Clause 214: Licensing of the public teletext service

457.     The public teletext service is to be licensed under Part 1 of the Broadcasting Act 1990, subject to the restrictions and conditions set out in this clause. For example, subsection (6) specifies that OFCOM must include in the public teletext service licence a condition prohibiting the imposition of charges for the reception of the licensed service in the United Kingdom.

458.     Schedule 10 specifies the procedure with which OFCOM must comply when it seeks to award a licence to provide the public teletext service and the conditions to be included in the licence. It also gives OFCOM powers to enforce the conditions included in the public teletext service licence.

459.     When OFCOM proposes to award a licence to provide a public teletext service, they must publish (along with general guidance) a notice that sets out the information listed in paragraph 1(2). OFCOM must include the additional information listed in paragraph 1(3) if the teletext service must be provided in analogue form.

460.     Any application made in response to a notice published by OFCOM must be accompanied by the appropriate fee and must also include the information listed in paragraph 3(1). OFCOM may require the applicant to provide further information once they have received the application. Following the closing date for applications, OFCOM must then publish the name of each applicant along with certain details of each application as described in paragraph 4(1). OFCOM must also invite the public to make representations.

461.     Before OFCOM may consider whether to award a public teletext service licence to an applicant, they must find that: (1) the applicant's technical plan and its proposals relating to the fulfilment of the public service remit for the public teletext service, the inclusion of news items, their update and revision and the inclusion of material of interest to different communities in the United Kingdom are acceptable to them; and (2) the provision of the proposed services can be maintained during the licence term. OFCOM must then award the licence in accordance with sections 17 and 17A of the Broadcasting Act 1990 (as modified by this Schedule).

462.     Paragraph 6 permits OFCOM to revoke and re-award a public teletext service licence when the licensee indicates that he does not intend to provide the service or OFCOM have reasonable grounds to believe that the licensee will not provide the service. OFCOM must notify a licensee of their intention to revoke a licence. Before revoking a licence, OFCOM must serve a notice on the licensee and offer him a reasonable opportunity to submit representations.

463.     Paragraph 7 requires OFCOM to include in a public teletext service licence conditions requiring payment of the following determined in accordance with Schedule 10 during the licence term: an annual fee, increased by an appropriate percentage, and a specified percentage of the qualifying revenue for each accounting period of the licensee falling within the licence term. Payments required under these conditions are in addition to those required by OFCOM under section 4(1)(b) of the Broadcasting Act 1990.

*Appropriate percentage has the same meaning as in section 19 of the Broadcasting Act 1990 (i.e. it takes account of inflation).

464.     OFCOM may also include conditions permitting them to estimate the amount of payments due by the licence holder during an accounting period and requiring him to make monthly interim payments. Conditions permitting OFCOM to revise their estimate and the monthly interim payments made by the licence holder and to make adjustments for any over- or under payment made may also be included.

465.     Paragraph 8 provides that section 40 of the Broadcasting Act 1990 (power to direct correction or statement of findings) has effect in relation to the public teletext service.

466.      Paragraphs 9 and 10 confer on OFCOM the power to enforce the conditions included in the public teletext service licence. Where OFCOM are satisfied that a licence holder has contravened a condition of the licence or has failed to comply with a direction given by OFCOM under the Broadcasting Acts 1990 or 1996 or Part 3 of the Bill, they may impose a penalty and/or reduce the term of the licence by up to two years. Licences may also be revoked for contraventions of licence conditions or directions. Where OFCOM do not revoke the licence they may fine the offender up to 5 per cent of the qualifying revenue for its last complete accounting period.

467.     Before imposing a penalty or reducing the term of the public teletext service licence, OFCOM must notify the licence holder and provide him with a reasonable opportunity to make representations. A licence may be revoked where OFCOM are satisfied that the conduct of the licence holder justifies its revocation.

