Memorandum submitted by Ofcom/ICSTIS
EXECUTIVE SUMMARY
— This is a joint submission by the
Office of Communications ("Ofcom") and the Independent
Committee for the Supervision of Standards of Telephone Information
Services (ICSTIS) to the Culture Media and Sport Committee's inquiry
into Call TV quiz shows. The scope of the Culture Media and Sport
Committee inquiry into Call TV quiz shows and, in particular,
the issues for consumers that arise from these, directly touches
upon the regulatory remit of both Ofcom and ICSTIS and fits into
the regulatory reviews that both organisations have launched,
or intend to launch, over the coming months.
— The two regulators have worked and
continue to work closely together in numerous areas, including
Call TV quiz shows, and both welcome the inquiry. The recent growth
and consolidation of Call TV quiz shows on UK television, the
associated concern of viewers—as evidenced in complaints
to both regulators—and the full implementation of the Gambling
Act 2005 in the third quarter of 2007 provide a sound basis upon
which to consider the various issues the Committee raises.
— Both regulators recognise that there
are various reasons for the increasing public awareness of, and
interest in, Call TV quiz shows, and this has helped inform their
activities in this area. As broadcasters increasingly seek alternative
revenue streams and turn to content based on premium rate services
(not only quizzes), regulators must ensure that consumers are
appropriately protected.
— There also remains a public perception
problem regarding the way in which Call TV quiz shows operate,
in terms of, for example, the methodologies used and the operation
of the phone lines.
— Ofcom and ICSTIS are determined to
set a standard for Call TV quiz shows which, whilst acknowledging
that this emerging type of programming is obviously popular with
audiences, provides adequate protection for all consumers, including
those who are not familiar with the genre.
— To this end, both regulators have
already taken significant action and keep their regulation of
Call TV quiz shows under review. Since the advent of such services,
Ofcom and ICSTIS have worked closely together to ensure that they
minimize confusion when telling consumers who to complain to,
as well as maximizing their enforcement efforts and certainty
for broadcasters and premium rate service providers about regulatory
requirements and compliance.
— Ofcom and ICSTIS produced detailed
new rules and guidance in 2006 as a result of viewer concern,
the regulators' own monitoring and the rise in the number of Call
TV quiz shows on television platforms. These new rules and guidance
were aimed at ensuring best practice in the industry and providing
appropriate consumer protection. As a result of Ofcom guidance
and ICSTIS' rules, there were significant changes in the way Call
TV quiz shows operated and the way they broadcast—with increased
transparency for the viewer.
— As a consequence of these rules and
guidance the following has been achieved, for example:
— greater on-screen and on-air clarity
in pricing;
— greater clarity of call costs when
consumer participate;
— clearer information about the fact
that consumers pay for calls whether or not they get through;
— rules concerning the use of clocks
and countdown triggers to ensure viewers are not mislead;
— greater prominence of free routes
to entry; and
— protections to ensure that prizes
are not presented as solutions to financial hardship.
— Nevertheless, neither regulator is
complacent. Both Ofcom and ICSTIS are keeping this area under
review and are planning separate consultations (on different aspects
of the industry) to ensure that consumers are adequately protected
and standards are maintained. Further regulation will be adopted
in the area of Call TV quiz services if it becomes necessary.
INTRODUCTION: THE
REGULATORS
1. This is a joint response from the Office
of Communications ("Ofcom") and the Independent Committee
for the Supervision of Standards of Telephone Information Services
("ICSTIS") to House of Common's Culture, Media and Sports
Select Committee's inquiry into Call TV quiz shows. Currently,
Ofcom and ICSTIS together regulate these services on a day-to-day
basis. Ofcom's responsibility for these services is through its
remit as a broadcast content regulator while ICSTIS' responsibility
is as the regulator for premium rate telephony. Both Ofcom and
ICSTIS are public bodies and have adjudication and governance
arrangements that are robustly independent and prepared in light
of the Human Rights Act 1998.
2. Ofcom is the independent regulator and
competition authority for the UK communications industries, with
responsibilities across television, radio, telecommunications
and wireless communications services. Ofcom's statutory duties
and powers are defined within the Communications Act 2003. The
Ofcom Board, which consists of both executive and non-executive
members, provides the strategic direction for Ofcom, while the
regulation of broadcast content (including quality and standards)
is the main function of Ofcom's Content Board (a committee of
the Main Board).
