House of Lords - Explanatory Note
Communications Bill - continued          House of Lords

back to previous text

Clause 389: Timing and location of things done electronically

828.     The Secretary of State may by order make provision for determining the times and places at which things are done electronically under this Bill, the Office of the Communications Act 2002, the enactments relating to radio spectrum management not contained in this Bill, Schedule 2 to the Telecommunications Act 1984 and the Broadcasting Acts 1990 and 1996. The Secretary of State may also specify how anything carried out electronically for the purposes of those Acts, including any requirements relating to time and place, may be proved in legal proceedings.

Clause 390: Purchase of Duchy of Lancaster land

829.     This clause gives the Duchy of Lancaster a general power to sell land to persons who provide public electronic communications networks.

Clause 391: Repeal of certain provisions of the Telecommunications Act 1984

830.     This clause will repeal the spent provisions dealing with the privatisation of BT set out in sections 60, 61(1) to (6), 62, 63(1) to (4), 64 to 67, 69 to 71, 72(2), (4) and (5) and 73 of the Telecommunications Act 1984. This clause also amends section 68(2) of the 1984 Act to reflect the fact that the only outstanding liability of British Telecommunications plc for which the Secretary of State might be responsible is the payment of pensions, and repeals sections 93 and 97 of the Telecommunications Act 1984.

*Section 93 of the 1984 Act allows the Secretary of State (with the consent of the Treasury) to make grants towards fees or expenses incurred in the development or use of apparatus that is designed or adapted for disabled persons. Section 97 allows local authorities to contribute towards the cost of the provision by public telecommunications operators of telecommunications facilities that they consider to be of benefit to their area.

Clause 392: Expenses

831.     Any expenditure by the Secretary of State in carrying out her functions under the Bill, and any increase caused by this Bill in sums payable under other Acts, shall be met from money provided by Parliament.

Clause 393: Destination of licence fees and penalties

832.     Where OFCOM receive money in any of the circumstances listed in subsection (1), they must pay it into the Consolidated Fund of the United Kingdom or Northern Ireland in accordance with subsection (2). The circumstances in subsection (1) include the imposition by OFCOM of a fine under Chapter 1 of Part 2, clause 172 or Part 3 of this Bill, Part 1 or 3 of the 1990 Act or Part 1 or 2 of the 1996 Act and the receipt of fees for auctioned telephone numbers, of spectrum fees under the Wireless Telegraphy Act 1998 (c. 6) and of fees paid to OFCOM under a Broadcasting Act licence for the first year falling within the period for which the licence is in force.

833.     OFCOM must prepare an annual account that shows the amounts received by them, the sums paid into the Consolidated Funds of the United Kingdom and Northern Ireland, the amount retained by them in accordance with any statement of principles they may make under clause 394 and the cost to OFCOM of carrying out the functions to be covered by that retained amount. The report must be sent to the Comptroller and Auditor General, who must certify and report on the account. He must also lay a copy of OFCOM's annual account and his report before each House of Parliament.

Clause 394: Power of OFCOM to retain costs of carrying out spectrum functions

834.     This clause would allow OFCOM, subject to the approval of the Tresury, to introduce a new system for meeting the cost carrying out their spectrum functions. Clause 393 provides for sums received by OFCOM under the Wireless Telegraphy Act 1998 to be paid to the Consolidated Fund. Under this clause, OFCOM would be able to retain out of the sums otherwise payable into the Consolidated Fund under clause 393(1)(c) sufficient amounts to cover the cost of carrying out most of their spectrum functions.

835.     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 clauses 19(2), 25, 149(1), (2), (5) and (8), 152, 155, 165 and 172 to 174 and section 5 of the Wireless Telegraphy Act 1949, (since inclusion of those functions would be contrary to the EC Electronic Communications Authorisation Directive).

836.     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 one year or 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.

837.     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).

Clause 395: Power of Secretary of State to make orders and regulations

838.     This clause sets out how the Secretary of State is to exercise her powers to make orders or regulations under the Bill (other than those conferred by Schedule 4), and makes additional provisions in respect of these powers.

Clause 396: Regulations and orders made by OFCOM

839.     This clause sets out how OFCOM are to exercise their powers to make orders or regulations under the provisions in the Bill and provisions inserted in other Acts which apply this clause, and makes additional provision in respect of these powers. The orders and regulations concerned must be made by statutory instrument; and where the provision in the Bill and provisions inserted in other Acts under which the instrument is made provides for it to be laid before Parliament, OFCOM must send it to the Secretary of State for that to be done. Subsection (6) provides that OFCOM must allow a period of at least one month for representations to be made on any proposal by them to make an order or regulations under a provision in the Bill and provisions inserted in other Acts which applies this clause.

