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Charging Principles: no change

Posted by malcolm on Wednesday, July 28th, 2004 at 18:11

Ofcom has published its consultation on the charging principles it intends to use in the future when determining the formula for the Administrative Charging by which it recoups its own running costs from regulated businesses.

Highlights for the communications sector are

  • Ofcom considered allowing businesses to deduct their Wholesale Costs from Relevent Income, but rejected this on the grounds that it would be too complicated and difficult to verify;
  • Ofcom does not intend to permit businesses to elect to pay in one lump sum their share of the government loan that underwrote Ofcom’s initial costs
  • There will therefore be no change to the existing charging basis for the telecoms sector
  • Ofcom intends to publish a list of businesses that are charged

Had it allowed a deduction for wholesale costs, Ofcom calculates that ISPs and telecoms resellers would, on average, win a 59% reduction in the levy. While some of this would be caused by some such businesses falling below the £5m threshold and so not paying any charges at all, so-called “Newer fixed-line operators” like Energis and Colt would still win a 20% cut in the levy. BT and Kingston, however, would face an 8% increase.

The full consultation is available as a PDF; responses are due by 30th September.

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