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Communications Bill


Communications Bill
Part 3 — Television and Radio Services
Chapter 2 — Regulatory Structure for Independent Television Services

    196

 

 220   Financial terms of licence renewed under s. 219

     (1)    The determination under section 219(4)(b) must comprise—

           (a)           a determination of the amount which the holder of the renewed licence

will be required by the conditions of that licence to pay to OFCOM in

respect of the first complete calendar year falling within the renewal

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period;

           (b)           a determination of the percentage of qualifying revenue for each

accounting period of the licence holder falling within the renewal

period which he will be required by those conditions to pay to OFCOM.

     (2)    The amount determined under subsection (1)(a) must be equal to the amount

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which, in OFCOM’s opinion, would have been the cash bid of the licence

holder were the licence (instead of being renewed) to be granted for the period

of the renewal on an application made in accordance with Part 1 of Schedule

10.

     (3)    For the purposes of subsection (1)(b)—

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           (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.

     (4)    In this section “renewal period”, in relation to a licence, means the period for

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which the licence is in force by reason of its renewal.

     (5)    Part 3 of Schedule 10 applies for construing this section as it applies for

construing that Schedule.

Meaning of initial expiry date

 221   Meaning of “initial expiry date”

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     (1)    Subject to any postponement under this section, the date which is the initial

expiry date for the purposes of this Part is 31st December 2014.

     (2)    The Secretary of State may (on one or more occasions) by order postpone the

initial expiry date.

     (3)    The Secretary of State’s power to postpone the initial expiry date—

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           (a)           is to be exercisable before 30th June 2013 only if he has fixed a date after

30th June 2013 as the date for digital switchover; and

           (b)           is not to be exercisable on or after 30th June 2013 if he has fixed 30th

June 2013 or an earlier date as the date for digital switchover.

     (4)    Where the Secretary of State makes an order under this section at a time after

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he has fixed a date for digital switchover, the date to which the initial expiry

date is postponed must be a date not less than eighteen months after the date

for digital switchover.

     (5)    The Secretary of State must exercise his power to postpone the initial expiry

date if it at any time appears to him that that date would otherwise fall within

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the period of eighteen months immediately following the date fixed for digital

switchover.

     (6)    Where an order under this section extends a licensing period for which a

licence has been granted in accordance with section 211 or 216, the 1990 Act

 

 

Communications Bill
Part 3 — Television and Radio Services
Chapter 2 — Regulatory Structure for Independent Television Services

    197

 

     (6)    and this Part shall have effect (subject to subsection (7)) as if the licence had

originally been granted for the extended period.

     (7)    Where an order under this section extends the period for which a licence is to

continue in force—

           (a)           that order shall not affect the earliest time at which an application for

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the renewal of that licence may be made in accordance with section

213(2)(a) or 219(2)(a);

           (b)           as soon as reasonably practicable after making the order, OFCOM must

make such modification of any determination made by them in the case

of that licence for the purposes of section 213(2)(b) or 219(2)(b) as they

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consider appropriate in consequence of the extension; and

           (c)           neither section 213(3)(a) nor section 219(3)(a) applies to the making of

that modification.

     (8)    In this section a reference to the date for digital switchover is a reference to the

date fixed by the Secretary of State for the purposes of this section as the date

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which appears to him, in consequence of directions given by him for the

purposes of the conditions of the licences for the relevant public broadcasting

services, to be the date after which none of those services will be broadcast to

any significant extent in analogue form.

     (9)    In this section “the relevant public broadcasting service” means any of the

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following—

           (a)           the services comprised in Channel 3; and

           (b)           Channel 5.

Reviews relating to licensing of Channels 3 & 5 and teletext

 222   Application for review of financial terms of replacement licences

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     (1)    The holder of a replacement licence granted under section 212 or 218 may

apply to OFCOM, at any time in the first or any subsequent review period, for

a review of the financial terms on which that licence is held.

     (2)    For the purposes of this section the first review period is the period which—

           (a)           begins four years before the first notional expiry date; and

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           (b)           ends with the day before the day that OFCOM have determined to be

the one by which they would need to publish a tender notice if they

were proposing to grant a fresh licence to take effect from the first

notional expiry date.

     (3)           For the purposes of this section a subsequent review period in the case of a

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replacement licence is so much (if any) of the following period as falls before

the end of the initial expiry date, namely, the period which—

           (a)           begins four years before a subsequent notional expiry date; and

           (b)           ends with the day before the day that OFCOM have determined to be

the one by which they would need to publish a tender notice if they

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were proposing to grant a fresh licence to take effect from that notional

expiry date.

     (4)    A determination for the purposes of subsection (2)(b) or (3)(b) in respect of a

replacement licence—

           (a)           must be made at least one year before the day determined; and

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Communications Bill
Part 3 — Television and Radio Services
Chapter 2 — Regulatory Structure for Independent Television Services

    198

 

           (b)           must be notified by OFCOM to the person who, at the time of the

determination, holds the licence in question.

