Memorandum submitted by ICSTIS
I understand the Joint Scrutiny Committee has
met and started to take evidence. I write to offer to give oral
evidence on consumer protection and education issues and on the
role on non-statutory regulators.
ICSTIS is the independent regulatory body responsible
for premium rate charging in the United Kingdom. This organisation
is "underpinned" by a License Condition attached by
the DTI to UK network operators licenses.
Premium rate charging is now widely used across
the communications fieldon the Internet, on interactive
television and through "reverse SMS" (text messaging)
as well as on conventional and mobile telephony. I attach a paper
on the implications of convergence in the communications sector
but would like in this letter to highlight a smaller number of
issues which I think are directly relevant to the Committee's
Market and technological developments are not
standing still waiting for the main Communications Bill to pass.
Charging for content is now common practice on television, the
Internet and across different forms of telephonyperhaps
most obviously and significantly with mobile telephony. Premium
rate charging to your telephone account is now used as a form
of micro and mini payment for a host of entertainment and information
services: everything from passport service hotlines to adult Internet
content to Big Brother and Pop Idol. These services are predominantly
"virtual"provided on a national or international
basis from a single location, possibly anywhere in the world.
ICSTIS has expertise in dealing with services rather than products
and this is one feature of our unique regulatory model. This is
explained in more detail in the attached paper but is based on
universal contractual support underpinned by the Oftel/OFCOM Licence
Condition, and independent Committee, published Codes and a consequential
ability to impose meaningful sanctions and to act in extremes
with Stop Now like powers which have effect on the same day.
Consumer trust, understanding and confidence
is going to be key to the take-up of new technologies and a willingness
to transact by new means on new platforms. The real challenge
for all involved lies in building consumer understanding, trust
and confidence. When only 4 per cent of the public in a MORI Poll
understood that it was conceptually possible to make a premium
rate payment on the Internet and when digital television is considered
too complicated a product to operate we're going to have difficulties
in building this trust and confidenceeven if we do not
have to deal with those who would abuse that trust.
We believe there is a need for strategic thinking
over consumer services in the communications field. ICSTIS handles
as many enquiries (120,000 plus) and complaints (10,000 or so)
as leading bodies going into OFCOM. Outside OFCOM we have the
ASA, BBFC, ICSTIS and the Internet Watch Foundation. It is now
proposed that a separate Telecommunications Ombudsman be established,
preferably on a non-statutory basis, to meet our EU obligations.
The draft Bill may also contain regulatory provision for Video-on-Demand
if a non-statutory solution does not materialise. There are obvious
issues over how these various bodies interrelate, are supervised
and base their respective principles (when it comes to content
regulation). There must be a question for industry over how all
this is to be fundedparticularly once the OFCOM cost become
clear. And from the consumer side there must be questions over
the challenges in getting simple clear assistance without delays,
duplication or regulatory "black holes."
There are serious issues to be addressed in
the communications field around the package of the telecommunications
and E-Commerce Directives agreed or currently before Member States.
These directly affect the consumers of communication services
and, again, cannot wait for a Communications Bill. This, in part,
is the drive for a Telecommunications Ombudsman.
More immediately we have the implementation
of the E-Commerce Directive. This is before DTI Ministers at present.
ICSTIS deals with a range of services on the Internet which use
premium rate charging. There are a considerable number of "adult"
services offering increasingly sexually explicit material. Some
of this content is unacceptable and arguably illegal. It could
certainly be considered likely to cause grave and widespread offence
and as such can be dealt with under our Code of Practice. Our
regulatory arrangements deal also with those services which deceive
premium rate customers in terms of pricing, conditions or through
some form of technological trickeryfor example leaving
high-payment dialers running without the consumer's knowledge.
It is worth bearing in mind that these services are now readily
accessible on the Internet through digital television and will
in due course be available on 3G mobile handsets.
There are equally important if less contentious
issues around telecommunications data protection law. We're already
seeing cases of very low cost "spamming" of premium
rate numbers and other services to mobile phone owners across
the UK. We have the same thing with Internet content spammed to
net and digital TV users. We do not hesitate in acting when services
involving premium charging are offered or operated improperly.
But it has to be for the DTI and the Office of the Information
Commissioner to establish and implement the policies relating
to unsolicited promotions when the technology exists to send out
millions of these almost overnight.
We would be happy to provide supplemental information
or attend an oral briefing if this would be helpful.