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31|03|06

Reduction in cost of regulation in Tariff Tables for 2006/7

Ofcom is funded by payments from broadcasting licensees and communications providers as well as from payments for the management of the UK radio spectrum. In its Tariff Tables for April 2006-March 2007, published today, Ofcom sets out an overview of the fees due from industry for the coming financial year.

Operating costs are allocated to each sector according to the extent of work proposed for that sector in 2006/7. The per-sector costs are then divided between regulated companies according to a number of factors including relevant company revenue. Details of individual company fees are not disclosed.

Ofcom’s proposed work programme is set out in its Annual Plan, which was published in draft for consultation on 14 th December 2005. The final version of the Annual Plan will be published on 4th April 2006.

Key points include:

• For the third successive year and in line with its commitment to be an RPI-x regulator, Ofcom will operate under a budget which is lower in real terms than the operating budget for the previous year. At £129.5m the operating budget for 2006/7 will be 5% lower in real terms than the operating budget for 2005/6 and 12.6% lower than the budget for 2004/5.
• Greater efficiency savings and the rephasing of some projects means that Ofcom expects to complete its work for 2005/6 £3.5m under budget. Those efficiency savings will be remitted back to industry – in line with Sections 38 and 347 of the Communications Act 2003 – in the form of reductions in regulatory fees for 2006/7.

Ends.

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