     (5)    No application under this section for a review of the financial terms on which

a replacement licence is held is to be made—

           (a)           at any time when an application under section 223 for a review of those

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terms is pending; or

           (b)           at any time in the period of twelve months following the day on which

a determination by OFCOM on such an application is notified to the

licence holder.

     (6)    For the purposes of this section an application for a review under section 223

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is pending from the time when the application is made until the end of the day

on which OFCOM’s determination on the review is notified to the licence

holder.

     (7)    In this section—

                    “the first notional expiry date”, in relation to a replacement licence, means

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the date with which (apart from this Act) the existing licence would

have expired if not renewed;

                    “subsequent notional expiry date”, in relation to a replacement licence,

means—

                  (a)                 in a case in which an application by the licence holder for a

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review under this section was made during the review period

beginning four years before the last notional expiry date, the

tenth anniversary of the date on which OFCOM’s

determination on that review was notified to the licence holder;

and

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                  (b)                 in any other case, the tenth anniversary of the last notional

expiry date;

                    “tender notice” means a notice under section 15(1) of the 1990 Act or (as

the case may be) paragraph 1 of Schedule 10.

     (8)    In subsection (7) “existing licence” has the same meaning as in section 212 or

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(as the case may be) 218.

 223   Application for review of financial terms in consequence of new obligations

     (1)    This section applies where an order is made under section 403 that brings

section 268, 269 or 270 (or any two or more of them) into force for the purpose

of including conditions in the regulatory regime for—

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           (a)           a Channel 3 service;

           (b)           Channel 5; or

           (c)           the public teletext service.

     (2)    The holder of a licence in which conditions mentioned in section 268, 269 or 270

will fall to be included when the order comes into force may apply to OFCOM,

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at any time in the review period, for a review of the financial terms on which

the licence is held.

     (3)    For the purposes of this section the review period in the case of an order under

section 403 is the period which—

           (a)           begins with the day on which the order is made; and

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Communications Bill
Part 3 — Television and Radio Services
Chapter 2 — Regulatory Structure for Independent Television Services

    199

 

           (b)           ends with the time at which, by virtue of the order, one or more of

sections 268, 269 and 270 come into force in the case of the licence in

question.

     (4)    If in the case of the same order there is more than one time falling within

subsection (3)(b), the review period ends with the later or latest of them.

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 224   Reviews under ss. 222 and 223

     (1)    This section applies where an application is made under section 222 or 223 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—

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           (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

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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—

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           (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

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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

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include a nil percentage.

     (6)    In making their determinations on an application under section 223 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 268, 269 or 270 (or any two or more of them) as is brought into

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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

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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

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making under section 222 or 223 of the application for the review; and

 

 

Communications Bill
Part 3 — Television and Radio Services
Chapter 2 — Regulatory Structure for Independent Television Services

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                    “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.

 225   Giving effect to reviews under ss. 222 and 223

     (1)    As soon as reasonably practicable after making a determination under section

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224 on an application under section 222 or 223, OFCOM must give a

notification of their determination to the applicant.

     (2)    The notification must set out—

           (a)           the determination made by OFCOM;

           (b)           the modifications of the applicant’s licence that are required to give

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effect to the determination;

           (c)           a date by which the applicant must notify OFCOM whether or not he

accepts the determination and modifications; and

           (d)           a subsequent date by which the applicant’s licence will cease to have

effect if he does not.

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     (3)    The modifications set out in accordance with subsection (2)(b) must secure that

the amount falling to be paid under the conditions of the applicant’s licence for

each calendar year subsequent to that for which an amount has been

determined in accordance with section 224(2)(a) is the amount so determined

as increased by the appropriate percentage.

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     (4)    In the case of a determination on an application under section 222, the date

specified in accordance with subsection (2)(d) must not fall before whichever

is the earlier of —

           (a)                         the next notional expiry date after the application for the review; and

           (b)                         the end of the licensing period in which that application was made.

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     (5)    Where the applicant notifies OFCOM that he accepts the determination—

           (a)           his licence is to have effect with the modifications set out in OFCOM’s

notification; and

           (b)           all such adjustments by way of payment or repayment as may be

necessary for giving effect to the modifications are to be made in

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respect of any payments already made for years or periods affected by

the modifications.

     (6)    Where the applicant does not, before the date specified in accordance with

paragraph (c) of subsection (2), notify OFCOM that he accepts the

determination, his licence shall have effect as if the period for which it is to

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continue in force ended with the time specified in accordance with paragraph

(d) of that subsection.

     (7)    Where the time at which a licence would cease to have effect in accordance

with subsection (6) is the end of a licensing period, that subsection does not

affect any rights of the licence holder with respect to the renewal of his licence

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from the end of that period.

