What is Impact Assessment – Ofcom Strategy

In the decision making process of Ofcom, Impact assessment plays an important role. It is a mechanism used by the regulator to identify and consider different options, and to select the best option, for making regulations or to seek the possibility of alternatives to formal regulations, It studies the impact of each option on the stakeholders and on the various groups, impact on competition, analyses the costs and benefits deriving from each option and also assess the expected risk involved in each option.

While making a regulation, the regulator is expected to show maximum prudence in selecting that option which is closely related to the regulator’s basic or fundamental obligation, that is to say, furthering the interest of the citizens with regard to communication matters and furthering the interest of its consumers in the market. Impact assessment provides the regulator with wide range of policy options from which the regulator could choose the best option. As such Impact assessment plays an important role in the decision- making process.

Section 4 of the Act explains the use of Impact Assessment by Ofcom. Ofcom is of the opinion that Impact Assessment has to play a very important role in policy making. Impact Assessment is closely associated with policy decisions. The stakeholders and Ofcom are given a better idea about the costs and benefits arising out of different options. This in fact helps the stakeholders to make better comments on our proposals and the regulators consultations become more fruitful.

Ofcom’s Policy Making Process and Impact Assessment

In the process of policy making, producing an Impact Assessment is the most important part. Only after studying the impact report, Ofcom will decide whether there is need for interference or to refrain from it. In case there is need for interference, in what way and to what extent it is to interfere all depends on Impact assessment.

Conducting an impact assessment is an essential part of Ofcom’s work. Whenever an issue pops up before Ofcom, the process of conducting an impact assessment develops. Impact assessment is not a process taken after the decisions are made. This measure is used for making a decision as well as for the review of existing decisions.

• First, Ofcom identifies and analyse the issue before it and then take in to consideration all the options available. The options must be in par with the statutory duties of the firm. Let us start with the option of not changing the regulatory framework. Some times there won’t be any need for any intervention, For example, sometimes there won’t be any necessity to introduce any new regulation or to change the existing regulation. This position, which calls for no intervention, is considered as the benchmark in the process of framing regulations.

• The other option may involve the necessity of removing an existing regulation. Some times the regulator is duty bound to regulate certain things. For example, if a provider has a significant market power, Ofcom may be forced to regulate the actions of that company. However in this regard the regulator will give its explanation why a policy of no intervention is not resorted to and how it sought the other means to help it fulfil its obligations.

At the very beginning of a project itself, the impact of proposed policies on disability equality, race equality, and equality in Northern Ireland etc will be taken in to account. It is the bounden duty of the regulator to promote diversity both internally and through the policy decisions. Ofcom’s decisions reflect its statutory obligations

According to the Race Relations (Amendment) Act, 2000 it was the duty of Ofcom to publish a Race Equality Scheme. In May 2005, after consultation, Ofcom published the final version of Race Equality Scheme. One of the requirements of the scheme was that Ofcom was to find out the impact of proposed policies on the promotion of race equality. Like any other public authority Ofcom need not have to assess the impact of every decision. Ofcom has to carry out an initial assessment, to find out whether their decision will have any relevance to race equality or whether their decision will have any negative impact on any one or the other racial groups, in order to decide upon the question whether Race Equality Impact Assessment is necessary or not.

If the assessment is a necessity, then Ofcom will have the authority to choose the option. The same policy will be adopted by Ofcom, with regard to the statutory equality scheme and the final version of the scheme is expected to be published in 2005/06. Again Ofcom is required to produce a Disability Equality Scheme which includes a Disability Impact Assessment also by the end of 2006. Ofcom wants this Impact Assessment procedure to start from the very beginning.

Bearing in mind the issue to be addressed, the process of producing an Impact Assessment is to be started. The objective of the policy is also to be taken care of while identifying the wide range of options. The wide range of options enables the regulator to have a chance to explore all the possibilities and helps the regulator to compare and contrast the benefits and costs of each option.

At this stage, a list of the groups of stakeholders who are going to be affected should also be prepared.

What all information is needed for the development of Impact Assessment will be collected from the stakeholders unofficially.
• Sometimes additional options are to be considered or the existing options are to be revised. Anyway before consultation stage, a detailed analysis will be produced. Usually, by this time Impact Assessment will identify the most preferred option.
• Ofcom will examine their initial assessment of potential options which includes the data regarding the affected stakeholders. All these possible options cannot be examined in detail.
• During consultation Ofcom will collect comments and other information needed for the completion of the assessment from the stakeholders. The participation of the stakeholders throughout the process is very important since they possess the information regarding the determination of costs and benefits.
After testing the feasible options, the best option is selected.

Impact Assessment considers the impact of Ofcom’s policies on different sectors, groups of stakeholders, consumers, citizens etc and every step taken is transparent, giving no room for complaint. It is the fundamental duty of the regulator to identify the impact of policies on consumers, citizens and particular groups of citizens. As per Section 75 of the Northern Ireland Act 1998, Ofcom has to review its policies if they have any significant impact over the nine groups in society in Northern Ireland concerning the equality of opportunity.

These nine groups are different in all respects. Ofcom has already submitted a draft Equality Scheme to the Equality Commission in Northern Ireland specifying seven important policy areas. The work on primary assessment of policies will be undertaken before the publishing of Ofcom’s annual plan. On scrutiny of the policies, if significant impact on equality is found, then Ofcom has to conduct an equality impact assessment. The new policies are to be screened for equality it has to consider the impact of policies on the interests of citizens, consumers, consumers in the rural areas, poor consumers, disabled consumers and consumers who are aged.

Another stage in the policy making is that after consultation, Ofcom usually publish a policy statement or decision along with a separate document explaining the procedure adopted by Ofcom. A summary of the analysis of the earlier impact assessment, the responses to the comments about the assessment, the effect of comments on the impact assessment and the reason for choosing the option etc. will be explained in the document. After the consultation stage, if there is no need for a change, the Impact assessment procedure will be proceeded with. At a later stage, the impact of the option will be reviewed to make sure that the policy objective is achieved.