468.     Where OFCOM decide to revoke a public teletext service licence, they must also notify the former licence holder of the penalty that he must pay. A maximum fine (whichever is the greater) of either £500,000 or 7 per cent of either the estimated or actual qualifying revenue may be imposed.

Clause 215: Delegation of provision of public teletext service

469.     A licence for the provision of the public teletext service may enable the licence holder to subcontract the provision of all or part of the service to a third party, subject to and in accordance with the requirements of conditions set by OFCOM. Contravention by the relevant third party of a condition imposed under this clause will be treated for the purposes of Chapter 2 of Part 3 and the Broadcasting Act 1990 as a contravention by the licensee.

Clause 216: Replacement of existing public teletext provider's licence

470.     As soon as practicable after the television transfer date OFCOM must offer the person who holds the existing licence to provide the public teletext service at the time that the offer is made the opportunity to exchange that licence for a replacement licence. The replacement licence must provide for a service that is equivalent in all material respects both to the existing service and to the digital service that the licensee is required to provide under section 30 of the Broadcasting Act 1996. The replacement licence must be awarded in accordance with clause 214 (with the exception of Part 1 of Schedule 10) and Part 1 of the Broadcasting Act 1990.

471.     The offer of the replacement licence must specify each of the following as determined by OFCOM: the conditions on which they propose to grant the replacement licence, the timeframe of their offer, the date on which the licence will be granted if the offer is accepted, the time from which the licence will take effect if the offer is accepted (which must fall within the period of twelve months after the television transfer date), and the time from which the licence will cease to have effect of the offer is rejected. The financial terms of the offer must propose that the licensee will pay the same annual amount and percentage of qualifying revenue as would have been payable under the existing licence had it continued in force until the end of the period for which the replacement is granted. A licence holder refusing this offer will have his existing licence revoked on a date specified by OFCOM in the offer. This date must fall no later than eighteen months after the closing date for agreeing the offer.

Clause 217: Renewal of public teletext licence

472.     This clause permits the holder of the licence to provide the public teletext service to apply to OFCOM for the renewal of his licence for the next licensing period.

* Subsection (12) provides that a licensing period is the period beginning with the commencement of this clause and ending with 31 December 2014; or any subsequent period of 10 years beginning with the end of the previous licensing period.

473.     An application for renewal may only be made in the period beginning four years before the end of the current licensing period and ending three months before the day that OFCOM determine they would have to publish a tender notice if they were proposing to grant a fresh licence to take effect from the end of the current licensing period. Any determination of that date must be made at least one year before the date on which the tender notice would have to be published and must be notified, at the time that the determination is made, to the person who is then holding the public teletext licence.

474.     Unless the Secretary of State makes an order suspending the rights of renewal under clause 224, where OFCOM receive an application for the renewal of a licence, they must determine whether or not they will renew the licence and the financial terms on which the licence will be renewed (if they will renew the licence). They must also notify the applicant accordingly. Subsections (6) and (7) provide that OFCOM may determine that they will not renew a licence if:

• they are not satisfied that the applicant (if his licence were renewed) would provide a service complying with the requirements imposed under Chapter 4 of Part 3 of the Bill relating to the public service remit for the public teletext service, news programmes and regional matters; or

• they propose to grant a fresh licence for a service replacing the licensed service which would differ from the licensed service in the areas where it would be provided or the times of the day, or days of the week, between or on which it would be provided.

475.     OFCOM must not grant a renewal under this clause more than 18 months before the end of the current licensing period.

476.     Where OFCOM determine that a licence should be renewed, they must renew it on the same terms and subject to the same conditions with such modifications required to give effect to the requirements imposed under paragraph 7 of Schedule 10.

Clause 218: Financial terms of licence renewed under s. 217

477.     Any offer made by OFCOM to renew an existing licence under clause 217 must include a determination of the fee that the licensee is required to pay during the first complete calendar year of the renewal period and the percentage of qualifying revenue to be paid for each accounting period of the applicant falling within the relevant renewal period. The fee for the first year of the replacement licence must approximate to what OFCOM estimate would have been the highest cash bid of the licensee had the licence been awarded under Part 1 of Schedule 10. When determining the percentage of qualifying revenue, OFCOM may set different percentages (including nil percentages) for different accounting periods.