3. ICSTIS regulates premium rate services
as defined in the Communications Act 2003. ICSTIS consists of
12 part-time Committee members, supported by a full time Secretariat.
The great majority—nine members of the Board—are independent
of the sector from which its funding is provided. The ICSTIS Code
of Practice is approved formally by Ofcom (under Section 120 of
the Communications Act 2003).
4. All broadcasters who hold an Ofcom licence
must comply with Ofcom's codes, including the Broadcasting Code,
which sets editorial standards for broadcast content. However,
all Call TV quiz shows involve viewer participation by premium
rate telephony. The regulation of the premium rate phone lines
rests with ICSTIS.
5. Given their respective regulatory remits,
Ofcom and ICSTIS have worked closely together on Call TV quiz
shows. This has ensured that there is minimal confusion for complainants
as well as maximising the regulators' enforcement efforts. This
approach has given certainty for broadcasters and premium rate
service providers about regulatory requirements and compliance.
6. Ofcom and ICSTIS investigate complaints
and may initiate their own investigations, as appropriate. Ofcom
has a range of sanctions it may impose against broadcasters found
in serious breach of the Broadcasting Code. These include a direction
to broadcast a summary of Ofcom's adjudication, a financial penalty
and, in the most serious of cases, the revocation of a licence.
ICSTIS has the power to fine premium rate service providers up
to £250,000 and bar access to individual services.
7. The Gambling Commission (the regulatory
body for all commercial gambling in Great Britain with the exception
of spread betting and the National Lottery) also has an interest
in Call TV quiz shows. Under the Gambling Act 2005 it must determine
whether or not they constitute complex lotteries. If Call TV quiz
shows are defined as lotteries, they will require a Gambling Commission
licence to operate and would have to abide by its licence conditions
(see submission by the Gambling Commission).
8. There are therefore three regulators
involved in the regulation of quiz shows:
— Ofcom—the regulation
of the editorial broadcast content—the on-air conduct of
the competitions;
— ICSTIS—the regulation
of the promotion and operation of the premium rate services;
— Gambling Commission—if
Call TV quiz shows are defined under the Gambling Act 2005 as
lotteries and should therefore be regulated as gambling.
REGULATORY PRINCIPLES
9. In undertaking their regulatory responsibilities
including Call TV quiz shows, Ofcom and ICSTIS maintain a commitment
to the principles of good regulatory practice.
10. Ofcom's regulatory principles are:
— Ofcom will regulate with a clearly
articulated and publicly reviewed annual plan, with stated policy
objectives.
— Ofcom will intervene where there
is a specific statutory duty to work towards a public policy goal
which markets alone cannot achieve.
— Ofcom will operate with a bias against
intervention, but with a willingness to intervene firmly, promptly
and effectively where required.
— Ofcom will strive to ensure its interventions
will be evidence-based, proportionate, consistent, accountable
and transparent in both deliberation and outcome.
— Ofcom will always seek the least
intrusive regulatory mechanisms to achieve its policy objectives.
— Ofcom will research markets constantly
and will aim to remain at the forefront of technological understanding.
— Ofcom will consult widely with all
relevant stakeholders and assess the impact of regulatory action
before imposing regulation upon a market.
11. The regulatory principles followed by
ICSTIS are:
— Proportionality—Regulators
should only intervene when necessary. Remedies should be appropriate
to the risks posed and costs identified and minimised.
— Accountability—Regulators must
be able to justify decisions and be subject to public scrutiny.
— Consistency—Rules and standards
must be joined up and implemented fairly.
— Transparency—Regulators should
be open and keep regulations simple and user-friendly.
— Targeting—Regulations should
be focused on the problem and minimise side effects.
12. These principles should assist in ensuring
that classic regulation does not become a default position for
managing risk and contradictory societal pressure for regulators
to be both "light touch" while, at the same time, always
being seen to have acted. This concern is addressed in further
detail in a recent report by the Better Regulation Commission.
[10]
PREMIUM RATE
SERVICES
13. Premium rate services ("PRS")
offer information and entertainment via phone, fax, PC (e-mail,
Internet, bulletin board), mobile (SMS/WAP) or interactive digital
TV. Services range from sports, voting and sex lines to competition,
directory enquiry, chat, business information services and charitable
donations. They currently vary in cost from 10 pence to £1.50
per call or minute (typically from a BT landline). The money paid
for the premium rate service is shared between the telephone company
carrying the service and the organisation providing the content.
