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STATEMENT OF CHARGING PRINCIPLES PUBLISHED BY THE DIRECTOR GENERAL OF TELECOMMUNICATIONS FOR THE PURPOSE OF FIXING CHARGES IN ACCORDANCE WITH SECTIONS 38 AND 39 OF THE COMMUNICATIONS ACT 2003

1.  Definitions 1.1 For the purposes of interpreting these Charging Principles the following definitions shall apply: “Act” means the Communications Act 2003; “Director” means the Director General of Telecommunications as appointed under section 1 of the Telecommunications Act 1984; “First Charging Year” means the period beginning with 25 July 2003 and ending on 31 March 2004; “Relevant Activity” means any of the following: (a) the provision of Public Electronic Communications Services to end-users; (b) the provision of Electronic Communications Networks, Electronic Communications Services and Network Access to Communications Providers; or (c) the making available of Associated Facilities to Communications Providers; “Relevant Person” means a person liable to pay the administrative charge under section 38 of the Communications Act 2003; and “Relevant Turnover”means: (a) in the First Charging Year, the Turnover made by any Relevant Person in that Person’s financial year ending in the period of 12 months ending on 24 July 2002; (b) in the Second Charging Year, the Turnover made by any Relevant Person in that Person’s financial year ending in the period of 12 months ending on 24 July 2003; or (c) in any subsequent Charging Year, the Turnover made by any Relevant Person in that Person’s financial year ending in the Charging Year immediately prior to the Charging Year before the Charging Year in question. “Second Charging Year” means the period beginning with 1 April 2004 and ending on 31 March 2005. “Turnover” means the turnover made from carrying on any Relevant Activity after the deduction of sales rebates, value added tax and other taxes directly related to turnover. 1.2 Except in so far as the context otherwise requires, words or expressions shall have the meaning assigned to them and otherwise any word or expression shall have the same meaning as it has in the Act. 2.  Charging Principles 2.1 For the purposes of section 38 of the Act in any Charging Year the Director shall fix the administrative charge to be paid by each Relevant Person in the manner set out below. 2.2 The administrative charge to be paid by each Relevant Person shall be a percentage of either: (a) the lower figure of the turnover band determined by the Director to be applicable to each such person in accordance with sub-paragraph 2.3; or (b) in any case where in accordance with sub-paragraph 2.3 no turnover band has been determined to apply to any Relevent Person, that person’s Relevant Turnover. 2.3 The Director shall determine the turnover band applicable to each Relevant Person by reference to the turnover bands in sub-paragraph 2.7 below and the amount of Relevant Turnover notified to the Director by that person, save that no such applicable turnover band shall be determined by the Director where the Relevant Person’s turnover is £1,000,000,000 or more. 2.4 The Director shall determine the percentage referred to in sub-paragraph 2.2 by carrying out the calculation described in sub-paragraph 2.5 below. 2.5 The Director shall: (a) take either the lower figure of the turnover band applicable to each person as determined in accordance with sub-paragraph 2.3, or where in accordance with sub-paragraph 2.3 no such turnover band applies, the total Relevant Turnover notified to the Director by that Relevant Person, and add all those amounts together; (b) divide the total amount of the Director’s estimated annual costs of carrying out his functions set out in section 38(5) of the Act by the sum resulting from the calculation in paragraph (a); and (c) apply the quotient resulting from the calculation in paragraph (b) as the percentage. 2.6 The maximum percentage which may be applied by the Director under sub-paragraph 2.2 shall be 0.08 per cent. 2.7 The turnover bands for the purposes of fixing the administrative charges shall be as follows:

Pounds (million)	Pounds (million)
5	To	Less than 10
10	To	Less than 25
25	To	Less than 50
50	To	Less than 75
75	To	Less than 100
100	To	Less than 150
150	To	Less than 200
200	To	Less than 300
300	To	Less than 400
400	To	Less than 500
500	To	Less than 600
600	To	Less than 750
750	To	Less than 1,000

2.8 In the First Charging Year only the Director shall make an appropriate reduction to the amount of each administrative charge payable to reflect the shorter length of that year. N Buckley, Policy Project Director