Joint Committee on The Draft Communications Bill Appendices to the Minutes of Evidence


APPENDIX 34

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 field—on 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 work.

  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 telephony—perhaps 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 confidence—even 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 funded—particularly 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 trickery—for 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.

May 2002


 
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