     (8)    In this section—

                    “the appropriate percentage” has the same meaning as in section 19 of the

1990 Act;

                     “licensing period” means—

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Communications Bill
Part 3 — Television and Radio Services
Chapter 2 — Regulatory Structure for Independent Television Services

    201

 

                  (a)                 the period beginning with the commencement of this section

and ending with the initial expiry date; or

                  (b)                 any subsequent period of ten years beginning with the end of

the previous licensing period;

                    “notional expiry date” means a first or subsequent notional expiry date

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within the meaning of section 222.

 226   Report in anticipation of new licensing round

     (1)    OFCOM must, in anticipation of the end of each licensing period—

           (a)           prepare a report under this section; and

           (b)           submit it to the Secretary of State no later than thirty months before the

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end of that period.

     (2)    A report under this section must set out OFCOM’s opinion on the effect of each

of the matters mentioned in subsection (3) on the capacity of the holders of

relevant licences to contribute, in the next licensing period, to the fulfilment of

the purposes of public service television broadcasting in the United Kingdom

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at a cost to the licence holders that is commercially sustainable.

     (3)    Those matters are—

           (a)           the arrangements that (but for an order under section 227) would allow

for the renewal of relevant licences from the end of the current licensing

period; and

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           (b)           the conditions included in the regulatory regimes for the services

provided under relevant licences.

     (4)    A report under this section must also include the recommendations (if any)

which OFCOM consider, in the light of the opinion set out in the report, should

be made to the Secretary of State for the exercise by him of—

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           (a)           his power under section 227; or

           (b)           any of the powers to make statutory instruments that are conferred on

him by Chapter 4 of this Part.

     (5)    Where the Secretary of State makes an order under section 221 after receiving

a report under this section in anticipation of the end of the licensing period that

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is extended by the order—

           (a)           he may require OFCOM to prepare a supplementary report in the light

of the postponement of the beginning of the next licensing period; and

           (b)           it shall be the duty of OFCOM, within such period as may be specified

by the Secretary of State, to prepare the required supplementary report

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and to submit it to him.

     (6)    References in this section to the purposes of public service television

broadcasting in the United Kingdom are to be construed in accordance with

subsection (4) of section 260; and subsection (5) of that section shall have effect

for the purposes of a report under this section as it applies for the purposes of

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a report under that section.

     (7)    In this section—

                    “licensing period” means—

                  (a)                 the period beginning with the commencement of this section

and ending with the initial expiry date; or

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                  (b)                 any subsequent period of ten years beginning with the end of

the previous licensing period;

 

 

Communications Bill
Part 3 — Television and Radio Services
Chapter 2 — Regulatory Structure for Independent Television Services

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                    “relevant licence” means—

                  (a)                 a licence to provide a Channel 3 service;

                  (b)                 a licence to provide Channel 5; or

                  (c)                 the licence to provide the public teletext service.

 227   Orders suspending rights of renewal

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     (1)    This section applies where the Secretary of State has received and considered

a report submitted to him by OFCOM under section 226.

     (2)    If—

           (a)           the report contains a recommendation by OFCOM for the making of an

order under this section, or

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           (b)           the Secretary of State considers, notwithstanding the absence of such a

recommendation, that it would be appropriate to do so,

            he may by order provide that licences for the time being in force that are of the

description specified in the order are not to be renewable under section 213 or

219 from the end of the licensing period in which he received the report.

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     (3)    An order under this section preventing the renewal of licences from the end of

a licensing period must be made at least eighteen months before the end of that

period.

     (4)           The Secretary of State is not to make an order under this section preventing the

renewal of licences from the end of the initial licensing period unless he has

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fixed a date before the end of that period as the date for digital switchover.

     (5)    Where the Secretary of State postpones the date for digital switchover after

making an order under this section preventing the renewal of licences from the

end of the initial licensing period, the order shall have effect only if the date to

which digital switchover is postponed falls before the end of that period.

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     (6)           Subsection (5) does not affect the power of the Secretary of State to make

another order under this section after postponing the date for digital

switchover.

     (7)    An order under this section with respect to Channel 3 licences must be an order

of one of the following descriptions—

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           (a)           an order applying to every licence to provide a Channel 3 service;

           (b)           an order applying to every licence to provide a national Channel 3

service; or

           (c)           an order applying to every licence to provide a regional Channel 3

service.

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     (8)    An order under this section does not affect—

           (a)           the person to whom a licence may be granted on an application made

under section 15 of the 1990 Act or under paragraph 3 of Schedule 10 to

this Act; or

           (b)           rights of renewal in respect of licences first granted so as to take effect

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from the beginning of a licensing period beginning after the making of

the order, or from a subsequent time.

     (9)    No order is to be made containing provision authorised by this section unless

a draft of the order has been laid before Parliament and approved by a

resolution of each House.

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