14. Approximately 30,000 services are in
operation at any one time, generating estimated revenue of around
£1.6 billion in 2005. Precise industry data on Call TV quiz
shows is difficult to source accurately. Various industry commentators
and researchers have suggested that it may be between £120
million and £160 million per annum (see also paragraphs 22-24).
ISSUES OF
THE INQUIRY
15. Both Ofcom and ICSTIS produced detailed
new rules and guidance (see Annexes 1 and 2) early this year as
a result of viewer concern, the regulator's own monitoring and
the rise in the number of Call TV quiz shows on television platforms.
These new rules and guidance were aimed at ensuring best practice
in the industry and providing appropriate consumer protection.
As a result of Ofcom guidance and ICSTIS' rules, there were significant
changes in the way Call TV quiz shows operated and the way they
broadcast—with increased transparency for the viewer. These
rules and guidance are dealt with in detail in this document,
but a summary is provided here under the specific issues the inquiry
has raised:
— The procedure for handling calls
from viewers
Ofcom's Broadcasting Code allows the use of premium
rate services in programmes where they form part of the editorial
content of the output of the service. The way in which calls are
actually processed is regulated by ICSTIS. ICSTIS can and does
request information and data from PRS providers concerning the
procedure they use for the handling of calls to ensure that providers
are not misleading the viewer. It should also be noted that the
way calls are handled forms part of the Gambling Commission's
current consideration of whether these Call TV quiz shows are
in fact lotteries;
— Information provided to viewers
on the costs of calls and their chances of participating and winning
ICSTIS' rules require that pricing information
on screen must be both easily legible and prominent. If it scrolls
then it should not be off-screen for more than 60 seconds. Pricing
information should also be spoken by a presenter or voice-over
at regular intervals (eg at intervals of between five and 15 minutes).
Pricing information must make it clear that callers will be charged
irrespective of whether they get through or not. All consumers
should be informed at the beginning of every telephone call how
much they are being charged. The use of clocks and other countdown
triggers must not mislead viewers. It is also an ICSTIS requirement
that key terms and conditions (including an alternative free-route
entry if available) must be provided on-screen periodically. The
full terms and conditions must also be available. (See paragraphs
35-38, below);
— The role of Call TV quiz shows
in raising income for broadcasters
While neither regulator has available comprehensive
data in this area, Ofcom's most recent industry figures[11]
show TV industry revenue from all "interactive services"
(not only Call TV quiz shows) at £104 million for 2005. [12]More
specifically, ITV plc's interim results for the first half of
2006[13]
disclose a profit for ITV Play of £9 million against revenue
of £27 million, after four months of trading. (See paragraphs
22-24, below);
— The impact, financial or otherwise,
of participation on viewers
ICSTIS is able to access generic call records
data from phone companies that may assist a financial assessment
of services; other impacts are explored throughout this document,
especially in the area of complaints (see paragraphs 39-45, below).
The impact on consumers is forming part of a review currently
being conducted by ICSTIS—see below (see also paragraphs
46-49, below);
— Whether further regulation of
Call TV quiz shows is required
Ofcom and ICSTIS are keeping their regulation
of Call TV quiz shows under review. Working closely with each
other, and other authorities as appropriate, they will adopt greater
regulation in this area if it becomes necessary. In particular
both regulators are currently either conducting or about to conduct
reviews of these types of services, reflecting their own regulatory
loci. ICSTIS has undertaken further monitoring of Call TV quiz
shows with a view to assessing whether the current level of transparency
with regard to pricing and the element of chance is adequate.
ICSTIS is also examining whether the statements made by presenters
on screen about the "call to action" are accurate. The
review will be examining whether there is any evidence of excessive
use of Call TV quiz shows by consumers which may require further
regulatory controls.
Ofcom is currently preparing to consult on whether
Participation TV (which includes such services as Call TV quiz
shows) should actually be categorised (and therefore regulated)
as advertising and not editorial programme content. Services such
as Call TV quiz shows comprise of selling messages and involve
a number of financial transactions which may be more appropriately
regulated as advertising. The Advertising Standards Code (which
is regulated on a day-to-day basis by the Advertising Standards
Authority) is directed towards a greater level of consumer protection
than the Ofcom editorial Broadcasting Code and therefore may be
more appropriate in addressing the needs of consumers and viewers.