Clause 397: Criminal liability of company directors etc.

840.     This clause provides that where an offence under this Bill, the Wireless Telegraphy Act 1949, the Marine, &c., Broadcasting (Offences) Act 1967, or the Telecommunications Act 1984 is committed by a body corporate, the directors, managers, secretary or other officers of that body corporate (including, in certain cases, its members) will also be liable for prosecution if it is proved that they had given their consent to the offence, had connived in its commission or if the commission is attributable to neglect on the part of the director.

Clause 398: General interpretation

841.     This clause provides for interpretation of defined terms in the Bill.

Clause 399: Minor and consequential amendments, transitionals and repeals

842.     Schedule 17, which provides for minor and consequential amendments to other legislation, and Schedule 18, which contains transitional provisions in connection with other legislation, shall have effect. Furthermore, the provisions set out in Schedule 19 are repealed or revoked as specified in that Schedule. These schedules are described in more detail below. Subsections (2), (3) and (5) also give the Secretary of State a limited power and in the case of some local legislation a duty to make consequential amendments of other legislation. Subsection (4) confers a further power to make consequential modifications to enactments extending only to Scotland, enactments extending only to Northern Ireland, local enactments and subordinate legislation.

Clause 400: Pre-consolidation amendments

843.     The Secretary of State may by order modify enactments relating to the management of the radio spectrum (as defined in clause 398), the enactments relating to broadcasting (the Broadcasting Acts 1990 and 1996, Part 3 of the Bill and other provisions of the Bill dealing with them) and other enactments referring to these enactments in order to facilitate consolidation. An order may not be made unless a Bill for repealing and re-enacting the enactments has been presented to Parliament.

Clause 401: Transitional provision for anticipatory carrying out of functions

844.     This clause applies where an order made under clause 403 bringing into force any of the following provisions of the Bill: (i) a provision of Part 2 of the Bill, (ii) a provision of Chapter 1 of Part 5; or (iii) a provision of Part 1 or 6 relating to a provision of Part 2 or of Chapter 1 of Part 5 or any enactment relating to the management of the radio spectrum, states that such a provision is brought into force for the purposes of enabling specified networks and services functions, or specified spectrum functions, to be carried out during the transitional period by the Director General of Telecommunications or the Secretary of State.

845.     Any provision brought into force during the transitional period has effect as if references in that provision to OFCOM and references to OFCOM inserted by that provision in any other enactment were references to either the Director General of Telecommunications or the Secretary of State, as the case may be.

    *Subsection (6) defines the transitional period. Subsections (7) and (8), respectively, define networks and services functions and spectrum functions.

846.     This clause should be read with paragraph 2 of Schedule 18, which provides that steps taken by the Secretary of State or OFCOM before a power or duty is conferred or imposed on either of them or transferred to OFCOM are to be treated as satisfying any requirement of that power or duty for those steps to be taken, and also provides for steps taken by the Director General of Telecommunications or the Secretary of State when clause 401 applies.

847.     The expectation is that the provisions of the Bill which implement the four EC Communications Directives will need to be brought into force very quickly between Royal assent and the date on which those Directives must be implemented, 25th July 2003. It is unlikely that the necessary steps under the Bill for OFCOM to be able to exercise its functions under those provisions will have been completed by that date. As a result, those functions are likely initially to be exercised by the Director General of Telecommunications and the Secretary of State under clause 401; and they will have had to have taken preparatory steps in advance under paragraph 2 of Schedule 18.

Clause 402: Application of enactments to territorial sea and other waters

848.     This clause permits Her Majesty by an Order in Council to apply the provisions of Part 2 of the Bill, the enactments relating to the management of the radio spectrum not contained in Part 2 of the Bill and any related provision in Chapter 1 of Part 5 of the Bill to the territorial sea and other waters of the United Kingdom. The elaboration of the power set out in clause 395(3) applies.

Clause 403: Short title, commencement and extent

849.     This clause gives the Secretary of State an order-making power to bring the provisions of this Bill and the Schedules into force on different days for different purposes, save for this clause, and clauses 281) to (4) and (6) and 398, which will come into force upon Royal Assent. It also provides that the Bill will extend to Northern Ireland and that it may, by Order in Council, be extended to the Channel Islands and the Isle of Man.

SCHEDULES

Schedule 1: Functions transferred to OFCOM

850.     This is described in more detail in the notes to clause 2.

Schedule 2: Transfer schemes

851.     This is described in more detail in the notes to clause 27. The property, rights and liabilities capable of being transferred under Paragraph 1 of the Schedule is intended to include the rights and liabilities of the ITC as the Principal Employer of ITC Pension Plan.