Clause 219: Application for review of financial terms of replacement licences

478.     The holder of a licence granted under clause 210 or 216 may apply for a review of the financial terms of this licence, on one or two different occasions. The first one may happen at any time during the first review period, i.e. the period starting four years before the date the licence that has been replaced was due to expire and ending on a date fixed by OFCOM. The second one may happen at any point during such of the second review period as falls before 1 January 2014. How the second review period is measured depends on whether an application was made during the first review period. If such an application was made, the second period is that starting four years before the tenth anniversary of the date on which OFCOM notified the licensee of the determination of the first application and ending on a date fixed by OFCOM. Where no application was made during the first period, the second review period is that starting four years before the tenth anniversary of the date on which the licence that has been replaced was due to expire and ending on a date fixed by OFCOM.

479.     No such application may be made when an application for a review under clause 220 is pending or less than twelve months after a determination of new financial terms have been made by OFCOM under clause 220.

Clause 220: Application for review of financial terms in consequence of new obligations

480.     This clause applies where an order brings into force any of clauses 264, 265, or 266 (must-offer on networks and satellites and must-provide). If an order imposes new conditions in the licences of a Channel 3 service or a Channel 5 or of the public teletext service, the holder of the licence may apply for a review of the financial terms of his licence.

Clause 221: Reviews under ss. 219 and 220

481.     A determination made by OFCOM under this section must include the fee to be paid for the first calendar year of the period under review, which must approximate the highest cash amount that would have been bided for if the licence were awarded under section 15 of the Broadcasting Act 1990 and the percentage of qualifying revenue to be used for each accounting period.

482.     When determining these new financial terms, OFCOM must have regard to any additional costs that are likely to be incurred by the licence holder as a consequence of the new conditions imposed following the orders made under clauses 264, 265 or 266.

Clause 222: Giving effect to reviews under ss. 219 and 220

483.     This clause provides that, as soon as reasonably practicable, after making a determination, under clause 221, OFCOM must send to the applicant a notification setting out this determination, the modifications required in the applicant's licence, a response date by which the applicant has to notify his acceptance to OFCOM, and an end date by which the licence will cease to have effect if he does not.

484.     Subsection (5) provides that the new licence conditions are to have effect when the applicant notifies OFCOM that he accepts the determination. If the applicant does not notify his acceptance before the response date set by OFCOM, his licence will cease to have effect on the end date set by OFCOM.

Clause 223: Review in anticipation of new licensing round

485.     This clause gives a duty to OFCOM, no later than 30 months before the end of each licensing period, to report to the Secretary of State on the effects of the conditions which would be included in the renewed licences, on the capacity of the holders of Channel 3, 5 and public teletext service licences to the fulfilment of the public service remit at a cost that is commercially sustainable for them.

486.     Under subsection (4), OFCOM will also include the recommendations if any that they consider appropriate to make as to the use by the Secretary of State of his powers under clause 224 or under Chapter 4 of Part 3 of this Bill.

Clause 224: Orders suspending rights of renewal

487.     This clause applies when the Secretary of State receives a report made by OFCOM under clause 223. If the report contains a recommendation to make an order under this section or in the absence of a recommendation, where the Secretary of State believes it is appropriate to do so, she may by order provide that some licences are not to be renewed under clause 211 or 217 from the end of the current licensing period.

488.     Subsection (3) provides that such an order must be made eighteen months at least before the end of the current licensing period. Under subsection (4), an order with respect to Channel 3 licences must apply either to all licences to provide a Channel 3 service, or to all licences to provide a national Channel 3 service, or to all the licences to provide a regional Channel 3 service. Any order made by the Secretary of State will be subject to the affirmative resolution procedure.

