Communications Bill: implementation of PRS Gavin Daykin 15 May 2003

Premium Rate Services Services offering information and entertainment via telephone, fax, PC, mobile or interactive TV; Paid for via the telephone bill; Vary in cost, typically between 10 pence per call and £1.50 per minute; Revenue-sharing.

Oftel’s objectives Thriving, innovative premium rate sector; Adequate protection for consumers; Scope and level of regulation is the minimum necessary to obtain appropriate outcomes.

Need for consumer protection High cost calls - running up bills quickly; Unauthorised use of the service; Access to content; Potential abuse by service providers.

Current regulatory regime Self- and co-regulatory approach, with primary role of consumer protection falling to ICSTIS; Oftel provides statutory support - essentially backstop powers underpinning the ICSTIS regime for all services that meet the definition of CPRS; Oftel’s powers only relate to telecoms companies (i.e. licensees); ICSTIS regulates service providers through its code of practice.

The new regulatory framework (i) Telecoms licensing regime will disappear and providers of ECN/ECS will no longer be required to obtain a licence before operating a system or providing a service; The basis for the current PRS regulatory regime will therefore be removed, and a new basis will be required to enable the effective co-regulation of PRS in the UK to continue.

The new regulatory framework (ii) PRS to be regulated through provisions in the Communications Bill (cl ) –excluded from the definition of ECS and therefore cannot be directly regulated by way of general conditions; –These provisions provide Ofcom with the power to set conditions for the purpose of regulating the “provision, content, promotion and marketing” of PRS.

Conditions regulating PRS (i) Conditions can only require compliance with directions given in accordance with: –an approved code by the enforcement authority and for the purpose of enforcing its provisions; –if there is no such code, the provisions of the order made by Ofcom Conditions to be applied either: –generally to every person who provides a PRS; –to every person who is of a specified description of such persons, or who provides a specified description of such services.

Conditions regulating PRS (ii) Oftel will shortly consult on these conditions - the proposal will be that the conditions should only be applied to: –providers of Electronic Communications Networks and Services; –Controlled Premium Rate Services. Comments sought during consultation on: –the terms of the specified conditions; –the specified description of such persons or services upon which conditions will be imposed;

Implications of new regime How the regime should work: –the condition imposed by Ofcom is to comply with a direction by the co-regulatory body; –the co-regulatory body supervises PRS through provisions and enforcement measures contained in an approved code; –where the co-regulatory body fails to secure compliance, it will direct the provider of the ECN/ECS to cease provision of the service/withhold funds, etc... –If this direction is breached so is the condition imposed by Ofcom.

And finally….. Any questions?