Schedule 3: Amendments of Schedule 2 to the Telecommunications Act 1984

852.     This Schedule (together with clauses 103 to 116) amends the telecommunications code (set out in Schedule 2 to the Telecommunications Act 1984) in order to translate it into a code applicable to apparatus used in electronic communications networks and services. - It will become known as the 'electronic communications code'. The electronic communications code is designed to facilitate the installation and maintenance of electronic communications networks. It confers rights on operators to install and maintain apparatus in, over or under land and results in considerably simplified planning procedures, similar to those given to other utilities. The only substantive changes are to enable the application of the electronic communications code to persons who provide systems of conduits that are to be used for the provision of an electronic communications network, but who do not actually provide an electronic communications network themselves; and to allow apparatus to be shared without either of the sharers being in breach of their obligations under the code because of what the other is allowed to do. The other change is the addition of a paragraph 29 which encourages the sharing of apparatus, this new provision described in more detail in the notes on Clause 103.

Schedule 4: Compulsory purchase and entry for exploratory purposes

853.     This is described in more detail in the notes to clause 115.

Schedule 5: Procedure for grants of recognised spectrum access

854.     This is described in more detail in the notes to clause 156.

Schedule 6: Fixed penalties for wireless telegraphy offences

855.     This is described in more detail in the notes to clause 177.

Schedule 7: Seizure and forfeiture of apparatus

856.     This is described in more detail in the notes to clause 179.

Schedule 8: Decisions not subject to appeal

857.     This Schedule lists the types of decision taken by OFCOM and the Secretary of State that cannot be appealed under Chapter 3 of Part 2 of the Bill (see also the notes to clause 189). These include certain decisions taken under the Bill and also decisions under the Wireless Telegraphy Acts of 1949 and 1998. They also include decisions to institute, bring or carry on any criminal or civil proceedings, or to carry out any preliminary steps towards this.

Schedule 9: Arrangements about carrying on of C4C's activities

858.     This is described in more detail in the notes on clause 196.

Schedule 10: Licensing the public teletext service.

859.     This schedule is described in the notes on clause 216.

Schedule 11: Approval, imposition and modification of networking arrangements

860.     This is described in more detail in the notes on clause 289.

Schedule 12: Corresponding obligations of the BBC and Welsh Authority

861.     This Schedule sets out obligations that correspond to those in the regulatory regime for licensed providers and apply to the BBC and the Welsh Authority. Paragraph 2 provides that the BBC is under a duty to publicise any procedures established by OFCOM or the BBC for the handling and resolution of complaints about the observance by the BBC of standards set under clause 312. The BBC is also under a duty to comply with the quota on independent productions detailed in paragraph 1 of Schedule 12, which mirrors the requirements applying to licensed providers. This quota applies across the whole of the television broadcasting services provided by the BBC, subject to sub-paragraphs (8) and (9), which allow the BBC and the Secretary of State to agree that the quota will apply to particular services or groups of services collectively.

862.     This Schedule also sets out a number of obligations of the Welsh Authority. Paragraph 3 sets out the duty of the Authority to secure that each of their public service remits for S4C, S4C Digital and other services authorised by the Secretary of State under clause 202 is fulfilled. The public service remits of the Welsh Authority may be amended by order of the Secretary of State. However, before making any such amendment the Secretary of State must consult the Welsh Authority and, if the order relates to programmes that are not in Welsh, the Channel 4 Corporation. Any order amending the public service remits of S4C or S4C Digital must be consistent with the requirement that those services should further the dissemination of information, education and entertainment and should include programmes a substantial proportion of which are in Welsh. Paragraph 4 requires the Authority to prepare an annual statement of programme policy, and to monitor their performance against the proposals contained therein. Such proposals must include the means by which the Authority intend to secure that the public service remits for their services are to be fulfilled. Each statement must also contain a report on the Authority's performance in carrying out the proposals they set themselves in the previous such statement. When preparing any statement the Authority must consider any guidance by OFCOM that is in force for the purposes of clause 262 and any reports previously published under clause 261 or 351.

863.     Paragraph 5 imposes must-offer obligations on the Welsh Authority in relation to its public digital services, requiring them to make such services available for broadcast or distribution by every appropriate network and for inclusion in every satellite service available for reception in Wales. The Authority must do their best to ensure that the arrangements for broadcast of its public digital services results in their being available free of charge to as many of the intended audience for any given service as is practicable. "Intended audience" is defined in sub-paragraph (8). Paragraph 6 places a duty on the Authority to join with the providers of other must-provide services to meet the requirements of clause 270 to secure the reception of such services free of charge in areas where they would otherwise not be available.