Clause 225: Replacement of Channel 4 licence

489.     When subsection (1) comes into force, Channel 4 shall be granted a new licence under this clause. Its licence granted under the Broadcasting Act 1990 shall no longer apply. In advance of this, OFCOM must prepare a draft replacement licence and consult the Channel 4 Corporation on its contents. The replacement licence must provide for the service being broadcast digitally and may provide that the service is also provided in analogue form until such time as is determined according to conditions in the licence giving effect to the Secretary of State's directions as to how long the service must continue to be provided in analogue form. The programming of the digital service should replicate that of the analogue service. There can be no charge levied for the use of such a service or for any programming assistance for the disabled or other ancillary services included in the service.

490.     Subsection (6) provides that such a replacement licence must continue in force until the end of 2014. The licence may be renewed as OFCOM think fit.

Clause 226: Meaning of "television licensable content service"

491.     A "television licensable content service" is defined in this clause as any service which is provided (whether in digital or analogue form) primarily as a service to be made available "for reception by members of the public"(this concept is defined in clause 347), consists of television programmes and/or electronic programme guides (or both) and is broadcast from a satellite, or is distributed by an electronic communications network to places in the EEA States.

*an electronic programme guide is defined in subsection (3) as a service which lists and/or promotes television programmes, including programmes of providers other than the provider of the guide. The service must also allow the user to access programmes contained in the guide.

Clause 227: Services that are not television licensable content services

492.     This clause sets out the services that are to be excluded from the definition of a television licensable content service in clause 226. A service is not a television content service licence if it is broadcast by means of a television multiplex service or to the extent that it consists of a service which is authorised by a licence to provide a television broadcasting service, the licence to provide the public teletext service or a licence to provide additional television services. Nor does it meet the description of a television licensable content service if it forms part only of a service provided by means of an electronic communications service that does not consist wholly or mainly in making available television and/or radio programmes for reception by the public. A service is also excluded if it is a two-way service (as defined in subsection (5)) provided by means of an electronic communications network. The aim of these provisions is, broadly, to maintain licensing obligations in respect of services which are or equate to broadcasting, while excluding Internet services such as web sites or web-casting, from OFCOM's regulatory powers. Subsection (6) also excludes a service that is distributed to a single set of premises by an electronic communications network that is contained within the premises and is not connected to any external network. Subsection (8) excludes a service that is provided for the purpose only of being received by persons who have an interest in receiving the service for use in their business or employment, such as stockbrokers or bookmakers.

Clause 228: Modification of ss. 226 and 227

493.     The Secretary of State may modify clauses 226 (and clause 347 insofar as it applies to clause 226) or 227 by order, if she considers it appropriate. In making any modification, she must take into account the level of protection expected by the public as regards the content of television programmes and text services, taking into account the means of reception; the ability of the public - having been made aware of the contents of a forthcoming programme - to control what they watch; technical innovation; the financial consequences of modification; and the relative ease or difficulty of setting different levels of regulation for different services.

Clause 229: Licensing of television licensable content services

494.     A television licensable content service shall be licensable under section 13 of the Broadcasting Act 1990 according to an application procedure that is set by OFCOM. OFCOM must approve the application unless they are not satisfied that the applicant is a fit and proper person to hold a licence, or if the person is disqualified from holding a licence by virtue of Part II of Schedule 2 of the Broadcasting Act 1990. OFCOM is entitled to refuse an application if satisfied that the service would be unlikely to comply with OFCOM's standards code or the code on fairness issued under Part 5 of the Broadcasting Act 1996.

495.     Subsection (4) provides that a provider must seek a separate licence for every television licensable content service he proposes to offer. In other words, if a provider is intending to offer three television licensable content services he must have three licences, one for each service. A single licence may authorise different programmes to be broadcast simultaneously, or virtually so, on different frequencies.

