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Restoring trust in broadcasting

The “systemic failure” over premium telephone services

The issue of trust was the dominating theme for broadcasters during 2007. Many broadcasters had lost the trust of their most important stakeholders – their audiences – through the abuse of premium rate services and other interactive services. This included some of the nation’s most popular television programmes.

A premium rate telephone service (PRS) can provide competition entry and voting, recorded information or live conversation for callers. Callers are charged a higher rate on their phone bill – up to £1.50 per minute on BT lines. Call charges are split between the service provider and the network operator who leases the PRS telephone number to the provider.

In July 2007, Ofcom published the findings of a major inquiry into PRS led by Richard Ayre, a non-executive member of the Ofcom Content Board and former Deputy Chief Executive of BBC News. The inquiry, launched after the high volume of investigations into programmes using PRS, found:

• compliance failures were systemic;
• revenue generation had been a major driver of growth in PRS;
• some broadcasters were in denial over their responsibility to deliver on the transactions they offered;
• an apparent lack of transparency in the supply chain of telecoms operators, producers and broadcasters – creating a lack of clarity over responsibilities; and
• a concern of broadcasters over a lack of clarity between Ofcom and premium rate telephone regulator ICSTIS (later renamed PhonepayPlus).

The inquiry recommended that new licence obligations should be imposed on broadcasters, making them directly responsible for consumer protection and PRS compliance. It also recommended that both television and radio broadcasters should ensure independent, third-party verification of PRS activity.

In the same month as publishing Richard Ayre’s inquiry, Ofcom moved to implementing its recommendations.

We also published a consultation on the regulation of dedicated participation TV services – typically, quiz, psychic and adult chat services which all rely heavily on interaction with viewers using PRS. In April 2008 and following the consultation Ofcom proposed new rules to toughen the regulation of these services.

In December 2007 we announced a new framework agreement with PhonepayPlus that includes closer working ties and a new arrangement where Ofcom can give PhonepayPlus direction on important issues.

Rebuilding trust in broadcasting

In a further drive to restore public trust in broadcasting Ofcom and the BBC Trust jointly hosted a seminar in London in November 2007 attended by the Chief Executives of Ofcom, Channel 4 and Five; the Director-General of the BBC; the Chairman of the BBC Trust and the Executive Chairman of ITV.

At the meeting the industry executives committed to a series of measures including: formalising a cross-industry group to share best practice and consider common approaches to PRS issues; addressing the relationship of all links in the supply chain, including clarity on contractual and compliance issues; and developing proposals for industry-wide training, to include freelancers, on ethical standards and editorial best practice.

Sanctions for breaching trust

During the reporting year, Ofcom imposed a number of fines (and other statutory sanctions) against broadcasters for serious breaches of its Broadcasting Code involving the abuse of trust. A number of further investigations are still ongoing. The fines imposed include:

• Channel 4: £1.5m . The Richard & Judy programme was found to have conducted its You Say We Pay game unfairly, by selecting competition finalists early before their phone lines had closed. Viewers calling in after the shortlist had been compiled stood no chance of being selected. The programme also operated a ‘staggered selection’ for selecting finalists, meaning that entrants did not have a fair and equal chance of winning. This practice was also found to have occurred in the making of Deal or No Deal.
• GMTV: £2m . Ofcom imposed its largest-ever financial penalty against GMTV, following misconduct in its viewer competitions between August 2003 and February 2007. The channel was found to be operating:
  • ‘early selection’ of competition finalists before lines had closed; and
  • unfair selection processes, where callers did not have an equal and fair chance of being selected.
• BBC: £50,000 . Ofcom’s first fine against the BBC arose from breaches of the Broadcasting Code during the live transmission on BBC1 of Blue Peter on 27 November 2006. The BBC was fined £45,000 for using a child studio guest to pose as the winner of a viewer telephone competition. The broadcaster was fined a further £5,000 for repeating the show on CBBC but failing to make it clear to viewers that the competition had already closed.
• Five: £300,000 . The channel was found to have faked winners and misled the audience on five separate occasions during its Brainteaser on Five quiz programme. A further 11 similar or identical instances of unfair competitions in the programme, and its spin-off Memory Bank, also occurred.

Safeguarding standards in broadcasting

Celebrity Big Brother

Celebrity Big Brother 2007 provoked strong feelings among the public, with Ofcom receiving over 44,500 complaints about the programme. This unprecedented response was driven by concerns about what they saw as the bullying of a housemate, Shilpa Shetty. Many believed that the behaviour in the Big Brother House was motivated by racism.

