Proposed modification of the Network Innovation Competition licence – The Funding Return Mechanism

Publication date
1st March 2016
Closing date
29th March 2016
Policy areas

Every year, the Network Innovation Competition (NIC) encourages network licensees to innovate in the design, development, and operation of their networks and to engage with third parties in doing so. The NIC funds a number of large-scale innovation projects. Projects involve new technologies, and the implementation of new operational processes and commercial arrangements.

We have recently launched a review to examine the NIC governance arrangements and whether the process of awarding funding could be improved. Our consultation is separate from this review. We focuss on clarifying existing policy in the drafting of both the NIC licence conditions and of the NIC governance documents.

The Funding Return Mechanism set out in Part C of the NIC licence condition is the method by which the Authority can direct money to be returned to customers. We propose to allow money to be returned to customers, and potentially to other project parties, by adding a new category called ‘Returned Project Revenues’ to the Funding Return Mechanism.

This new category will allow money to be returned to customers where the project was delivered more efficiently than expected, or where a project has produced revenue by methods other than through Intellectual Property Rights. It will also allow money to be kept by other project parties where this is appropriate e.g. a proportion of the money could be returned to the Funding Licensee where it has made a financial contribution to the relevant project.

Next Steps

Subject to responses to this consultation, we plan to issue a statutory consultation on the proposed NIC licence changes, with the aim that the licence changes are implemented by Summer 2016. If we make the proposed modifications to the NIC licence conditions, changes to gas and electricity NIC Governance Documents will also be required and we would make these changes as soon as reasonably practical, once any change to the licence has been made.

The deadline for responses is 28 March 2016.