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Ofcom consultation on introducing Administered Incentive pricing for the maritime and aeronautical sectors: October update

Update published 20|10|08

  • Ofcom continues to support the established principle of applying discounts to spectrum fees payable by charities.
  • The RNLI may see its charges fall as a result of our proposal to offer a single, lower cost licence for multiple users.
  • Ofcom is making no proposals to impose charges on Mountain Rescue teams for radio spectrum.
  • Consultation still open – no decisions have been made.

Ofcom is consulting on proposals to revise its fees for using maritime and aeronautical radio spectrum. The consultation period runs until 30 October and will be followed by a more detailed set of proposals around the turn of the year.

There has been widespread interest in these proposals, and concern has been expressed about possible impact on charities providing vital safety of life services, such as the RNLI.

Ofcom is committed to ensuring that the use of spectrum by these charities is fully protected, and to supporting their work.

This note sets out the current arrangements under which charities use radio spectrum. It also explains an option, which will be available under the new arrangements, which may allow charities such as the RNLI to benefit by paying lower fees in future than now.

This is because the proposals allow organisations that have a large number of transmitters around the country (like the RNLI) to take out a licence that effectively gives them a volume discount, by allowing them to operate any number of transmitters across the UK.

We expect that for widespread organisations like the RNLI this would be much cheaper than paying separate fees for each channel at each location, and could lead to a reduction in fees compared to now.  We estimate that, based on the RNLI’s usage, its fee under the new arrangements would be less than £20,000.

The position today

Charities which have the safety of human life as their objective currently enjoy a discount of 50% on any fees which they are liable to pay. This is a well established principle which Ofcom has no plans to reduce or withdraw.

Most radio channels used by search and rescue teams are assigned to, and paid for by, the Maritime and Coastguard Agency (MCA) which is an executive agency of the Department for Transport funded by general taxation. The fees which the MCA pays for these channels already reflect the value of the spectrum (rather than just the administrative cost of processing licences). So there is unlikely to be any significant increase, if any, in what the MCA pays for these search and rescue channels.

Mountain rescue teams are covered by these arrangements with MCA and do not pay any fees for the use of these channels. Ofcom has no plans to impose a charge on mountain rescue teams for the use of these channels.

The RNLI uses some of the search and rescue radio channels held by the MCA. Ofcom has no plans to impose a charge on RNLI for the use of these channels either.

The RNLI and some other maritime rescue organisations are also licensed to use specific communications channels in their own right. Like other users they currently pay fees for those radio channels, but as a charity they enjoy a 50% discount. Ofcom has proposed that the basis on which fees for some maritime radio channels are set should be changed. There is understandable concern about the possible impact on the RNLI.

Proposals for the future

We have proposed that in future fees for these radio channels should vary according to the type of use: for example, how powerful the transmission is and how much demand there is for radio channels in the particular locality, instead of being based only on administrative cost. This is the same approach as has been used for many years to charge for the use of spectrum by the Ministry of Defence, emergency services and commercial users. It is intended to help ensure that spectrum is used efficiently.

Under these proposals, some current users (who use low power transmitters and/or are in areas of low demand) would pay less than now. Others (with high power transmitters and/or in areas of high demand) would pay more. Our initial proposals are for fees which would range from £75 to £1480 per year for a radio channel at a transmitter site.

However, Ofcom will also offer organisations that have a large number of transmitters around the country the option of taking out a licence that allows them to operate any number of transmitters across the UK.

This arrangement acts effectively like a volume discount. It already operates well with spectrum licences granted in other sectors, and we think it would be logical to apply the same rules to maritime licences.

We expect that for widespread organisations like the RNLI this would be much cheaper than paying separate fees for each channel at each location, and could lead to a reduction in fees compared to now.  We estimate that, based on the RNLI’s usage, its fee under the new arrangements would be less than £20,000.

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