Draft Annual Plan 2013/14

About Ofcom Annual reports and plans Consultations and statements

Published: 19 December 2012

Consultation closes: 22 February 2013

Status: Closed (pending statement)

Ofcom's Draft Annual Plan sets out our work programme for 2013/14

1.1 This Draft Annual Plan presents Ofcom's strategic purposes, proposed priorities and work programme for the twelve months from 1 April 2013 to 31 March 2014.

1.2 We encourage those with an interest in Ofcom's work to respond to this consultation by 22 February 2013. Your views will help us inform our Final Annual Plan statement for 2013/14 which will be published in time for the start of the next financial year in April 2013.

Our strategic purposes guide our draft priorities for the year ahead

1.3 Ofcom's principal duties are to further the interests of citizens in relation to communications matters and to further the interests of consumers in relevant markets, where appropriate by promoting competition. In post, our primary duty is to secure the provision of a universal postal service. Where we are carrying out our functions in relation to postal services, we are required to give priority to this primary duty in post if it appears to us that it conflicts with our principal duties.

1.4 We have defined an overarching strategy setting out those elements we think are key to delivering consumer and citizen benefits in light of these duties:

Ofcom's strategy
We will work for consumers and citizens by promoting effective competition, informed choice and the opportunity to participate in a wide range of communications services, including post. We will secure the optimal use of spectrum, through market mechanisms where possible and regulatory action where necessary. We will provide proportionate protection for consumers and help maintain audiences' confidence in broadcast content. We will contribute to public policy defined by Parliament, including high quality public service broadcasting and plurality of media ownership.
To achieve these aims, we will be consultative, transparent and proportionate. We will be informed through high quality research and information, which we will share widely. We will be mindful of the diversity of the UK and its nations. We will aim to be innovative, responsive and effective in everything we do.

1.5 In addition to this strategy statement, Ofcom's regulatory principles continue to remain relevant, including:

Ofcom will operate with a bias against intervention, but with a willingness to intervene firmly, promptly and effectively where required;
Ofcom will strive to ensure that its interventions will be evidence-based, proportionate, consistent, accountable and transparent in both deliberation and outcome; and
Ofcom will always seek the least intrusive regulatory mechanisms to achieve its policy objectives.

1.6 This year, we have refined our strategic purposes, first established in 2011/12, to reflect our strategy and frame our programme of work over the coming years.

1.7 Ofcom also has a wider strategy in relation to citizens - supporting public policy is not the only way that we discharge our duties in this area. Specific actions and interventions in the citizen interest will continue to be spread across all of our strategic purposes rather than falling solely under our role of contributing to and implementing public policy defined by Parliament.

1.8 Ofcom's work programme for 2013/14 is underpinned by these strategic purposes and informed by:

last year's priorities and our progress against these;
wider market developments, including the changing consumer use of communications services;
legislative changes to our duties; and
areas where Ofcom provides technical and industry expertise to advise government.

We have delivered a number of priorities from 2012/13 and made significant progress on many others

1.9 There are a number of priorities which featured in the Annual Plan 2013/14 which we have already delivered or will have done by the end of the 2012/13 financial year. These include:

Deliver the Government's spectrum guarantees for the London 2012 Olympic Games and Paralympic Games - Ofcom successfully delivered the Olympics and Paralympics spectrum guarantees with minimal disturbance to users or viewers.
Auctioning of the 800 MHz and 2.6 GHz spectrum bands - Ofcom has recently initiated the application process for the upcoming 4G auction which will take place over a number of weeks from January 2013. This represents the most important spectrum release for meeting consumer demand for wireless services in recent times. These two bands add up to 250 MHz of additional mobile spectrum, compared to 333 MHz in use today.
Determine the needs of postal users - in October Ofcom published a consultation document on the reasonable needs of users in relation to the market for the provision of postal services in the United Kingdom, with a full statement to follow by the end of 2012/13.
Ensure effective competition in business connectivity and voice telephony markets - in June 2012 Ofcom consulted on proposals to promote competition in the provision of leased lines in the UK. In spring 2013, we will publish our final decision. In 2012 we also started our review of the market for fixed voice call origination and termination and will publish consultation proposals early in 2013. We aim to conclude this review by September 2013.
Assess the provision of communications services in the nations - in Q4 2012/13 we will publish a report studying the economic geography of communications services in the UK and each of the nations.
Ongoing advice to the Government on the measurement of media plurality and contributing to the Leveson Inquiry - Ofcom submitted two reports to the Secretary of State advising on approaches to the measurement of media plurality. We also gave evidence and provided advice to the Leveson enquiry on issues including models of media regulation. Under our media plurality duties we also completed a public interest test on Global Radio's purchase of GMG Radio.