Both regulators await with interest the Culture
Media and Sport Committee's conclusions.
CALL TV QUIZ
SHOWS AND
THE VIEWING
PUBLIC
16. Viewer competitions entered by premium
rate telephony are not new. Terrestrial channels have run such
competitions for 20 years or so, essentially since premium rate
charging mechanisms were introduced.
17. For many years such viewer competitions
were typically confined to genres such as sports and magazine
programming, including breakfast television. They were generally
simply an element of programming, continuing a long tradition
of draws and competitions offered by channels and intended to
encourage viewer involvement and loyalty.
18. However, with the advent of multi-channel
television in the early 1990s, premium rate competitions and other
premium rate applications, such as viewer voting, started to become
more common in programming. Since then, digital television, which
has hugely increased the capacity for new channels, has driven
the development of new revenue models and sharpened efforts to
generate income in an increasingly competitive market where conventional
advertising-based funding models for commercial broadcasting face
increased challenges. Premium rate mechanisms have been prominent
among these.
19. Over time, therefore, what were once
occasional competitions on television have assumed a greater significance
within programming. There are now entire programmes and indeed
channels dedicated to premium rate quizzes of varying difficulty
(ie Call TV quiz shows. [14]These
services generally comprise competitions with the following features:
— a puzzle or question is set on air;
— viewers call a premium rate telephone
line in order to participate in solving the puzzle and all calls
are "connected" and therefore charged for;
— free entry via a website is usually
also possible—the degree to which this is publicised varies
but tends to be somewhat limited compared with the premium rate
route;
— the vast majority of callers do not
get an opportunity to give their answer; instead they hear a recorded
message telling them they have not been successful on this occasion;
and
— a very small proportion of callers
are randomly selected during the course of the show and put through
to the studio to give their answer. Successful contestants will
win prizes.
20. These features may alter as this form
of programming develops and the challenge for the regulators will
be to ensure that the regulatory objectives are sufficiently flexible
to deal with this format as it changes.
21. There are currently four dedicated,
premium rate-driven quiz channels and numerous channels that carry
substantial blocks of such programming. These channels are variously
available on all television distribution platforms; programmes
are also available in the late evening on analogue terrestrial.
In addition, some quiz programming is broadcast simultaneously
on more than one channel.
THE ROLE
OF CALL
TV QUIZ SHOWS
IN RAISING
INCOME FOR
BROADCASTERS
22. Ofcom and ICSTIS recognise that broadcasters'
traditional revenue streams are under pressure and broadcast advertising
income is and will continue decreasing. The regulators therefore
understand the need for broadcasters to explore new revenue streams.
The implementation of supplementary and/or alternative funding
models will continue to be essential for broadcasters as digital
technology advances further. Not only will the market become increasingly
competitive, but audience expectations are likely to change dramatically
as their method of consumption develops in the evolving convergent
multi-media landscape. Both regulators therefore believe the main
emphasis of broadcast regulation is likely to continue shifting
towards consumer protection, as viewer interactivity and participation
increases.
23. Comprehensive financial figures for
the TV quiz sector are not presently available. However, both
regulators understand that the TV quiz sector has the potential
to generate fairly significant profits. Ofcom's most recent industry
figures[15]
show TV industry revenue from "interactive services"
at £104 million for 2005, [16]although
it is important to note that this figure included all forms of
interactive revenue (such as "red button" revenue) rather
than simply that for Call TV quiz shows. More specifically, ITV
plc's interim results for the first half of 2006[17]
disclose a profit for ITV Play of £9 million against revenue
of £27 million, after four months of trading.
24. The annual revenue returns to Ofcom
of individual broadcasters (required for the purpose of licence
fee calculations) remain confidential. However, these figures
are required to reflect the revenue figures that appear in licensees'
annual audited and published accounts returned to Companies House,
which are publicly available.
SHARED RESPONSIBILITY
BETWEEN OFCOM
AND ICSTIS
25. Both Ofcom and ICSTIS regulate Call
TV quiz shows within their respective remits. Ofcom regulates
the actual content of the transmission, including the clarity
and integrity of the competition(s) involved and the general presentation
of the broadcast in terms of harm and offence. ICSTIS regulates
matters concerning the internal operation and promotion of the
premium rate service itself—for example, the selection of
entrants and the on-screen information regarding costs. Ofcom
and ICSTIS are in frequent contact and share information and pass
complaints between each other when necessary (in accordance with
data protection requirements).