We launched a full investigation while the programme was still on air, and found that Channel 4 had made serious editorial misjudgements, compounded by a major failure in its compliance process. The channel was found to be in breach of the Broadcasting Code, and Ofcom imposed a statutory sanction on Channel 4 (and S4C), requiring it to broadcast a statement of its findings on three separate occasions.

Supporting challenging TV

Ofcom also sought to defend the broadcasters’ and the audience’s right to freedom of expression. It is essential that broadcasters continue to investigate and explore issues of public interest.

The year found Ofcom adjudicating on a number of controversial and challenging programmes which received a significant number of complaints. These included news reports of the execution of Saddam Hussein (BBC News and Sky News), Diana: The Witnesses in the Tunnel and Bringing Up Baby (both Channel 4) and Weekend “Nazis” (BBC1).

The highest profile was Channel 4’s Undercover Mosque, from its investigative current affairs series Dispatches, included secretly filmed footage taken from mosques and other organisations.

The undercover recordings featured the teachings of several speakers which the programme alleged to be homophobic, anti-Semitic, sexist and condemnatory of non-Muslims. The programme stated that it had discovered extremism being preached in this country: “…an ideology of bigotry and intolerance spreading through Britain with its roots in Saudi Arabia”.

Ofcom received 364 complaints, and there appeared to be evidence that the complaints were part of a campaign. They alleged bias and offence to Muslims; that the speakers’ views were offensive to non-Muslims; that the programme glorified racism, anti-Semitism, sexism and terrorism; and that the portrayal of the mosque speakers was misleading. We also received two complaints from participants in the programme who claimed that they were treated unfairly and had their privacy infringed.

In our investigation we found that the Dispatches programme had uncovered matters of clear public interest, had handled the material responsibly and that there was no evidence that the audience had been misled. We also found that there had been no unfairness to those featured in the programme and any infringements of privacy that had occurred had been warranted in the public interest.

Public service broadcasting review

Public service broadcasting (PSB) may not be a term we use in our everyday conversations. It may not be something we actively notice when we watch television, listen to the radio or view something on the internet. But it is one of those things that we would miss if it were gone.

PSB programmes reflect life in the UK and our cultural identity. They increase our understanding of the world, stimulate our knowledge and interests and make us aware of different cultures and viewpoints. They are the sort of programmes you miss when you go abroad on holiday, or the programmes you might record while you are away.

PSB is currently provided by publicly owned broadcasters (the BBC, Channel 4 and S4C), and commercial broadcasters (ITV1, Five and Teletext).

While the market alone provides many programmes that could be classed as PSB, our research has shown that this is not enough to satisfy the demands of audiences.

In May 2007 Ofcom announced that it would bring forward its review of PSB by two years. This is because PSB is at a crossroads. Audiences value competition for the BBC, but the underlying economics of commercial public service broadcasting are increasingly difficult. And while audiences place a high value on UK-made public service programming from a mix of providers, there is a risk that this will not be provided to the same degree in the future.

The following month we set out options for Channel 4’s long-term future, following an independent study of the broadcaster’s finances, which concluded that its current funding model is likely to become unsustainable. This issue will be considered in the PSB review.

In September 2007 we published the terms of reference for the PSB review and in April 2008, shortly after the period under review, we published the first phase of our review.

This set out alternative ways that PSB could be funded in the future to meet the demands of audiences, including content which is widely available, free at the point of use and which serves all communities within the UK.

The review is intended to generate a wide debate about the future of PSB. As well as inviting responses as part of a formal consultation, we also launched an online blog for people to debate the issues in the review.

We plan to publish the second phase of the review in autumn 2008.

Radio sector reforms

In April 2007, we published The Future of Radio, a framework for future regulation and licensing of radio, taking into account the ongoing transition of analogue radio to digital platforms including Digital Audio Broadcasting (DAB), digital television and the internet.

The radio sector faces significant challenges, including competition from other technologies such as the internet, as well as increased listening on digital platforms that puts greater pressure on local analogue stations. Our proposals aimed to address these issues with proportionate regulation, and make sure that listeners continue to receive choice and diversity as radio makes its transition to digital.

Having consulted on the framework, we announced a series of radio sector reforms.

The importance of local content

Our research showed that when it comes to key local information such as travel, weather and news, listeners use radio as the default medium. They were also concerned that quality would suffer if this content were not made and delivered locally.

We therefore proposed that all FM local radio stations should provide at least ten hours of locally made programming each weekday, and four hours on weekends.

But to assist flexibility, smaller stations would be able to share a large proportion of this programming (outside breakfast) with other nearby stations.

