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Well-behaved comms industry bad for Ofcom coffers

Luckily, it's not about revenue

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UK regulator Ofcom isn't making as much money as it used to, thanks to the lack of radio auctions and irritatingly-law-abiding broadcasters.

In the 12 months leading to the end of March Ofcom contributed £192.7m to the public purse, according to its reported accounts (pdf). Most of the money comes from radio-spectrum licences, but there's also the regulator's cut of broadcaster's advertising revenue, and fines levied on those failing to live up to Ofcom's standard.

Those fines only brought in around £400,000 from March '09 to March 10, a mere five per cent of the £8m raised through fines during the 2008/9 year. But 2008/9 was the year the premium rate scandals came out: broadcasters taking revenue for telephone votes cast during repeats, discarding late-cast votes and simply ignoring votes cast during busy periods – all of which resulted in £8m in fines passing through Ofcom to the public purse.

This year the fines haven't been so profitable, and the drop in TV advertising has hit licence income too. Commercial broadcasters have to pay Ofcom an annual fee based on a basic rate plus a percentage of advertising revenue – the combination of which brought in £26.5m this year, compared to £35.4m.

But it's licensing radio spectrum that earns the real money – though even that was down to £165.9m compared to £182.9m last year. What's worse is that just over £50m of that came from the UK government, parts of which now have to pay for their spectrum like everyone else.

Thanks to the ongoing disputes about refarming of radio spectrum, not to mention the small matter of a general election, there weren't any spectrum auctions this year – though if things go to schedule that should change next year with the planned mega-auction bringing in some serious dosh.

Not that Ofcom is about raising money, as the organisation is keen to stress. Ofcom is tasked with ensuring efficient use of radio spectrum, and follows the prevailing mantra that he who pays most has greatest incentive to ensure the greatest efficiency of use. ®

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