The Electronic Communications (Universal Service) (Costs) Regulations 2020
| Year | 2020 |
2020 No. 545
Electronic Communications
The Electronic Communications (Universal Service) (Costs) Regulations 2020
Made 28th May 2020
Coming into force 15th June 2020
The Office of Communications (“OFCOM”), in exercise of the powers conferred by sections 71(4), 71(5), 71(7), 71(9) and 403(7) of the Communications Act 20031(the “Act”) make the following Regulations.
Before making these Regulations, OFCOM have given notice of their proposal to do so in accordance with section 403(4)(a) of the Act, published notice of their proposal in accordance with section 403(4)(b) of the Act, and have considered the representations made to them before the time specified in the notice in accordance with section 403(4)(c) of the Act.
Citation and commencement
1. These Regulations may be cited as the Electronic Communications (Universal Service) (Costs) Regulations 2020 and shall come into force on 15th June 2020.
Interpretation
2. In these Regulations—
“the Act” means the Communications Act 2003;
“amount to be collected” shall be construed in accordance with regulation 7;
“amount to be compensated” means the amount, in pounds sterling, which OFCOM have determined, under section 71(2) of the Act, that is or would be unfair for the universal service provider to bear, or continue to bear;
“director” means any person occupying the position of director, by whatever name called;
“fund” means an administrative arrangement set up to compensate a universal service provider for a particular amount to be collected through contributions made by contributors;
“outstanding sum” has the meaning given in regulation 15(1);
“specific turnover” means the turnover that a person generates—
(a) in a time period specified by OFCOM;
(b) in respect of such networks, services or facilities provided or made available by that person as specified by OFCOM;
(c) which is calculated in a manner specified by OFCOM; and
(d) after deducting such payments made to other persons as are specified by OFCOM;
“unfair financial burden” means the part of the financial burden of complying in relation to any matter with any one or more of the universal service conditions calculated in accordance with section 70(3) of the Act which OFCOM have determined that it is or would be unfair for a universal service provider to bear, or continue to bear, in accordance with section 71(2) of the Act;
“universal service” means the provision in the United Kingdom of one or more of the things falling within section 65(2) of the Act set out in any universal service order made by the Secretary of State under section 65(1) of the Act; and
“universal service provider” means a person who is designated in accordance with regulations made by OFCOM under section 66(1) of the Act2to provide the whole or part of a universal service.
Matters OFCOM must have regard to and information OFCOM must take into account when determining the extent of a financial burden
3.—(1) When determining, under section 70(1) of the Act, the extent of the financial burden which exists for a particular designated universal service provider of complying in relation to any matter with any one or more of the universal service conditions applied to it, OFCOM must have regard to such of the matters set out in paragraph (2) as appear to them to be appropriate in that particular case.
(2) The matters are—
(a)
(a) the costs incurred in complying with the relevant universal service conditions;
(b)
(b) the extent to which these costs were efficiently and necessarily incurred for the purpose of complying with the relevant universal service conditions;
(c)
(c) the revenues and any other direct benefits generated as a result of complying with the relevant universal service conditions;
(d)
(d) any indirect benefits that the universal service provider derives from its designation as a universal service provider and the compliance with the relevant universal service conditions;
(e)
(e) whether or not the universal service provider has made a request that OFCOM make a determination under section 70(1) of the Act and the sufficiency of information which has been provided to OFCOM together with that request; and
(f)
(f) any other matters which OFCOM consider to be relevant having regard to the facts and circumstances of the case.
(3) OFCOM must have regard to all of the information relating to the matters set out in paragraph (2) provided to OFCOM by the universal service provider (or by any other person) including, in particular—
(a)
(a) the universal service provider’s estimate of the financial burden of complying with the relevant universal service conditions;
(b)
(b) the calculations performed by the universal service provider in order to arrive at the estimate referred to in paragraph (a);
(c)
(c) the universal service provider’s explanation of the methodology adopted when performing the calculations referred to in paragraph (b);
(d)
(d) the accounts and any other information serving as the basis for the calculations referred to in paragraph (b);
(e)
(e) the universal service provider’s explanation of the steps taken to verify the accounts and any other information described in paragraph (d);
(f)
(f) the evidence that the costs of complying with the relevant universal service conditions were efficiently and necessarily incurred; and
(g)
(g) any other information which OFCOM consider to be relevant having regard to the facts and circumstances of the case.
Information to be provided to OFCOM if a universal service provider makes a request for a review
4. If a universal service provider requests that OFCOM make a determination under section 70(1) of the Act, that provider must provide the information described in regulations 3(3)(a) to 3(3)(f) to OFCOM together with that request.
Matters OFCOM must have regard to and information OFCOM must take into account when determining the unfairness of any financial burden which has been determined to exist
5.—(1) When determining under section 71(2) of the Act whether it is or would be unfair for the universal service provider to bear, or to continue to bear, the whole or any part of so much of the burden of complying with one or more of the universal service conditions applied to it, OFCOM must have regard to such of the matters set out in paragraph (2) as appear to OFCOM to be appropriate in that particular case.
(2) The matters are—
(a)
(a) the extent to which the universal service provider is subject to competition in relevant markets;
(b)
(b) the extent to which the universal service provider is constrained by regulation in relevant markets;
(c)
(c) the type and nature of the particular designation procedure set out in regulations made under section 66(1) of the Act which has been used for the designation of that universal service provider, including whether or not a competitive procedure has been used;
(d)
(d) the likely costs to OFCOM and other persons associated with establishing and operating a fund under these Regulations;
(e)
(e) any previous determinations under section 71(2) of the Act relating to the burden of complying with universal service conditions relating to the same universal service; and
(f)
(f) any other matters which OFCOM consider to be relevant having regard to the facts and circumstances of the case.
(3) OFCOM must also have regard to any explanation provided by the universal service provider as to why that provider considers that it is, or would be, unfair for it to bear, or continue to bear, the whole or part of the financial burden of complying with the relevant universal service conditions.
Application for a determination that contributions are to be made by communications providers to whom general conditions are applicable for meeting an unfair financial burden
6. If the universal service provider wishes to make an application to OFCOM for a determination under section 71(3)(b) of the Act and OFCOM have announced a commencement of a review under section 70(1) of the Act—
(a) the provider must submit the application on or before the date falling two months after the date on which OFCOM announced the commencement of the review, under section 70(1) of the Act, of the extent of the financial burden which exists for that provider of complying in relation to any matter with any one or more of the universal service conditions applied to it; and
(b) the application must—
(i) be made in writing to OFCOM;
(ii) state that it is an application for a determination under section 71(3)(b) of the Act; and
(iii) be signed by a director of the universal service provider.
Calculating the amount to be collected
7.—(1) If—
(a)
(a) OFCOM have determined, under section 71(2) of the Act, that it is or would be unfair for the universal service provider to bear, or continue to bear, the whole or part of the financial burden of complying with the relevant universal service conditions;
(b)
(b) the universal service provider has made an application under regulation 6 which meets the requirements set out in that regulation; and
(c)
(c) regulation 7(3) does not apply,
OFCOM must determine the amount to be collected for meeting the unfair financial burden of complying with the relevant universal service conditions.
(2) The amount to be collected, in pounds sterling, must be calculated by deducting from the amount to...
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