Own-initiative investigation into Genesis Communications Limited: failure to pay Ofcom’s administrative charges

02 April 2008

Complainant: Ofcom own-initiative
Complaint against: Genesis Communications Limited (“Genesis”)
Case opened: 6 November 2007
Cased closed: 31 March 2008
Issue: Failure to pay Ofcom’s administrative charges
Relevant instruments: Ofcom’s enabling powers relating to the collection of administrative charges for electronic networks and services and associated facilities are found in sections 38 to 44 of the Communications Act 2003 (the “Act”)

Ofcom opened this investigation to determine whether there were reasonable grounds for believing that Genesis was in contravention of the requirement to pay the administrative charge. As part of this investigation, Genesis has accepted that it was providing electronic communications services and was therefore liable to pay the administrative charge. The level of the charge was reduced following the submission by Genesis of revised relevant turnover figures based on audited accounts. Genesis has now met its obligations by paying the administrative charge to Ofcom and Ofcom has therefore closed its investigation.

Text published when case was opened

Ofcom is partly funded by administrative charges levied on (among others) certain designated providers of electronic communications services. Ofcom is required to raise income from each of the sectors it regulates to cover the costs to be incurred by Ofcom in regulating that sector, together with a proper apportionment of Ofcom’s ‘common costs’ to each of those sectors.

Ofcom’s administrative charges for designated providers of electronic communications networks and services are levied according to self-certified relevant turnover for each provider.

On 31 March 2005, Ofcom designated descriptions of those persons liable to pay administrative charges under section 38 of the Act. That designation is set out in the statement entitled “Designation and relevant activity guidelines for the purposes of administrative charging” (http://www.ofcom.org.uk/consult/condocs/designation/statement/statement.pdf).

In particular, the designation prescribes as follows: “[d]uring each Charging Year, the Electronic Communications Network, Electronic Communications Service or Associated Facility which is designated for the purposes of section 38 of the Act is any Electronic Communications Network, Electronic Communications Service or Associated Facility where the person providing that Network or Service, or making available that Associated Facility had a Relevant Turnover from Relevant Activities of £5 million or more in the last but one calendar year prior to the charging year in question. (For example, if the relevant Charging Year commences on 1 April 2007, the relevant turnover will be for the calendar year of 2005).”

On 30 March 2007, Ofcom published tariff tables for its administrative charges for 2007/08 (http://www.ofcom.org.uk/about/accoun/tarifftable0708/tariffs0708.pdf).

The invoice issued to Genesis on 30 April 2007, for the administrative charge based on its self-certified ‘Relevant Turnover’ for the year ending 31 December 2005, has not been paid. Genesis disputes:

  1. that Genesis is providing an electronic communications service (and so Genesis argues that it is not obliged to pay such an administrative charge); and
  2. if Genesis is required to pay such an administrative charge, the level of that charge.

Ofcom has therefore opened an investigation to consider whether to take action under section 40 of the Act, the first step of which is for Ofcom to determine whether there are reasonable grounds for believing that Genesis is in contravention of a requirement to pay such an administrative charge.

Case Leader: Lisle Alden ( email:lisle.alden@ofcom.org.uk)
Case Reference: CW/00970/11/07