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Introduction
Earlier this year Ofcom introduced two amendments to the television licence conditions, giving effect to proposals put forward by various reports commissioned last year, in response to the uproar concerning the use of premium rate telephone services (PRS) by television broadcasters. The amendments seek to ensure that, firstly, broadcasters retain responsibility for all use of PRS (and other forms of communication with viewers) regardless of any arrangements in place with third parties, and, secondly, that the systems the broadcasters have in place in respect of PRS voting and competitions are verified by an independent third party, where these are publicised within programmes.
It is hoped that the amendments will go some way to restoring consumers’ faith in PRS, since the mass allegations of deception and unfair competition hit the headlines and hefty fines were imposed on various broadcasters by Ofcom and Phonepay Plus (PP+). The new regulations are intended to take effect in two stages: broadcasters will be expected to take general responsibility for communications to viewers immediately but will have a three-month grace period before the third party audit element is to be enforced. Ofcom has also said that it will carry out “spot checks” for the first eighteen months. For now, radio broadcasting licences will remain unchanged but Ofcom will be consulting on extending the provisions to radios later this year.
On 27 May 2008, Ofcom published new and updated Guidance for broadcasters in relation to the recent licence amendments. The existing Guidance on the Broadcasting Code (Code) has been updated in respect of the use of PRS in programming and Ofcom is offering new Guidance regarding the verification obligations, which are now to be placed on broadcasters.
Broadcasting Code
Ofcom has updated Section 2 of its Guidance on the Code (Ofcom Guidance Notes Section 2: Harm and Offence), particularly Rules 2.1, 2.2 and 2.11. This Section deals with topics such as harm and misleading information, both of which Ofcom cites as “core concerns” in the operation of participation television.
Protection of the audience
Under Rule 2.1, the broadcaster is responsible for taking appropriate steps to provide adequate protection for the audience in respect of programme material. Ofcom recognises that material shown on television should be in keeping with a “generally accepted standard” (dependent on the context) and that such standard should also apply where viewers or listeners are invited to participate in a programme. Broadcasters should take “all due care” to avoid any viewer who votes, enters a competition or otherwise interacts with a programme, being disadvantaged in any way.
Misleading information
Rule 2.2 deals with content that materially misleads the audience so as to cause harm or offence. Broadcasters are encouraged to pay particular attention to programming that invites participation from the audience as a contribution to editorial, such as the use of PRS. Ofcom advises that “serious offence” may be deemed to be caused where an audience feels that it has been misled or otherwise treated unfairly or negligently, and “harm” is likely to be caused where an audience’s trust in broadcasting has been undermined. Additionally, there is “clear potential” for financial harm where a premium has been paid for participation in a programme.
Competitions
The amendments to the television licence call for the “fair and consistent treatment” of all votes and entries in respect of television programmes. Rule 2.11 of the Code deals specifically with competitions, and provides general advice to broadcasters on the “use of participation techniques”, particularly PRS, within programmes. Ofcom also provides some background information for broadcasters regarding the use of PRS and draws attention to the PP+ prior permissions scheme, reminding broadcasters that they should not contract with a PRS service provider unless that provider has obtained the requisite prior permission from PP+.
In its Guidance, Ofcom states that it expects all competitions to be run “ fairly and honestly”, with all participants having an equal chance to succeed. Ofcom acknowledges that there are two main factors which impact the operation of competitions:
- the technical complexity of telephony and other communication technology chains; and
- the pressures of production, particularly live production.
Technical complexity
Given that broadcasters retain responsibility for the systems put in place for the use of PRS, Ofcom advises broadcasters to seek expert guidance on all parts of the PRS systems used by viewers to enter competitions and on those which they rely for the administration of such competitions. The systems should be equally robust whether the interaction involved is paid for by the consumer or offered free of charge. The broadcasters’ responsibility cannot be reassigned, therefore it is important that they can show that “all due care has been taken with network selection and operational arrangements”.
Ofcom acknowledges that it is now generally possible for telephone lines to be closed after competition entry and voting periods have ended, so that calls made outside these timeframes do not incur a premium charge. On this basis, the Guidance states that arrangements where charges continue to be incurred outside these timeframes are “very much more likely to be found in breach of the Code or of licence conditions”. In addition, if revenue is to be generated from the audience’s participation, which is likely to be the case in respect of most PRS use (Channel 4, for example, made over £10M from 2001-2007), Ofcom will regard this as an “aggravating factor” when considering penalties for proven compliance failure.
