Commentary on Sections Schedule 4: Recovery of administrative charges incurred by OFCOM
437.Paragraph 1 provides that a postal operator providing services within the scope of the universal postal service must pay OFCOM any applicable administrative charge fixed by OFCOM. OFCOM can only fix an administrative charge if they have set out in a statement the principles they propose to apply in determining charges. The principles must be such that on OFCOM’s estimates the total amount payable (from all operators combined) each year meets but does not exceed OFCOM’s costs of carrying out their postal functions. OFCOM may impose different charges on different operators.
438.Paragraph 1 further provides that at the end of each charging year OFCOM must publish a financial statement setting out total charges received that year, total charges outstanding that year, and cost to OFCOM of carrying out their postal service functions. Any surplus or deficit is to be carried forward and taken into account in determining charges for the following year.
439.Paragraph 2 defines OFCOM’s postal services functions for the purposes of paragraph 1. Those functions extend to incidental functions (as defined by paragraph 2(3)), including any preparatory or facilitatory steps taken by OFCOM before as well as after the Act comes into force (as provided for in paragraph 2(4)).
440.Paragraph 3 provides for the procedure under which a charge is to be fixed by OFCOM under paragraph 1.
441.Paragraph 4 provides that OFCOM may only bring proceedings against a person for recovery of a charge imposed under paragraph 1 if they have given the person notification, in accordance with the procedure set out, of the amount they are seeking to recover. OFCOM must also specify the period that the person has to make representations about the notification and to pay the outstanding amount. The period must be at least one month, but it can be shorter if the two parties agree. It can also be shorter if OFCOM believe the contravention is a repeated one and they have determined that under such circumstances a shorter period would be appropriate. OFCOM may also allow a longer period.
442.Under paragraph 6, OFCOM may impose a penalty on a person acting in contravention of a requirement to pay a charge as outlined under paragraph 1 and the procedures detailed under paragraph 4 have been followed, and the person has still not paid the outstanding amount.
443.The amount of the penalty is to be determined by OFCOM and must be appropriate and proportionate to the contravention. It cannot be more than twice the charge fixed for the year in relation to which the contravention occurred. In determining the amount OFCOM must have regard to representations made by the person and to any steps the person has taken towards paying the outstanding amounts.
444.If OFCOM decide to impose a penalty they must notify the person within one week of making their decision and fix a period by which the penalty is to be paid.
445.Under paragraph 7 OFCOM may give a direction to a contravening operator to suspend or restrict their services.
446.For this to happen four conditions must be met. The first is that the contravening operator is or has been in serious and repeated (as provided for in paragraph 8(7)) contravention of requirements to pay charges. The second is that the bringing of proceedings for the recovery of amounts outstanding has not secured compliance by the contravening operator and has no reasonable prospect of doing so. The third is that the imposition of penalties under paragraph 6 failed to secure compliance. And the fourth is that giving the direction is appropriate and proportionate to the seriousness of the contraventions.
447.Paragraph 8 explains that such a direction will be for an indefinite period unless otherwise stated.
448.A direction may also impose such conditions on the operator as appear to OFCOM to be appropriate to protect users of the operator’s services. These may require making compensation payments for loss or damage, or for inconvenience. OFCOM may only give the direction if they have notified the contravening operator, provided the operator with an opportunity of making representations and proposals as to how to remedy the situation, and considered those representations. The period for this must be at least one month.
449.OFCOM may revoke a direction if they consider it appropriate.
450.Under paragraph 9 a person commits an offence if they provide a service while the entitlement to do so is suspended by a direction under paragraph 7 or in contravention of restriction contained in that direction.
451.If a person is guilty of an offence then they are liable to a fine on conviction.