Line rental and
connection• Access provision • Provision of leased
lines• Value added
services
• Providing internet access to end-users
• LLU activities including co-location facilities
• Conditional access and access control
![Page 14: Implementation of the Authorisation Directive in the UK and the draft Communications Bill Peter Davies. Licensing Adviser OFTEL.](https://reader030.fdocuments.in/reader030/viewer/2022032806/56649f055503460f94c1ae5d/html5/thumbnails/14.jpg)
Gross or net turnover
• Net turnover was considered
• Regulator needs system which is straightforward and transparent
• Had to consider complexity
• Increased administrative burden
• most providers would pay about the same.
![Page 15: Implementation of the Authorisation Directive in the UK and the draft Communications Bill Peter Davies. Licensing Adviser OFTEL.](https://reader030.fdocuments.in/reader030/viewer/2022032806/56649f055503460f94c1ae5d/html5/thumbnails/15.jpg)
Arguments for net turnover
• Existing regime involves double counting
• Resellers say that margins are small
• Net turnover might favour service providers who have not paid charges hitherto
![Page 16: Implementation of the Authorisation Directive in the UK and the draft Communications Bill Peter Davies. Licensing Adviser OFTEL.](https://reader030.fdocuments.in/reader030/viewer/2022032806/56649f055503460f94c1ae5d/html5/thumbnails/16.jpg)
Why retain gross accounting
• Leave providers paying about the same amount
• In net accounting no profit operators would pay nothing
• Still need to be regulated• Much more difficult to police.• Annual audited accounts would not
provide simple check
![Page 17: Implementation of the Authorisation Directive in the UK and the draft Communications Bill Peter Davies. Licensing Adviser OFTEL.](https://reader030.fdocuments.in/reader030/viewer/2022032806/56649f055503460f94c1ae5d/html5/thumbnails/17.jpg)
Existing turnover bands retained
• £1 bn or more • £750m – below
£1bn • £600m – below
£750m • £500m – below
£600m • £400m – below
£500m • £300m – below
£400m • £200m below
£300m
• £150m – below £200m
• £100m – below £150m
• £75m – below £100m
• £50m – below £75m • £25m – below £50m • £10m – below £25m • £5m – below £10m
![Page 18: Implementation of the Authorisation Directive in the UK and the draft Communications Bill Peter Davies. Licensing Adviser OFTEL.](https://reader030.fdocuments.in/reader030/viewer/2022032806/56649f055503460f94c1ae5d/html5/thumbnails/18.jpg)
Communications Bill
• OFCOM has power to publish general demand
• Requirement to provide self-certificate of turnover
• Extract from audited accounts
![Page 19: Implementation of the Authorisation Directive in the UK and the draft Communications Bill Peter Davies. Licensing Adviser OFTEL.](https://reader030.fdocuments.in/reader030/viewer/2022032806/56649f055503460f94c1ae5d/html5/thumbnails/19.jpg)
Separate charges
• OFCOM can levy charges for:
• Radio spectrum (RA at present)
• Numbers (Currently no separate charge)
• Rights of way (No separate charge at present, but charge included in initial licence fee by DTI)
![Page 20: Implementation of the Authorisation Directive in the UK and the draft Communications Bill Peter Davies. Licensing Adviser OFTEL.](https://reader030.fdocuments.in/reader030/viewer/2022032806/56649f055503460f94c1ae5d/html5/thumbnails/20.jpg)
Other matters
• Costs of Competition Commission references may continue as now to be recovered from the industry
• No supplementary fee.
• Surpluses/deficits will be carried forward to following charging year
![Page 21: Implementation of the Authorisation Directive in the UK and the draft Communications Bill Peter Davies. Licensing Adviser OFTEL.](https://reader030.fdocuments.in/reader030/viewer/2022032806/56649f055503460f94c1ae5d/html5/thumbnails/21.jpg)
Percentage cap on recovered costs
• Existing cap will continue
• 0.08%
• =80p per £1,000 of relevant turnover
• Actual figure for 2001/2 Financial year was 56p per £1,000
![Page 22: Implementation of the Authorisation Directive in the UK and the draft Communications Bill Peter Davies. Licensing Adviser OFTEL.](https://reader030.fdocuments.in/reader030/viewer/2022032806/56649f055503460f94c1ae5d/html5/thumbnails/22.jpg)
Penalties
• Penalties for non-payment of administrative charges
• Equivalent to a maximum of twice the amount of the unpaid charge
• Right to operate could be suspended for non-payment of the charge
![Page 23: Implementation of the Authorisation Directive in the UK and the draft Communications Bill Peter Davies. Licensing Adviser OFTEL.](https://reader030.fdocuments.in/reader030/viewer/2022032806/56649f055503460f94c1ae5d/html5/thumbnails/23.jpg)
Proposed procedure
• General demand published in April 2003 to cover second period
• Oftel website. Also in the London, Belfast and Edinburgh Gazettes
• Operators service providers assess turnover advise Oftel/OFCOM