Ofcom publishes guidelines on penalties under the Communications Act 2003 and on dispute resolution

Ofcom has published two guidance documents - new guidelines that it will apply when handling regulatory disputes (the Dispute Resolution Guidelines) and updated guidelines for imposing penalties under the Communications Act 2003 (the Penalty Guidelines):

- The Dispute Resolution Guidelines

On 7 June 2011, Ofcom published the Dispute Resolution Guidelines which take into account amendments to Ofcom’s dispute resolution powers, as a result of the implementation of revisions to the European Framework on Electronic Communications.

For the most part, the guidelines are the same as the version that Ofcom issued for consultation in December 2010. More specifically, they set out, for example, the conditions that need to be in place before Ofcom will consider disputes together, the procedure for seeking opinions of the parties to the relevant dispute, and what happens if Ofcom believes that the criteria for joining an existing dispute have not been met.  

The changes that result from the European Framework on Electronic Communications, and upon which guidance has been given, include the introduction of a discretionary power for Ofcom to intervene in network access disputes rather than a duty to intervene, an expansion of the group of persons able to refer certain disputes to Ofcom and a discretionary power to recover the costs of the dispute resolution process (Ofcom is to provide additional direction for the selection of disputes in which it may try to recover the costs of the process - including the method of calculating such costs).

- The Penalty Guidelines

The Penalty Guidelines, published on 13 June 2011, are applicable to all regulatory penalties that Ofcom may impose on any body that it regulates (other than penalties imposed under Ofcom’s Competition Act 1998 concurrent powers).

The Penalty Guidelines outline that Ofcom must consider all the circumstances of the case “in the round” to determine an appropriate and proportionate financial penalty, with the “central objective” of imposing a financial penalty being deterrence. The Penalty Guidelines also indicate that the amount of any financial penalty must be sufficient to ensure that it will act as an effective incentive to compliance, having regard to the seriousness of the infringement and that Ofcom may increase the penalty where the regulated body in breach has not cooperated fully with its investigation.