1.10 There are a number of items where we have made significant progress but which have carried over into the forthcoming financial year:

timely spectrum clearance in 800 MHz and 2.6 GHz to enable new awards while mitigating co-existence issues;
promote effective choice for consumers by ensuring that clear information on service price and quality is available;
develop and implement policies that will improve the ease of switching between communications providers;
secure the provision of the universal postal service; and
implement Digital Economy Act 2010 provisions on online copyright infringement.

The communications sector continues to develop rapidly and challenge our approach to regulation

1.11 Communications are at the heart of all of our lives and they play an important economic and cultural role. The communications sector enables participation and social cohesion in UK society. Furthermore the sector makes a substantive direct contribution to the economy (in 2011 the UK communications industry revenue stood at 53.3bn ) and indirectly aids UK growth through increased business productivity, improved access to markets and enhanced speed and quality of information flows.

1.12 Consumer behaviour and new technologies are driving change in the market and Ofcom needs to ensure that its work reflects and responds to these developments, including:

The continued growth in superfast broadband availability and adoption - in March 2012 BT and Virgin Media's superfast broadband services were available to around 65% of UK homes. This was seven percentage points higher than a year previously, mainly as a result of BT's ongoing fibre-to-the-cabinet rollout. At the end of March 2012 there were 1.4 million UK superfast broadband connections; 6.6% of all connections.
The increase in take-up of connected devices - smartphone ownership rose to 39% of UK adults in Q1 2012, up 12 percentage points on 2011. Tablet ownership rose to 11% of UK households, up 9pp year on year, and already now stands at 19% whereas connected TV ownership stands at 5% of TV homes.
The increasing demand for mobile data - as a result of the proliferation of connected devices and changing consumer behaviour, the average time spent using mobile data services was 2.1 hours a month in 2011, 25 minutes per month (24.7%) more than in 2010, while the volume of data consumed more than doubled in the 18 months to January 2012.

Our proposed priorities for 2013/14

1.13 The priority areas in Figure 1 will be our primary focus over the next financial year. Some of our priority areas in last year's work programme will continue into 2013/14, alongside a number of new areas of work.

1.14 We will assess the successful delivery of our proposed priorities for 2013/14 against the positive outcomes we are seeking to secure for citizens and consumers. To achieve this, we have identified interim and final outcomes for each of our priorities (see pages 41 and 42) and we will measure our progress towards delivering these in our Annual Report.

1.15 As well as these priorities, we will undertake a range of other work as part of our 2013/14 programme (discussed in Section 5), reflecting our statutory duties and responsibilities. We will also continue to deliver other services to stakeholders, such as licensing access to the radio spectrum (detailed in Section 6). We will deliver these services in the most efficient and effective way possible.

1.16 We will also continue to remain responsive to new issues, emerging concerns that affect consumers across the UK and new government requests, focusing on those areas where we can make the most difference.

1.17 In addition to responding to requests from the Government and to help it to implement its policies in respect of communications matters, we will also aid government in the UK nations to ensure that consumer and citizen benefits are available across and within all the nations of the UK.

1.18 For the first time this year we include a list of areas of potential future relevance to Ofcom. These areas comprise possible future priorities for the organisation and emerging issues on which Ofcom may be required to have a view in the future. Both are areas over which Ofcom will continue to have a watching brief, but where it is too early to undertake work within next years Annual Plan.

Consultation questions

1.19 We are seeking views from all our stakeholders on our proposed priorities and work programme for 2013/14. In particular, it would be helpful if you could consider the following questions: