Review of Business Radio licence fees in Band I

Published 29|06|09

Our consultation

Our proposals

1.1 In our consultation ^(-1-) we proposed revised fees for Technically Assigned and Area Business Radio licences in Band I (55.750 MHz to 68 MHz). The existing fee levels were based on Administered Incentive Pricing (AIP), which had assumed that there was a positive opportunity cost for this spectrum. Given the legal restrictions on the use of the Band and the comparatively poor quality of the spectrum at these frequencies (in particular its susceptibility to interference), we decided to revisit this assumption, particularly as the resultant fee levels might dissuade otherwise efficient use of the spectrum.

1.2 We therefore commissioned a report from consultants Analysys Mason ^(-2-) into the opportunity cost of the Band. They considered that the nature and level of use of the Band meant that the opportunity cost was zero. We therefore reviewed the fees and proposed that they should not be based on AIP but should instead contribute to the recovery of our administrative costs. However, we wished to retain the existing Business Radio fees structure and products (Technically Assigned, Area and so on), to minimise administration costs.

1.3 The fees that we consequently proposed were thus as follows.

Licence	Current fee £pa (-3-)	Proposed fee £pa
Technically assigned	75	75
Area-defined (UK)	3,300	600
Area-defined (England)	2,758	150
Area-defined (Wales)	163	150
Area-defined (Scotland)	285	150
Area-defined (Northern Ireland)	93	150
Area-defined GB (England, Wales and Scotland)	3,206	450
Area-defined per Trading Unit in population category A	395	150
Area-defined per Trading Unit in population category B (subject to an absolute minimum annual fee of £75 pa)	50	50
Area-defined per Trading Unit in population category C (subject to an absolute minimum annual fee of £75 pa)	5	5

Footnotes:

  1.-http://www.ofcom.org.uk/consult/condocs/bandi/bandi.pdf

  2.-http://www.ofcom.org.uk/consult/condocs/bandi/report.pdf

  3.- See www.ofcom.org.uk/licensing/applications08/changes/Fees/nonexcelguide.pdf