Paragraph 4 Initial costs

(1)

Qualifying entities liable to pay fees in respect of qualifying costs in either or both of the first two notification periods must pay a share of the initial costs.

(2)

OFCOM must apportion the initial costs with a view to securing, so far as practicable—

(a)

that, in the first notification period, the aggregate amounts payable to OFCOM by all qualifying entities in that period in respect of the initial costs are sufficient to meet, but do not exceed, the initial costs;

(b)

that, in the second notification period, the aggregate amounts payable to OFCOM by all qualifying entities in the first and second notification periods in respect of the initial costs are sufficient to meet, but do not exceed, the initial costs;

(c)

that the aggregate amounts payable by all qualifying copyright owners in respect of the initial costs represent 75% of the initial costs;

(d)

that the aggregate amounts payable by all qualifying internet service providers in respect of the initial costs represent 25% of the initial costs.

(3)

OFCOM must review at the start of the second notification period the amounts it has charged to qualifying entities in the first notification period in respect of the initial costs and may make refunds in respect of any overpayments, if it considers it appropriate, after taking account of the amounts it charges to qualifying entities in the second notification period.

(4)

In carrying out its functions under this paragraph, OFCOM must, so far as practicable, have regard to the following objectives—

(a)

(i)

the amount payable by each qualifying copyright owner in the first notification period represents a share of the aggregate amounts payable by all qualifying copyright owners in that period in respect of the initial costs;

(ii)

such share is based on the number of copyright infringement reports which the qualifying copyright owner estimates it will make under the Code during that period as a proportion of the total number of copyright infringement reports estimated to be made under the Code by all qualifying copyright owners during that period;

(b)

(i)

the amount payable by each qualifying copyright owner in the second notification period represents a share of the aggregate amounts payable by all qualifying copyright owners in the first and second notification periods in respect of the initial costs;

(ii)

such share is based on the number of copyright infringement reports which the qualifying copyright owner estimates it will make under the Code during the first and second notification periods as a proportion of the total number of copyright infringement reports estimated to be made under the Code by all qualifying copyright owners during those periods;

(c)

(i)

the amount payable by each qualifying internet service provider in the first notification period represents a share of the aggregate amounts payable by all qualifying internet service providers in that period in respect of the initial costs;

(ii)

such share is based on the total number of copyright infringement reports qualifying copyright owners have estimated that an internet service provider will receive under the Code during that period as a proportion of the total number of copyright infringement reports qualifying copyright owners have estimated all qualifying internet service providers will receive under the Code during that period in respect of the initial costs;

(d)

(i)

the amount payable by each qualifying internet service provider in the second notification period represents a share of the aggregate amounts payable by all qualifying internet service providers in the first and second notification periods in respect of the initial costs;

(ii)

such share is based on the number of copyright infringement reports all qualifying copyright owners have estimated that the qualifying internet service provider will receive under the Code during the first and second notification periods as a proportion of the total number of copyright infringement reports all qualifying copyright owners have estimated that all internet service providers will receive under the Code during those periods.

(5)

At the start of the first and second notification periods OFCOM must notify each qualifying entity of the amount apportioned to it and the date by which such amount must be paid.