26. This division of responsibility is reflected
in the regulators' respective Codes and statutory duties. In theory,
overlap is possible, especially in the area of complaints. However,
in practice, neither regulator has needed to consider a complaint
where it believes the complainant would have been best served
by the other. While it is also possible that complaints could
raise issues of relevance to each regulator, this is extremely
uncommon, as substantive complaints generally have one overriding
concern that may tend to generate only additional generic comment
or allegation. Complaints are considered in more detail in paragraphs
38-45, below.
OFCOM RULES
27. Ofcom published its Broadcasting Code
in July 2005, which set out the editorial standards that all Ofcom
licensees must comply with. This Code introduced for the first
time a rule concerning the conduct of competitions on television
services—Rule 2.11 (see below). Prior to July 2005 Ofcom
had administered the legacy ITC Programme Code, which did not
address the issue of competitions in any way, as it had been considered
that television broadcasters' own viewer competition rules were
adequate. Such rules generally stated that a broadcaster's own
decision was final.
28. For competitions run on Ofcom licensed
services, the Broadcasting Code's key rules are:
— Rule 2.11: Competitions should
be conducted fairly, prizes should be described accurately and
rules should be clear and appropriately made known.
— Rule 10.11: References to brands
within competitions must be brief and secondary.
29. In respect of premium rate numbers the
Broadcasting Code contains the following specific rules:
— Rule 10.9: Premium rate numbers
will normally be regarded as products or services, and must therefore
not appear in programmes, except where:
— they form part of the editorial
content of the programme; or
— they fall within the meaning
of programme-related material.
[Meaning of "programme related material":
These are products or services that are both
directly derived from a specific programme and intended to allow
listeners or viewers to benefit from, or to interact with, that
programme.]
— Rule 10.10: Any use of premium
rate numbers must comply with the Code of Practice issued by the
Independent Committee for the Supervision of Standards of Telephone
Information Services (ICSTIS).
30. Fairness and transparency in Call TV
quiz shows is crucial, regarding both the quizzes themselves and
the operation of the phone lines (call charges etc).
31. Over the past 20 months there had been
a significant increase in the volume of Call TV quiz shows being
broadcast. (However, the last few months has seen a fall in the
number of licensees providing Call TV quiz shows, as broadcasters
leave the market.) Both Ofcom and ICSTIS saw the number of complaints
in this area increase. However, while the number of complaints
received directly by ICSTIS has shown a slight decrease over time,
the number received by Ofcom has continued to increase (see Annex
3).
32. Viewers concerns tended to focus on:
— Clarity about call costs (particularly
in the event that a caller does not get selected to talk to the
presenter);
— The chances of being selected to
talk to the presenter;
— Presenters allegedly stating that
no-one is calling, while the random selection process appears
to be preventing callers getting through to the studio;
— Callers allegedly aged under 18;
— The ease or difficulty of the competitions;
— The validity of the free entry route;
— Clarity concerning correct answers;
— The transparency of rules; and/or
— Competitions allegedly being repeated
with a premium rate number still in operation.
33. As a result of the issues viewers raised
with Ofcom, and its own monitoring of the services and discussions
with the relevant broadcasters, Ofcom published guidance to assist
broadcasters in their interpretation of Rule 2.11. [18]The
guidance is enclosed as Annex 1 and can also be found at: http://www.ofcom.org.uk/tv/ifi/guidance/bguidance/guidance2.pdf
However, in brief, it recommends:
— familiarisation with ICSTIS rules;
— as best practice, the adoption of
an equally prominent free entry route where PRS is used (in anticipation
of the Gambling Act's requirements);
— being fully aware of Gambling Commission
policy, when available;
— speedily dispatching prizes and a
comparable substitute if a prize becomes unavailable;
— avoiding the presentation of cash
prizes as a resolution of financial hardship;
— clearly and regularly announcing
competition rules, particularly eligibility restrictions;
— being able to demonstrate to Ofcom
the methodology used in a competition and that the methodology
cannot have been changed—for example by lodging the methodology
or answer or both with a suitable professional third party such
as a solicitor, before transmission;
— explaining to viewers where competitions
are carried forward to another time or day;
— providing answers to viewers at the
end of a competition, with or without the methodology;
— not describing cryptic or complicated
solutions as simple;
— making clear when a repeated broadcast
of a closed competition is being aired and that calls should not
be attempted; and
— posting the names of winners on a
website soon after the outcome of a competition.
