Funding for programme-making and special events statement

Statement published 05|08|10

Executive summary

1.1 Last year we decided to clear the 800 MHz band so it matches the spectrum being released in other European countries. This will benefit people across the UK because the spectrum will be able to be used for new mobile broadband services. Because of this, programme-making and special events (PMSE) users will have to stop using channel 69. To help these users move, we have made a commitment to:

• provide replacement spectrum and maintain PMSE access to channel 69 during the changeover period; and
  
• provide funding to eligible PMSE users who are affected by us clearing channel 69.

1.2 In our 15 April 2010 interim statement on our plans for managing PMSE spectrum, we outlined the arrangements for different types of user moving from channel 69 to channel 38, or other replacement spectrum.

1.3 In this statement we focus on funding. The previous Government, in its Digital Britain final report, said that it supported the proposal to clear the 800 MHz band and that it was prepared, in principle, to provide funding for users who had to move.

1.4 In August 2009, we consulted on the detailed arrangements for providing funding for eligible users (below we explain which users are eligible for the scheme). We said we would pay out funding to users based on the value of their existing equipment and that this was in line with our powers to make grants to promote the efficient use of spectrum. Most of those who responded to this consultation said that the funding should cover the full cost of replacing equipment. They said that providing anything less than the full replacement cost would mean some users would find it difficult to invest in new equipment.

1.5 The Government is responsible for making final decisions on the level of funding and how it is provided. It considered the arguments for providing funding to cover the full cost of replacing channel 69 equipment, including those arguments we thought would raise issues wider than the efficient use of the spectrum.

1.6 On 28 July 2010, the Department for Business, Innovation and Skills announced the new Government's plan to provide a funding package to support PMSE users moving out of channel 69. The package does not cover PMSE users in other channels. The funding will provide a contribution towards the cost to PMSE users of replacing their channel 69 equipment. It will be based on the cost of bringing forward investment in new equipment. PMSE users will receive the same amount no matter what age the channel 69 equipment that needs to be replaced is, as long as it is in working order and they meet the other requirements of the scheme.

1.7 This statement gives more information on how funding will be provided as a result of the Government's decision to provide funding which will be a contribution to the cost of replacing the equipment. We set out the conditions that users must meet to qualify for funding, the evidence that will be needed to check claims and how payments will be worked out. We finish by setting out the next steps for launching the funding scheme.

Who will be eligible for funding?

1.8 To be eligible for funding, a user must have held a licence to use channel 69 equipment on 2 February 2009 (when we gave notice that we planned to clear channel 69), or in the 12 months before this date. The only exception to this requirement is companies who can prove their business involves hiring out, rather than using, equipment which needs a channel 69 licence.

1.9 Users will only be able to receive funding for working equipment that tunes to channel 69 but not channel 38. They must have bought that equipment before 30 June 2009 (when we confirmed channel 38 would be replacing channel 69).

How will we work out how much funding each person will get and check their claims?

1.10 The contribution to the cost of replacing equipment will be based on the estimated cost to users of having to invest in new equipment before the end of 2012 rather than in 2018 (as they might have reasonably expected based on our previous statements on the availability of channel 69 to PMSE users). This works out as roughly 55% of the cost of replacing the equipment with an equivalent model. If users choose to modify rather than replace their equipment, we will pay for the cost of the modification (up to the amount that we would have paid as a contribution towards the replacement).

1.11 We will use a 'rate card' to decide on the amount of funding to be paid. The rate card shows the amount of funding available for each piece of channel 69 equipment, worked out against the price of equivalent current equipment (channel 38 where available, channel 69 where not). The amount on the rate card is based on the assumption that users will give up their equipment on 1 October 2012. As this is when PMSE users will no longer have the first right of access to channel 69 in any part of the UK. Funding will be slightly higher for equipment claimed for earlier than 1 October 2012 (about 0.1% extra per week). In Annex 6, you can find the list of eligible equipment models affected by clearing channel 69, and the amount of funding that we would pay if users stopped using their equipment on the latest possible date 1 October 2012.

1.12 Users who make a claim will need to prove to us that they own the equipment for which they want funding unless the total replacement value of their claim falls below 6000. This takes into account the circumstances of smaller (particularly non-professional) users who may not have records of when they bought their equipment. Users who are not VAT-registered will receive an extra 20% funding to reflect the fact that they will not be able to reclaim or offset VAT on items they buy.

When will the funding scheme start?

1.13 First, users will need to register their claims through our appointed PMSE funding scheme administrator, Equiniti Ltd. Registration will open on 23 September 2010 and close at the end of December 2010. The scheme administrator will be available to support PMSE users, through the website www.pmsefunding.co.uk, or by phone on 0800 011 3617.

1.14 Users will be asked to provide details of all the channel 69 equipment they own and want to claim for, whether they want to give it up or modify it, when they want the claim to be processed and in how many batches. They can ask that their claim is processed at any time between March 2011 and December 2012, and it can be done in batches if necessary. For example, a user may want to claim for half of their channel 69 equipment in July 2011 and the other half in October 2012, after the London Olympics.

1.15 Users can visit the website now to find out about the scheme and review the rate card. The rate card shows how much funding is available for each item of relevant channel 69 equipment in line with the Government's announcement on funding, and the policy described in this statement. We are asking PMSE users to check the information included in the rate card and suggest, to the scheme administrator, any corrections which may be needed. However, the administrator will need to receive details of these corrections by 2 September. After this, we will review any suggested corrections and decide whether we should change the rate card.

1.16 We expect that the administrator will start paying out funding from March 2011 after receiving formal permission from HM Treasury to pay out grants. We will publish the final rate card, including any changes, at the same time. When the funding scheme administrator processes the claim, they will check that it meets the criteria of the scheme before they pay out the funding.