496.     Each licence for a television licensable content service shall be valid until surrendered or revoked.

Clause 230: Direction to licensee to take remedial action

497.     If the provider has breached a condition of his television licensable content service licence then, if this will sufficiently remedy the breach, OFCOM may, after giving him a chance to comment, require the licence holder to include a correction in the licensed service or broadcast a finding by OFCOM against the licence holder. The licence holder may announce that he is making a correction or a statement of findings because OFCOM have directed him to do so. OFCOM must send a copy of any direction given to a BBC company requiring the broadcasting of a correction and/or statement of findings and any representations received from that BBC company to the Secretary of State.

498.     OFCOM may direct a television licensable content service licence holder not to include a programme in the service on a future occasion if satisfied that the previous inclusion of that programme in the service involved a contravention of a licence condition.

Clause 231: Penalties for contravention of licence condition or direction

499.     If OFCOM are satisfied that a television content service licence holder has breached a condition of that licence, or has not complied with a direction given by OFCOM, they may serve a notice on that person imposing a fine. The maximum fine is the greater of £250,000 or 5 per cent of qualifying revenue within the relevant period. OFCOM may not impose a fine unless they have first given the licence holder the chance to comment. If OFCOM serves a notice on a BBC company, they must send a copy of that notice, and of any representations received from the company, to the Secretary of State.

*qualifying revenue shall be calculated in accordance with section 19(2) to (6) of the Broadcasting Act 1990 and Part 1 of Schedule 7 to that Act, with any necessary modifications

Clause 232: Revocation of television licensable content service licence

500.     If satisfied that a television licensable content service licence holder is in contravention of the terms of his licence, or is failing to comply with a direction, and that such a contravention or failure would, if not remedied, warrant revocation of the licence, OFCOM must serve a notice on the licence holder. The notice shall specify that OFCOM is satisfied that the criteria in subsection (1) are satisfied, the nature of the contravention or failure and that the licence will be revoked unless the licence holder takes specified steps within a specified period. If the licence holder does not comply within the specified period then OFCOM may, if satisfied that this is necessary in the public interest, revoke the licence. At each stage in the process, OFCOM shall first give the licence holder the chance to comment. The provisions in this clause do not apply to the revocation of a licence under clause 233 (see below).

501.     Subsections (4) and (5) provide that OFCOM may revoke a television licensable content service licence if satisfied that the licence holder is no longer providing the service, or that the licence holder provided false or misleading information in support of his licence application.

502.     If OFCOM serves a notice on a BBC company under this clause, they must send a copy of that notice, and of any representations received from the company, to the Secretary of State.

Clause 233: Action against licence holders who incite crime or disorder

503.     OFCOM must serve a notice under subsection (2) on a television licensable content service licence holder if satisfied that the service has included one or more programmes which contain material likely to encourage or to incite crime or disorder, that this has contravened a licence condition, and that the contravention warrants the revocation of that licence. A notice under subsection (2) shall state that OFCOM are satisfied as to the above, specify the nature of the contravention, state that the licence may be revoked at the end of 21 days beginning with the date of service of the notice, and inform the licence holder of his right to make representations. The effect of the notice shall be to suspend the licence until revocation, or until OFCOM decide not to revoke the licence. At the end of 21 days, and having considered any representations OFCOM may, if satisfied that this is necessary in the public interest, serve on the licence holder a notice of revocation. This may not take effect less than 28 days after being served.

Clause 234: Abolition of separate licences for certain television services

504.     This clause abolishes the two forms of licence which the television licensable content services licence replaces, that is satellite television service and licensable programme service licences. It puts in place transitional provisions so that after the television transfer date, any person holding one of the abolished licence types is to be regulated by OFCOM as if he held a television licensable content services licence, unless the service is of a kind that falls outside the new definition and so no longer requires a licence at all. To the extent that any existing licence takes effect as a licence to provide a television licensable content service, OFCOM must use their power under section 3 of the Broadcasting Act 1990 to modify that licence if they feel that it is necessary to do so in order to comply with their duty under clause 255 (see below).