34. In producing this guidance Ofcom has
sought to strike an appropriate balance between consumer protection
and broadcasters' freedom of expression. It focuses on transparency
to the audience and complements the work undertaken by ICSTIS'
(see below).
ICSTIS RULES
35. In September 2005 ICSTIS first consulted
on a Statement of Expectations which included the need for a prior
permission regime for the live element of the call when successful
contestants get through live to air. All "Live Services"
require permission from ICSTIS before they can operate and its
approach with Call TV quiz shows was therefore consistent with
that permission regime. The consultation document set out the
proposed conditions with which service providers would need to
comply. In particular, the consultation proposals focused on:
— Clarity of pricing information.
— The adequate provision of relevant
terms and conditions.
— Aspects of the services that could
be misleading.
— Substantiation of certain aspects
of the operation of the services.
36. ICSTIS' consultation sought evidence
from all sources including, but not limited to, consumers and
consumer groups, telephone companies with experiences of consumers
running up unexpectedly high bills and premium rate service providers
of Call TV quiz shows.
37. The evidence from complainants at the
time suggested that a key concern was that many viewers did not
fully appreciate the cost of the calls to these services and that
they would pay for each call regardless of whether they were successful
in getting through or not. This issue was therefore a key focus
of the consultation and a key outcome was greater regulatory clarity
about the need to make abundantly clear to all viewers that they
would pay for each and every call, regardless of their success
in getting through to the studio, which most do not. Viewers should
see the price visibly on-screen. The presenters of the programmes
must periodically remind viewers of the price and when callers
get through they should be reminded again of the call cost. The
purpose was that no viewer or caller should ever be in any doubt
that they will be paying to play at all times regardless of the
outcome of their attempt(s) to participate.
38. The Statement of Expectations for
Call TV Quiz Services was issued in January 2006 and forms
Annex 2. At the end of the Statement ICSTIS advised that it would
keep this format under review and would undertake periodic monitoring
exercises to ensure that the level of consumer protection necessary
would continue (see paragraphs 47-49, below). Some key aspects
of the Statement of Expectations are:
— Pricing information on-screen must
be easily legible and prominent. If the pricing information scrolls
then it should never be off the screen for more than 60 seconds.
Pricing information should also be spoken by the presenters at
regular intervals (eg between every five to 15 minutes). The pricing
information on screen must make it clear that consumers will be
charged irrespective of whether or not they get through.
— Pricing information making clear
to consumers that all calls are being charged should be announced
in the message at the beginning of every call to the Call TV quiz
show.
— Contact details should be provided
for viewers who need to contact the programme provider should
they have an enquiry, problem or concern.
— The use of clocks and other countdown
triggers must be clearly explained and must not mislead consumers.
PUBLIC REACTION
ABOUT CALL
TV QUIZ SHOWS—COMPLAINTS
39. Ofcom and ICSTIS have procedures in
place to ensure that duplication of complaints is avoided and
that complainants are aware of which regulator is considering
the issues they raise, irrespective of which one they may have
originally approached.
40. Ofcom receives a significant number
of complaints about Call TV quiz shows, including the occasional,
though rare, direct referral from ICSTIS. In 2005 Ofcom received
over 450 such complaints; this year, that total is likely to exceed
800. A break down of the number of complaints received by month
(January 2005-October 2006) can be found at Annex 3.
41. Approximately 25% of complaints made
to Ofcom about Call TV quiz shows relate to the promotion and/or
operation of the premium rate phone lines. A quarter of this 25%
of complaints are directly referred to ICSTIS (see paragraphs
44-45, below). The remainder are more generic and Ofcom therefore
advises complainants to contact ICSTIS directly with further details.
42. Approximately 50% of complaints made
to Ofcom concerning Call TV quiz shows are unspecific and raise
general objections about the difficulty of quizzes, the potential
exploitation of viewers and the prevalence or poor quality of
the output. These complaints do not raise specific issues, under
Ofcom's Broadcasting Code, that can be taken forward.
