Proposals for the setting of regulatory fees for video on demand services for the period up to 31 March 2011

Executive Summary

Summary of Decisions

1.1 This Statement is a joint Statement between Ofcom and the Association for Television on Demand ("ATVOD"), the body that Ofcom designated on 18 March 2010 as the co-regulator for video on demand ("VOD") editorial content before our consultation on proposals for the setting of regulatory fees for providers of video on-demand services (defined as 'on-demand programme services' - "ODPS" ) for the period up to 31 March 2011 ("the VOD Fees Consultation") .

1.2 Having duly considered and taken account of the responses we received to the VOD Fees Consultation and in light of all the information currently available and the relevant legislative provisions, Ofcom and ATVOD have decided:

• that, having considered the alternative approaches to setting fees set out in the VOD Fees Consultation for the reasons more fully explained in Sections 3 and 4 of this Statement, a flat-rate fee approach to the setting of fees is the most appropriate basis to adopt in this first year of regulation in order to ensure that ATVOD is adequately funded to carry out its regulatory activities for the period 1 April 2010 to 31 March 2011;
• that having reviewed the estimated number of notifiable services, for the reasons more fully set out in Section 3 of this Statement, and taking account of the statutory requirement to ensure that the aggregate amount of fees levied are an appropriate contribution to the estimated likely costs of regulation for 2010/2011, the previous working assumption that fees should be calculated on the basis of an estimated 150 notifiable services should be changed to 129 as a more reasonable basis on which to calculate fees for the relevant period;
• that accordingly, a fee per service of £2,900 now represents the appropriate contribution to be paid by providers towards the likely costs of carrying out the relevant regulatory functions during the period 1 April 2010 to 31 March 2011 ("the 2010-2011 Fees"); and
• that having taken account of concerns raised by a few respondents to the VOD Fees Consultation that there may be some (as yet unidentified) small scale providers of actual or prospective ODPS services who might find a fee of £2,900 prohibitive, and that such a fee would therefore not be justifiable or proportionate in relation to them, we should seek further information from the providers themselves. To date, we have not received any representations on such concerns from any small-scale providers themselves, nor have any small-scale providers been specifically identified to us. We are therefore inviting any small-scale (local, community) providers of 'on demand programme services' ("ODPS") (or those who intend to provide such services) who believe they may have genuine difficulties in being able to pay the £2,900 fee - either because they would be inhibited from being able to provide a new ODPS or they would be prevented from continuing to provide an existing one) - to contact Adam Baxter of Ofcom in writing by 5 pm on 15 July 2010 in writing with full details of their particular circumstances. These circumstances would include, in particular, details of their actual or estimated revenue and turnover and information about themselves (e.g. who they are, and what their status is) and the service they are providing or intend to provide. If the evidence suggests that a separate limited category of provider exists for whom a compelling case can be made for considering setting a lower tariff, then we will consider what different approach may be appropriate. This would be in order to ensure that the fees imposed on them are justifiable and proportionate whilst still ensuring that the aggregate amount of fees levied represents an appropriate contribution to the estimated likely costs of regulation for 2010/2011 in accordance with our statutory duties. If such a case is made, it may necessitate a further short consultation to determine the relevant eligibility criteria and what level of fee is appropriate for providers in their situation.