APPENDIX 53
Memorandum submitted by ICSTIS
PRIVACY AND MEDIA INTRUSION INQUIRY
ICSTIS is an independent industry-funded regulator
responsible for the supervision of Premium Rate Services which
now operate across all forms of communications devices ranging
from fixed telephone services, mobile text services, certain Internet
services and more recently some of the interactive elements of
some TV services such as some found on the Sky Platform, for example.
Premium rate charging is estimated to generate £1 billion
in revenues in 2003 in the UK making it the largest such market
in the world for this form of content purchasing using such devices.
Our co-regulatory model for supervising this
diverse sector is quite unique. I attach to this letter a summary
of the model and its key components. What will be seen is that
it combines the best elements of both self and statutory regulation
in the following ways:
— ICSTIS is industry-funded and is
universally supported by all UK telecoms operators. A Condition
in network licences issues by the DTI underpins this. With the
passing of the Communications Act this arrangement will alter
slightly which is why we appear on the face of that Bill in Clauses
116-120.
— There is clear input from all stakeholders
when determining our Code of Practice and we consult widely before
agreeing it. It is then approved by the Director General of Oftel—soon
to be Ofcom.
— ICSTIS' committee members are independent
of the sector they regulate and it is a condition of appointment
that they must have no direct interests in it. This is notwithstanding
the industry funding underpinning it.
— ICSTIS has "teeth" in terms
of its ability to apply sanctions to providers of services who
breach the Code of Practice. This can range from a warning, through
to a fine (the highest so far being £100,000 but there currently
no upper limit), or a complete bar of the services in question.
— Like statutory bodies, ICSTIS is
a public body subject to Judicial Review and has in place independent
appeals mechanisms to ensure complete compliance with the Human
Rights Act, specifically Article Six provisions in relation to
the right to a fair and impartial tribunal hearing.
THE ICSTIS REGULATORY MODEL
ICSTIS is responsible for the regulation of
premium rate information and entertainment services accessed and
paid for by a premium rate charge to a telephone bill. Today they
are also widely available on the Internet, on interactive television
and on mobile telephones and include Premium SMS. ICSTIS' regulatory
model has the following defining characteristics:
— Independence—no member of the
ICSTIS Committee can be actively involved in the industry it regulates.
— Regulatory underpinning—ICSTIS
is a co-regulator in respect of premium rate services with underpinning
by an Oftel Licence Condition on network operators requiring compliance
with a Code of Practice.
— Universal support on a contractual
basis—all network companies terminating premium rate services
(even those not subject to the requirement above) have agreed
to support ICSTIS financially and in its enforcement work.
— A structured funding mechanism—ICSTIS
funding is equitable and is based on the volume of premium rate
business conducted by each of the terminating networks who fund
the organisation.
— Published Codes and Guidelines—the
ICSTIS Code of Practice sets meaningful requirements on premium
rate service providers and spell out their entitlements under
our enforcement regime. ICSTIS undertakes meaningful and wide-ranging
consultations whenever it considers changes to its Codes of Practice,
Guidelines or other policies which may impact upon its stakeholders.
— Meaningful sanctions—ICSTIS
can, in instances of perceived widespread consumer harm, take
swift and effective action to suspend services from operating
pending further investigation. ICSTIS also has the ability to
warn, fine (fines up to £100,000 have been set in individual
cases) and bar services where necessary to give consumer protection.
Adjudications are published and made widely available.
— Research legal, media and policy
capability—ICSTIS has the resources to carry out research
and policy work, manage media enquiries and ensure that its proposals
are based in law.
— Sectoral expertise—in our case
ICSTIS has an expertise in regulating business and services offered
nationally from single and sometimes "virtual" locations:
something which Trading Standard department and others are less
familiar with and, perhaps, less comfortable in doing.
— ISO Standard—enquiry, licensing
and complaint-handling procedures—we work to an ISO Handbook
and are audited on a regular basis.
— Independent Adjudicator—ICSTIS
provides an Independent Adjudication service to members of the
public who receive high telephone bills to Live premium rate services
in situations where they claim unauthorised use of their telephone.
— Independent Appeals Body—all
ICSTIS decisions can be appealed to a separate independent body
fully compliant with Human Rights Act requirements.
— Staff investment—ICSTIS is
IIP accredited and has a motivated and enthusiastic staff.
— International regulatory connections—ICSTIS
has built a network of contacts with European and other regulators
of premium rate services. We have been instrumental in bringing
UK content regulators together to work on issues of shared interest.
7 February 2003
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