Select Committee on Culture, Media and Sport Written Evidence


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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