43. The remaining 25% of complaints received
by Ofcom concerning Call TV quiz shows raise specific issues that
require investigation. To date, Ofcom has published in detail
16 findings on Call TV quiz shows. All findings appear on the
Ofcom website in its Broadcast Bulletins, which can be found at:
http://www.ofcom.org.uk/tv/obb/prog—cb/ and are published
fortnightly. In five cases broadcasters were found in breach of
the Broadcasting Code or their licence to broadcast. In each of
the remaining 11 cases broadcasters recognised the problem highlighted
by the complainant and took appropriate action to resolve the
matter. The remaining complaints investigated by Ofcom were found
not to be in breach of the Broadcasting Code.
44. ICSTIS' complaints, detailed at Annex
3, indicate the trend in complaints since January 2005, when it
first collected data on Call TV quiz shows as a unique category
of premium rate service. The data pattern suggests that complaints
to ICSTIS were escalating late in 2005 at the time when it first
reviewed the regulations of these services, which resulted in
its Statement of Expectations for Call TV Quiz Services.
After issuing this Statement, complaints fell rapidly until around
mid 2006 when numbers rose slightly. This data excludes issues
raised by complainants which can not be taken forward as they
do not raise concerns under ICSTIS Code.
45. To date ICSTIS has undertaken 9 investigations
of providers of the premium rate phone lines which connect the
broadcasters to the public. In each case breaches of ICSTIS Code
of Practice have been found. No formal sanction has been applied
to these breaches but the providers of the services have been
required to remedy the breaches. The breaches have for the most
part been linked to an insufficient clarity about the transparency
of the pricing information to callers about precisely how much
they would pay each time they called the premium rate phone number.
In each case where this aspect of the services in question was
in breach it was remedied at the time. Under ICSTIS' extensive
monitoring exercise this will be reviewed again as part of ICSTIS'
review of these services (see below).
FURTHER REGULATION
OF CALL
TV QUIZ SHOWS?
46. Ofcom and ICSTIS have a close working
relationship concerning the regulation of Call TV quiz shows and
other issues of mutual interest, where their remits and boundaries
meet. They are determined to set a standard for Call TV quiz shows
which, whilst acknowledging that this emerging type of programming
is obviously popular with audiences, provides adequate protection
for all consumers, including those who are not familiar with the
genre.
47. On 10 October 2006 ICSTIS announced
that it would be undertaking a further and detailed review of
Call TV quiz shows in light of both the continuing level of complaints
about these services and the on-going concerns expressed by various
opinion formers as to the perceived fairness of some of these
services. The scope of its review was agreed with Ofcom.
48. In announcing the review, ICSTIS' intended
scope is as follows:
— Transparency—Do consumers
actually understand what's involved—the cost of taking part,
the element of chance and the fact that every caller pays even
if they fail to get through to the studio?
— On-screen statements—Do
the on-screen statements made by presenters always match records
of calls to the programme (for example, statements that say no
calls are being received)?
— Excessive use—There
appears to be some evidence of problems with repeat calls and
bad debt. Should call/spend limits exist, be mandated or left
to the industry?
— Prize fulfilment—Do
operators have efficient arrangements in place to ensure prizes
are issued quickly and with certainty?
— Free web entry routes—Are
these genuine equivalent alternatives to paying for a PRS call?
49. ICSTIS' review will take account of
extensive monitoring of several programmes/channels during various
times of the day. At the same time ICSTIS will be considering
the trends in the complaints it has received to see, again, if
any adverse trends have arisen that could impact on the consumer
protection framework it has set in place, working with Ofcom.
Finally, ICSTIS is commissioning independent consumer research
in order to obtain robust evidence regarding consumer attitudes
or concerns about the Call TV quiz programming format to inform
better its actions. This independent data will help ICSTIS understand
consumer thinking. It will also influence how far the current
Statement of Expectations may require further clarification in
light of the evidence and the conclusions that can be reasonably
drawn from it.
50. Ofcom is currently preparing proposals
to consult in the next few months on whether Participation TV
(which includes services such as Call TV quiz services) should
actually be categorised as advertising and not as editorial content.
Participation TV is the generic term given to television channels
and programmes which involve, to a greater or lesser extent, interaction
with the viewers—usually by means of premium rate telephony.
It seems to be in the interests of viewers that, where content
primarily comprises of selling messages and commercial transactions
are significantly involved, such content should be regulated as
advertising, not editorial. The Advertising Code is directed towards
consumer protection (for example, regarding misleading claims)
and therefore may be more appropriate than the Broadcasting Code.
