Recommendation 4

Ofcom has yet to work through the detail of how fees levied on industry will work, including how it will recover the set-up costs and cover the ongoing costs of the regime. Delays to the Online Safety Bill’s passage through parliament mean that introduction of the fee regime has been pushed back from 2025–26. Fees will begin in 2026–27, covering Ofcom’s ongoing costs, with recovery of set-up costs starting in 2027–28. Until the fee regime starts, Ofcom’s costs for online safety will be met from existing arrangements whereby costs are funded from Wireless Telegraphy Act 2006 receipts which would have otherwise gone to the Exchequer. Ofcom has yet to establish the details of how the fee regime will operate, such as the payment thresholds, fee structure and period for recovery of set-up costs. Establishing details of the regime is set to take some time and Ofcom may not recover all its set-up costs until 2032–33. In establishing the fee regime, Ofcom aims to balance competing objectives of fairness and proportionality, administrative efficiency, and recovery of costs-only. It also plans to provide transparency to industry about the annual fees. Recommendation 4: As part of its Treasury Minute response to this report, Ofcom should set out: • The modelling it plans to undertake on the fee regime; • How it will transparently report on its approach to the fee regime; and • How it will transition from the current funding regime to a self-financing model.