Simpler Format regulation

We decided to simplify the Format regulation of analogue radio licences, bringing it line with DAB Format regulation. This removed unnecessarily detailed requirements from analogue Formats, while maintaining diversity of radio services for listeners.

Simpler ownership rules

We recommended to the Government simpler rules for the ownership of radio stations, which would allow further consolidation within the industry while protecting plurality within local commercial radio.

Community radio

We also recommended that the Government should simplify the criteria for community radio licences, allowing us greater flexibility in considering licence applications. And we argued for a five-year extension on community licences.

Community radio’s maiden century

They’re small, they are not-for-profit and they reach people with the unique common bond of living within the same 5km area. They’re also a success story.

In just three years, the UK’s community radio stations have mushroomed all over the UK. Indeed, in March 2008, Ofcom announced that the 100th station had gone on-air.

While some stations are designed to serve communities as a whole, others have a single focus. For example, Newport on the Isle of Wight has a station caring for the needs of the elderly; Birmingham has a station for the Muslim community; there’s a Christian station in Cumbernauld; and, in London, a station for experimental radio art.

By the reporting year-end, Ofcom’s Radio Licensing Committee had awarded 162 community radio licences, with a second wave of licensing under way.

Community radio licence awards

Licence awards to serve the following communities were made during the year:

MAY 2007

Inverness
Isle of Bute
North and South Queensferry
Dumfries
Bangor ( Northern Ireland)
Enniskillen

JUNE 2007

Derry/Londonderry
Aldergrove and Antrim
Ballykinler
Holywood
Badenoch & Strathspey

JULY 2007

Stonehaven and the Mearns, South Aberdeenshire
St. Boswells, Borders
Dunoon, Argyll
Glasgow
Barrhead, East Renfrewshire
Lisburn
Belfast

SEPTEMBER 2007

Stevenston, Saltcoats and Ardrossan, North Ayrshire
Newcastle-upon-Tyne
Sunderland
Middlesbrough

OCTOBER 2007

Hartlepool
Bishop Auckland
Catterick Garrison
South Craven, Yorkshire.

NOVEMBER 2007

Leeds

DECEMBER 2007

Doncaster, South Yorkshire
Harthill, South Yorkshire
Market Weighton and Pocklington, East Riding of Yorkshire
Penistone, South Yorkshire
Thorne and Moorends, South Yorkshire
Wirral

JANUARY 2008

Llandudno, North Wales
Rhyl, North Wales
Preston, Lancashire

FEBRUARY 2008

Rossendale Valley, Lancashire
Bollington, Cheshire
Biddulph, Staffordshire
Knowsley, Merseyside

MARCH 2008

Moss Side, Central Manchester
North Manchester
Bolton
Lincoln
Newark on Trent, North Nottinghamshire
Grantham, Lincolnshire

Commercial radio licence awards

Ofcom’s Radio Licensing Committee awarded a commercial FM licence during the year. Following eight applications for the South Wales licence, the Ofcom Radio Licensing Committee awarded the licence to XFM South Wales Limited, a wholly owned subsidiary of GCap Media.

Local DAB licence awards

Ofcom’s Radio Licensing Committee made nine awards of local DAB licences during the year:

JUNE 2007

Location : Hertfordshire, Bedfordshire and Buckinghamshire:
Licensee : NOWdigital

JULY 2007

Location : Derbyshire
Licensee : NOWDigital ( East Midlands) Ltd

SEPTEMBER 2007

Location : Herefordshire & Worcestershire
Licensee : MuxCo Hereford & Worcester Ltd

Location : Northeast Wales and West Cheshire
Licensee : MuxCo Northeast Wales and West Cheshire Ltd

OCTOBER 2007

Location : Northamptonshire
Licensee : NOWdigital Ltd

NOVEMBER 2007

Location : Oxfordshire
Licensee : NOWdigital ( Oxford) Ltd

DECEMBER 2007

Location : North Yorkshire
Licensee : MuxCo ( North Yorkshire) Ltd

JANUARY 2008

Location : Gloucestershire

Licensee : MuxCo (Gloucestershire) Ltd

FEBRUARY 2008

Location : Lincolnshire
Licensee : MuxCo ( Lincolnshire) Ltd

New national DAB licence award

In July 2007, Ofcom’s Radio Licensing Committee awarded of the new Digital Audio Broadcasting national radio multiplex licence to 4 Digital Group Limited. The shareholders behind this consortium are: Channel 4 Radio, Sky News Radio, Emap Digital Radio, UTV Radio, The Carphone Warehouse Group and UBC Media Group.

• Ofcom Annual Report 2007/08 - Section B [pdf]
• Adroddiad Blynyddol 2007-08 Ofcom - Adran B [pdf]

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