So-called “red button activities” are specifically referenced in the Guidance, reflecting concerns that where users use the button for entry into competitions or voting, there is a risk that a charge may be imposed for these activities without the relevant information being properly registered, particularly if the user navigates away from the connection too early. Ofcom advises broadcasters to ensure that viewers who select the relevant chargeable option receive a “specific visual on-screen warning” explaining how to minimise risk of their entry being charged but not received.
Pressures of production
The Guidance recognises that previous compliance failures may have been made as a result of broadcasters prioritising production and editorial values ahead of fairness and their regulatory duties. Time is a critical consideration, especially in live television. As the 2007 Ayre Report proposed, broadcasters must start to consider the length and format of a programme from the outset, and whether, given these considerations, it is practicable for competitions to be handled properly, allowing sufficient time for dealing with the information and to safeguard against potential technical difficulties. Ofcom stresses that broadcasters need to be prepared to abort a competition if these considerations are compromised and to be honest with the public should this occur. In all cases, Ofcom advises broadcasters to take a transparent approach to competitions, and to explain to viewers how they are run and how winners are to be chosen.
Transparency of costs
In line with this transparent approach, broadcasters should provide viewers with as much “clear detail” about costs as is practicable. The Guidance states that the often used “networks/mobiles may vary” wording may not sufficiently convey the possibility of significantly higher charges being incurred by some users of non-BT networks, particularly mobiles. Rather, Ofcom recommends using: “Calls cost Xp from BT lines. Calls from other networks and from mobiles may vary and can cost a lot more. Contact your provider for details”, or, alternatively, capping the price at a maximum level where it is possible to do this.
Independent verification
Ofcom’s second amendment to the television licence requires broadcasters to ensure that their PRS compliance procedures include a system of verification by an “appropriate third party”. Ofcom does not make any recommendations as to which third parties are deemed “appropriate”, this is a matter for each individual broadcaster, but the Guidance does state that Ofcom will need to be satisfied that the third party chosen has appropriate expertise in the relevant fields (for example, risk assessment or data security). The verification process is designed to ensure the “proper handling” of PRS communications and provide broadcasters with some comfort that their systems are appropriately robust.
The verifying third party is required to carry out a full end-to-end analysis of the technical and administrative systems used to support the use of the PRS, including production issues and choice of network. Ofcom specifically states that a full assessment must still be undertaken even when background processes have been signed off for previous programmes. The verification process also requires programmes to be reviewed “regularly” (which will depend on the scale of the programme) and for the information to be documented in a clear and comprehensive way. The broadcaster is obliged to retain the relevant information for at least two years.
As part of its accountability for the use of PRS, each broadcaster must ensure that a Director of the Board (or equivalent) is designated as having specific responsibility for the procedure, who is the primary point of contact for the verifying third party. It is the designated Director’s responsibility to report “significant irregularities” or problems to Ofcom. Ofcom does not refer to specific problems, but advises that there are likely to include, among other things, those which have a material effect on the programme. The Director must also sign a statement, to be published annually for public inspection, confirming that the broadcaster has appropriate PRS procedures in place.
As with the choice of independent third party, the broadcasters are responsible for the design and operation of their verification arrangements, enabling them to have a degree of flexibility in how they discharge their obligations under the licence.
Conclusion
It is hoped that new amendments to the licence and the related guidance will promote trust from all aspects of the supply chain, protect viewers and consumers by establishing best practice procedures and form a dialogue to inform broadcasters so that they better understand their obligations under the regulations.
Ofcom are likely to carry out their promised spot checks over the coming months, particularly in respect of PSBs (Public Service Broadcasters), given the significant compliance failures of some of the major broadcasters last year. With its focus firmly on transparency and accountability, it is likely that Ofcom will deal with any unreported and unmitigated failures in compliance which negatively affect viewers in the strongest possible way.
Emma Way
Article published in the Entertainment Law Review Volume 19 2008. Reproduced here with permission of Sweet & Maxwell.
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