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Summary

1.1 This statement sets out the Office of Communication’s (Ofcom) approval under section 121 of the Communications Act 2003 (‘the Act’) of amendments to the 11th PhonepayPlus Code of Practice (formerly the Independent Committee for the Supervision of Standards of Telephone Information Services, (ICSTIS)).

1.2 Under the Act, Ofcom has the power to set conditions to ensure that PRS providers comply with PRS regulation. Ofcom may also approve a code of practice for the regulation of PRS subject to certain criteria being met, which is then administered by an “enforcement authority”. PhonepayPlus has regulated PRS in the UK since their inception in 1986. Ofcom approved the 11th Code in November 2006 and this came into force in January 2007. On 5 December 2007, Ofcom published a new framework agreed by Ofcom and PhonepayPlus to clarify the existing regulatory arrangements for premium rate telephone services and to strengthen consumer protection^(-1-).

1.3 In March 2007, PhonepayPlus issued a consultation document^(-2-) recommending amendments to the 11th Code to reflect proposed changes to PhonepayPlus’ governance arrangements. The proposals included:

• Creating a smaller Board focused strongly on setting strategic direction, policy-making and supervising the work of the Executive;
• Establishing a Code Compliance Panel (‘CCP’) consisting of people with professional and other relevant skills and resources necessary to ensure the quality and timeliness of adjudicatory work from which to draw people to sit on Tribunals^(-3-), thereby resulting in a lesser degree of continuing Board involvement in adjudicatory work;
• Ensuring that Tribunals sitting to make determinations on Code compliance issues are always chaired by a legally qualified CCP member.

1.4 PhonepayPlus received 10 responses to its consultation document^(-4-) and, in light of comments received, concluded that the amended 11th Code should be formally submitted to Ofcom for approval on 25 June 2007 in accordance with section 121(6) and 121(7) of the Act. The relevant sections of the 11th Code are attached at Annex 1 to this document, with amendments in bold. The full Code can be found at: http://www.phonepayplus.org.uk/publications/cop/.

1.5 In order to approve the amendments to the 11th Code, Ofcom must be satisfied that:

1. a code has been made by any person for regulating the provision and contents of PRS, and the facilities made available in the provision of such services (the test in section 121(1)(a) of the Act);
2. the Code contains provisions for regulating, to such extent as Ofcom thinks fit, the arrangements made by the providers of PRS for promoting and marketing those services (the test in section 121(1)(b) of the Act);
3. all of the requirements in section 121(2) are met; and
4. having regard inter alia to the provisions of the Code, it is appropriate for Ofcom to approve it (the test in section 121(1)(c), with Ofcom exercising its discretion in accordance with its duties under sections 3 and 4 of that Act).

1.6 In December 2007, Ofcom issued a consultation document^(-5-), inviting comments on whether it should approve the amendments to the 11th Code to reflect proposed changes to the governance arrangements of PhonepayPlus.

1.7 Ofcom received 5 responses to its consultation document^(-6-). The responses were broadly supportive of the proposed changes.

1.8 Having carefully considered the responses to the consultation, Ofcom now decides that it is satisfied that the relevant criteria have been met and in particular that it would be appropriate and in line with Ofcom’s duties to approve the amendments to the 11th Code under section 121 of the Act.

Effective date

1.9 Approval of amendments to the 11th Code (the Notification of which is formally set out at Annex 2) will take effect four weeks from publication of this explanatory statement and Notification. This is to allow PhonepayPlus time to implement the new governance arrangements.

Footnotes:

1.- http://www.ofcom.org.uk/consult/condocs/phonepayplus/formalframework.pdf

2.- ICSTIS’ consultation document is available on the ICSTIS website at: http://www.icstis.org.uk/pdfs_consult/gov_code.pdf.

3.- ICSTIS Tribunals make determinations in respect of Code breaches and approve requests for prior permission to run specified services under the Code.

4.- A summary of the responses received by ICSTIS can be found at: http://www.icstis.org.uk/pdfs_consult/GovCode_ICSTISresponse.pdf.

5.- Ofcom’s consultation document is available on the Ofcom website at: http://www.ofcom.org.uk/consult/condocs/phonepayplus/ .

6.- The responses to Ofcom’s consultation can be found on the Ofcom website under: http://www.ofcom.org.uk/consult/condocs/phonepayplus/responses/ .

• Approval of amendments to the PhonepayPlus Code of Practice (11th Edition) [pdf]
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