Explanatory Note

(This note is not part of the Order)

Section 97 of the Communications Act 2003 (c. 21) (“the 2003 Act”) makes provision for the calculation of the amount of a penalty under section 96 or 96A of that Act. The amount of such a penalty is to be determined by reference to a person’s turnover. Section 97(3)(a) enables the Secretary of State to make rules setting out how a person’s turnover is to be calculated.

Those rules are currently set out in the Electronic Communications (Networks and Services) (Penalties) (Rules for Calculation of Turnover) Order 2003 (S.I. 2003/2712) (“the 2003 Order”).

Section 105Z18 of the 2003 Act (which was inserted by the Telecommunications (Security) Act 2021 (c. 31)) (“the 2021 Act”) makes provision for the imposition of penalties on certain public communications providers who do not comply with a designated vendor direction or a compliance plan relating to such a direction. Section 105Z19 of the 2003 Act makes provision for the calculation of the amount of such a penalty, which may, in the case of the contravention of a designated vendor direction, be up to 10% of the provider’s turnover. Section 105Z19 of the 2003 Act provides for turnover for the purposes of that section to be determined by reference to any rules made under section 97(3)(a) of the 2003 Act, and also for provision to be made about the business in relation to which that turnover is calculated.

This Order provides for all of the relevant business activities as set out in section 105Z19(8) of the 2003 Act to be included in the turnover calculation for a provider (article 2).

In consequence of the provisions made by the 2021 Act, the Order also amends the 2003 Order to replace references in that Order to a “notified provider” or a “provider” with references to a “person” (article 3).