THE GAMBLING
COMMISSION
51. The Gambling Commission ("the Commission")
has recently published an Issues Paper on the implications for
prize competitions and free draws of the new lottery provisions
contained in the Gambling Act 2005. The Commission's interest
in Call TV quiz shows focuses essentially around the question
of whether or not they will fall to be regarded as lotteries under
the 2005 Act. If so, they will require a Commission licence to
operate. According to the Commission, Call TV quiz shows have
many of the attributes of what are defined as "complex lotteries"
in the new Act, in that they involve a series of processes in
which the first relies wholly on chance. But many, if not all,
operate a "free entry" route. The Commission considers
that the "free entry" route has the potential to avoid
the programmes being classified as complex lotteries if they meet
a five point test in the Act, which covers such aspects as publicising
the free route so that it comes to the attention of all participants
and that the system of allocating prizes does not distinguish
between the two routes.
52. Whether or not Call TV quiz shows are
defined as lotteries is a matter for the Commission. However,
that decision will have an impact on both Ofcom and ICSTIS and
the way this sector is regulated. Lotteries are tightly regulated,
both under current legislation and the new Gambling Act 2005 (which
will be fully implemented in late 2007). Under the Gambling Act,
there are strict licensing requirements and constraints on who
is eligible to hold a licence, at least 20% of proceeds must go
to good causes and there are limits on total proceeds that may
be generated in a calendar year. It is not currently clear whether
broadcasters of Call TV quiz shows would be able to satisfy these
requirements. However, if Call TV quiz shows were defined as lotteries,
broadcasters of such output would operate under different legal
obligations. Ofcom, ICSTIS and the Gambling Commission therefore
will continue to keep in close contact to ensure that consumers
are adequately protected and regulation is consistent.
53. While Ofcom does not currently have
complete information on what the market is worth (see paragraphs
22-24, above), Call TV quiz shows operating under the current
model clearly have the potential to be extremely profitable for
broadcasters and the Issues Paper therefore has significant implications
for them. In the run up to the full implementation of the Gambling
Act 2005, and beyond, the outcome of the Gambling Commission's
consideration of the legal issues surrounding the distinction
between lotteries, prize competitions and free draws is likely
to impact on how Call TV quiz shows operate (if they continue
to do so).
CONCLUSION
54. Sources of revenue other than advertising
and sponsorship are increasingly important in the television market.
Premium rate call and text mechanisms have become a key part of
that new income, and the need for robust consumer protection and
clarity about the legal position of broadcast competitions will
be more important than ever if the sector continues to expand.
Ofcom and ICSTIS therefore welcome the Culture Media and Sport
Committee's inquiry into Call TV quiz shows.
55. Many viewers enjoy participating in
TV programmes and find services such as quizzes entertaining and
engaging. Regulators generally should be wary of imposing value
judgements on how the public spends its time and money providing
consumers are able to make informed choices and the product or
services in question are lawful and fairly provided.
56. The three regulators, Ofcom, ICSTIS
and the Gambling Commission continue to maintain close and regular
contact with each other. Ofcom and ICSTIS are proactively considering
whether new rules and/or guidance are required in the area of
Call TV quiz shows. Both regulators will always seek to work with
other authorities where appropriate, to ensure that broadcast
licensees and premium rate services providers are fully aware
of their responsibilities and that potential participants of Call
TV quiz shows are adequately protected by effective regulation.
16 November 2006
10 Risk, responsibility and regulation-Whose risk is
it anyway? Better Regulation Commission, October 2006. Back
11
The Communications Market 2006; Ofcom; August 2006. Back
12
The report notes that Ofcom had not received revenue returns from
all multichannel licensees at the time of publication. Back
13
ITV plc Interim Report; ITV plc; 9 August 2006. Back
14
There are also other genres of channel predicated on the use of
premium rate services, for example dating, adult chat and psychic
channels. Back
15
The Communications Market 2006; Ofcom; August 2006. Back
16
The report notes that Ofcom had not received revenue returns from
all multichannel licensees at the time of publication. Back
17
ITV plc Interim Report; ITV plc; 9 August 2006. Back
18
Ofcom Guidance Notes, Section 2: Harm and Offence; first issued
on 18 April 2006. Back
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