The communications regulator is highly critical of premium rate telephone services used in connection with television programmes. An Ofcom inquiry concludes that “compliance failures were systemic” and that “some broadcasters appeared to be in denial about their responsibilities”. It recommends building consumer protection measures into the licences of broadcasters.
“Phoning a TV show isn’t like ordering pizza,” said Richard Ayre, the Ofcom executive who led the inquiry. “When you put the phone down nothing arrives: you just have to trust that your call was counted. If broadcasters want audiences to go on spending millions calling in, they need to show they take consumer protection as seriously as programme content.”
In his report, Richard Ayre noted that many instances of non-compliance have come to light in recent months and said “the problems may have been even greater than is yet recognised”. He added that “the figures may run into millions”.
He referred to “the absence of systems designed to require, ensure and audit compliance. In the absence of such systems individual mistakes, whether the result of technical failure, misjudgement, negligence or deliberate deceit, too often went unnoticed or unreported and sometimes ignored.”
“The telecoms operators, for example, may have been unable or unwilling in some instances to provide sufficiently robust technical systems to ensure that no calls were ever lost or that no caller was charged after the lines should have closed, but the service providers, producers and broadcasters were, or should have been, aware of these limitations and they went ahead despite the risks.”
“Some broadcasters — with the most to gain from the use of PRS in terms of revenue and audience engagement, and the most to lose in terms of reputation when things went wrong — seemed to be in denial about their own responsibility to ensure that the programmes they devise, commission or produce fully deliver on the transactions they offer to viewers.”
When he suggested that the transactional nature of premium rate telephone services pointed to a new form of relationship with those who participated, Richard Ayre, a former BBC news executive, appeared surprised at the reaction. Citing Sky as an honourable exception, he said: “They talked about viewers and the interests of the audience watching the programme, apparently regardless of the fact that a portion of those viewers had entered into an additional transaction entitling them to get an extra service they had paid extra for.”
“There is evidence of intense pressure applied by broadcasters upon producers, and by both upon service providers, to maximise revenues — and that meant maximising calls,” he said. “Engaging viewers was doubtless often a motive too, but PRS revenue proved a goldmine and it produced a gold rush.”
Ed Richards, the chief executive of Ofcom, said: “This inquiry shows the extent to which there has been a systemic failure of compliance.”
The inquiry found that revenue generation was a major driver in the growth of services. It said that some broadcasters appeared to be in denial about their responsibilities to ensure programmes delivered on the transactions they offered to viewers. The inquiry concluded that there was an apparent lack of transparency through the supply chain — between telecoms operators, producers and broadcasters — resulting in a lack of clarity about responsibilities. It also found that broadcasters are concerned about the relationship between the communications regulator Ofcom and the premium rate telephony regulator ICSTIS.
The inquiry concludes that broadcasters must be made directly accountable for their use of premium rate services. It recommends amending their broadcast licences to include requirements for consumer protection and require independent third-party auditing of premium rate services. It also recommends issuing further guidance on measures to minimise lost or wrongly-charged calls, ensuring fairness in competitions and transparency in pricing.
Following the inquiry’s findings and recommendations, Ofcom intends to consult on the full recommendations as part of its broader Participation Television consultation, due to be published in the next few weeks. In addition, Ofcom will review the wider aspects of the co-regulatory relationship with ICSTIS.