864.     Paragraphs 7 and 8 detail the programming quotas for independent and for original productions that are to be secured by the Welsh Authority in relation to their designated public services (which, for these purposes, are to be taken together). The proportion of programming to be made up of original productions is to be agreed between OFCOM and the Welsh Authority, with a power of direction for OFCOM in the absence of an agreement.

865.     Paragraph 9 provides that the Welsh Authority is under a duty to ensure that their designated public services broadcast high quality news and current affairs programmes, at intervals throughout the period for which the service is provided and at times that include peak viewing times. Peak viewing times, for the purposes of paragraphs 8 and 9, will be determined by agreement between OFCOM and the Authority, with a power of direction for OFCOM in the absence of an agreement.

866.     Paragraph 10 requires the Welsh Authority to draw up, from time to time revise and comply with a code of practice setting out the principles they will apply when agreeing terms for the commissioning of independent productions. The code must be submitted to OFCOM for approval and will have effect only if approved by OFCOM.

867.     Paragraph 11 requires the Welsh Authority to grant to the public teletext provider, on payment of a reasonable charge, access to the facilities reasonably required for the provision of the public teletext service. In the event of a dispute about charges, the amount is to be determined by OFCOM.

868.     Paragraph 12 provides that the Welsh Authority is under a duty to ensure that S4C and S4C Digital observe the programme standards set under clause 312. Paragraph 13 requires the Authority to comply with a direction by OFCOM with respect to the establishment of complaints procedures relating to programme standards under clause 312.

869.     Paragraph 14 requires the Authority to comply with directions by OFCOM in relation to the exclusion of advertisements or types of sponsorship from its public television services. The Authority is also required, under paragraph 16, to comply with directions by OFCOM as to the amount of advertisements, the interval between them and the frequency of advertising breaks.

870.     Paragraph 15 gives OFCOM the power to direct the Authority to broadcast a correction or statement of findings for a breach of programme or advertising standards. Paragraph 21 gives OFCOM the power, after consulting the Authority, to issue directions to the Authority to ensure compliance with all relevant international obligations. The Authority is required to comply with such directions.

871.     Paragraph 17 requires the Welsh Authority to secure the observance of the fairness code for the time being in force under section 107 of the Broadcasting Act 1996. Paragraph 18 requires the Welsh Authority to include party political broadcasts and referendum campaign broadcasts in their designated public services. They must also draft and publish a document setting out their policy with regard to such broadcasts and review and revise this policy periodically.

872.     Paragraph 19 sets out the duty of the Welsh Authority to publicise OFCOM's functions under Part 5 of the Broadcasting Act 1996 in relation to the Authority and any procedures established for the handling of complaints about the observance by the Authority of standards set under clause 312.

873.     Finally, paragraphs 22 and 23 set out the duty of the Welsh Authority to observe the code under clause 298 of the Bill when providing services for the deaf and visually impaired, and to promote equality of opportunity.

Schedule 13: Financial penalties under the Broadcasting Acts

874.     Part 1 of this Schedule amends the provisions in the Broadcasting Act 1990 as regards financial penalties.

875.     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 of the amount calculated by reference to qualifying revenue.

876.     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 to 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.

877.     Under section 42B (for restricted services), and under section 55 (for additional services) of the Broadcasting Act 1990, penalties may be imposed on a restricted services licensee or on an additional service licensee if he fails to comply with licence conditions or the regulator's directions. Paragraphs 4 and 5 amend these two sections to apply the maximum penalties on the same basis in each case. The new penalties are whichever is the greater of £250,000 (instead of £50,000 in the case of restricted services) 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).

878.     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 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. The basis for calculating qualifying revenue substantively duplicates the existing provision in section 101.

879.     Under section 110 of the Broadcasting Act 1990, penalties may be imposed on a national sound broadcasting licensee, and under section 120, on a digital additional service licensee, if he fails to comply with licence conditions or directions given under that part of the Act. The existing provisions are amended to 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 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 under clause 111. There is no more distinction between a first and a subsequent offence for penalties under either clause 111 or 121.

880.     Part 2 of this Schedule amends the provisions of the Broadcasting Act 1996 as regards financial penalties.

881.     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) 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, or in any other case £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.

882.     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.

883.     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 those provisions of the Broadcasting Act 1990 that are set out in sub-paragraph (2).

These new provisions will only apply in relation to failures taking place after the commencement of this paragraph.

 
previous Section contents continue
 
House of Commons home page Houses of Parliament home page House of Lords home page search Page enquiries index

© Parliamentary copyright 2003
Prepared: 6 March 2003