Policy background Miscellaneous Other provisions relating to Ofcom
In most regulated sectors the regulator is required to have regard to government priorities. For example, Part 5 of the Energy Act 2013 provides for the Secretary of State to set out the strategic priorities, and other main considerations, of the government in formulating its energy policy for Great Britain, and the particular outcomes to be achieved as a result of the implementation of that policy. Ofgem must have regard to the strategic priorities when carrying out regulatory functions; further, the Secretary of State and Ofgem must carry out their respective regulatory functions in the manner each consider is best calculated to further the delivery of the policy outcome. Section 2A of the Water Industry Act 1991 (as amended by section 24 of the Water Act 2014) allows the Secretary of State to publish a statement setting out strategic priorities and objectives for Ofwat in carrying out relevant functions relating wholly or mainly to England (section 2B makes equivalent provision for Wales). Ofwat must carry out those functions in accordance with any such statement. Telecommunications infrastructure is of vital importance to the UK’s economy and radio spectrum is a limited resource subject to increasing demands from technologies dependent on mobile connectivity. It is the government’s view that a strategic approach is needed to regulate these matters. The Act makes provision for Ofcom to have regard, when carrying out its functions relating to telecommunications, the management of radio spectrum and postal services, to a statement setting out the strategic priorities of the government.
	The government believes that economic regulators should be independent from government and funded by industry. Ofcom is largely funded through fees from industry for regulating broadcasting, postal services and communications networks. Additionally Ofcom is funded by government to perform statutory duties that do not permit the raising of fees or charges from industry, such as its duty to tackle silent and abandoned calls. Ofcom is prohibited from charging fees to cover these costs. As referred to above, Ofcom is also tasked with managing and granting rights of use in relation to spectrum and levies fees and charges on those who use the radio spectrum under the 2006 Act. In 2014/15 there were 79,910 2006 Act licences in issue, covering a wide range of frequencies, technologies and methods of use. Ofcom collects the money raised from these licences and pays it to into the Consolidated Fund. The government returns approximately £50m of these receipts as grant in aid to Ofcom to fund its spectrum management and other activities. The Act allows Ofcom to cover all its non-fee raising activities from spectrum management receipts and then only return the net proceeds to government. This will not increase costs or fees (other than for satellite filings – see below) but will create an accounting mechanism that aims to allow Ofcom to be fully independent.
	The Act enables Ofcom to charge for the satellite filings work it does in relation to obtaining or maintaining international recognition of assignments of radio frequencies to satellite stations under the International Telecommunication Union’s Radio Regulations. The International Telecommunication Union is the United Nations agency for information and communication technologies. Satellite filings facilitate equitable access to and rational use of the natural resources of the radio-frequency spectrum and the geostationary-satellite orbit. The International Telecommunication Union manage this through the maintenance of a Master International Frequency Register so that frequency assignments and any associated orbits obtain international recognition and there is less chance of interference. Ofcom’s existing powers to charge fees do not currently cover satellite filings so they provide this service free of charge, with the cost of filings being covered by public money. The Act corrects this anomaly, allowing Ofcom to charge, as is already the case for regulators in many other countries who charge for providing this type of service.
	The Scotland Act 2016 implemented the Smith Commission Agreement, which was published in November 2014 having gained all‐party agreement in Scotland. The Smith Commission Agreement provided that Scottish Ministers should have the power to appoint a member to the Ofcom Board, Ofcom should lay its annual report and accounts before the Scottish Parliament and submit reports to, and appear before, committees of the Scottish Parliament. Sections 65 and 66 of the Scotland Act 2016 have implemented this. The government has agreed with the Welsh Government and the Northern Ireland Executive to make equivalent provision for those jurisdictions. This Act makes provision for Northern Ireland. Section 68 of the Wales Act 2017 makes equivalent for provision for Wales.