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Summary

1.1 ‘Ofcom’ (the Office of Communications) exists to further the interests of citizens and consumers through a regulatory regime which, where appropriate, encourages competition. Effective competition delivers choice and lower prices to consumers as well as opportunities for new services and providers. However, consumers may need protection from inappropriate behaviour by certain providers that may undermine confidence in the market as well as causing consumer detriment.

1.2 This document invites comments on proposals for modifications to Ofcom’s condition regulating the provision, content, promotion and marketing of Premium Rate Services (‘PRS’) (‘the PRS Condition’) under section 120 of the Communications Act 2003 (‘the Act’). The effect of the PRS Condition is to bind each and every person falling within the definition of ‘Communications Provider’ therein, to comply with directions given in accordance with an Approved Code by the Enforcement Authority (i.e. ICSTIS) and if there is no Approved Code, the provisions of the order for the time being in force under section 122 of the Act.

1.3 The statement and notification of the PRS Condition was published by the Director General of Telecommunications on 23 December 2003, taking effect from 29 December 2003, and is available on the Ofcom website at: http://www.ofcom.org.uk/telecoms/ioi/nwbnd/prsindex/prs/prs_conditions.pdf

1.4 Ofcom is now proposing to modify the PRS Condition in two ways.

1.5 First, Ofcom proposes to extend the definition of ‘Controlled PRS’ (‘CPRS’) to include ‘internet dialler software’ (‘diallers’), irrespective of the call cost or number. Diallers are a form of software that switch the modem setting of the computer that the dialler programme is running on from one particular internet connection to another. Ofcom’s proposals in this document are based on growing evidence of consumer harm arising from ‘rogue’ dialler services using ‘08’ numbers and, in particular, ‘087’ numbers in an attempt to evade the PRS regulatory regime.

1.6 In proposing to extend the definition of CPRS to capture diallers, Ofcom does not want to unintentionally capture pay-as-you-go dial up and unmetered dial up internet services. These services provided by Internet Service Providers provide narrowband access to the internet to end-users using a dial-up connection. Ofcom is therefore proposing to exclude pay-as-you-go dial up and unmetered dial up internet services from the definition of internet dialler software set out in Annex 4.

1.7 Second, Ofcom has received representations from stakeholders to the effect that the exclusion of ‘Mobile Services’ from the CPRS definition means that Ofcom does not currently regulate PRS accessible via mobile telephones. Ofcom is therefore proposing an amendment to the CPRS definition to avoid any doubt that PRS accessible over mobile telephones are regulated under Ofcom's back-stop powers.

1.8 Ofcom does not intend to consider the scope, purpose and effectiveness of PRS regulation as part of this consultation but, rather, to restrict the consultation to the two matters outlined above. This is because Ofcom considers that there is a need to address these issues urgently so that consumers are adequately protected from the potential for consumer detriment arising from ‘rogue’ dialler software on numbers other than ‘09’, and from any doubt that PRS accessible over mobile telephones is regulated by Ofcom.

1.9 However, in light of representations received from stakeholders, who have raised concerns relating to the appropriateness of regulation to new services, and the need to reflect technological advances, Ofcom intends to consult on a thorough policy review of the scope of the regulation of PRS to commence in 2006. This review will consider the scope of PRS regulation, and how it should be applied to, or removed from, emerging commercial services coming out of the mobile and broadcast sectors, as well as growth in broadband and Voice over Internet Protocol (‘VoIP’) billing as a possible new route to content

1.10 Ofcom is also currently undertaking a review of the regulatory framework for Number Translation Services (‘NTS’), and published a further NTS consultation document, Number Translation Services: a way forward, on 28 September 2005 (the ‘NTS consultation’). That document, which is the second formal stage of Ofcom’s re-examination of the regulatory framework for NTS, seeks to address certain policy issues associated with the NTS regime as it applies to ‘08’ number ranges rather than the ‘09’ range, and makes revised proposals for changes to the regulatory regime for ‘08’ numbers. The consultation closes on 6 December 2005 and is available on the Ofcom website at: http://www.ofcom.org.uk/consult/condocs/nts_forward/

1.11 Amongst other proposals set out in the NTS consultation, Ofcom is proposing that adult services currently provided on ‘08’ numbers should be brought within the regulatory framework for PRS regardless of the call cost, and that the National Telephone Numbering Plan (‘the Plan’) should be amended to clarify that adult services should only be provided on the ‘0908’ and ‘0909’ ranges that are designated for adult services.

1.12 Ofcom also proposes in the NTS consultation that ‘0871’ numbers should be brought within the current regulatory framework for PRS which would, in effect, mean that services using the ‘0871’ number range would have the same obligations as those using ‘09’ numbers. This proposal aims to provide a greater level of consumer protection, meaning, among other things, that diallers on ‘0871’ would be subject to the prior permissions regime. In the NTS Consultation, Ofcom is seeking views on the proposal to bring ‘0871’ within the PRS framework, saying that if it decides to proceed following consultation, its intention is to issue a consultation on the proposals during a 12 month interim period commencing next year.

1.13 This document proposes to extend the PRS Condition to cover all diallers and should these proposals be taken forward, this would bring diallers on ‘0871’ within the PRS regime. Although the NTS consultation indicates Ofcom’s intention not to consult on the issue until next year at the earliest, the growing evidence of consumer harm, which is set out in this document, has led Ofcom to conclude that more immediate action is required, and Ofcom is therefore consulting on the issue now. Any comments made in response to the NTS consultation on the issue of dialler software being brought within the PRS regime will be taken into account by Ofcom in considering whether to take forward its proposals as set out in this document.

1.14 In setting out its proposals in this document, Ofcom has considered, and acted in accordance with, its principal duty in section 3 as well as the community requirements in section 4 of the Act. Ofcom has also considered the tests set out in sections 120(5) of the Act which apply to the setting, modification and revocation of a condition.

Consultation

1.13 Ofcom is inviting written views and comments by 5pm on Monday 22 December 2005, on the proposed modifications to the PRS Condition, which is set out at Annex 4 to this document.

1.14 Details of how to respond on each of these issues can be found in section 5.

1.15 Ofcom will give careful consideration to all comments received during the consultation period, and in light of the comments received, may give effect to the proposals set out in this document, with or without modification, by publication of a Notification and explanatory statement. Ofcom expects to publish the Notification and Explanatory Statement early in 2006.

Effective date

1.16 Subject to the outcome of consultation, Ofcom proposes that the amendment to the PRS Condition will take effect one month from the date of publication of the Notification and Explanatory Statement. This is to provide a reasonable period of implementation before the new obligations take force.

The full document is available below:

• Responses
• Conditions regulating Premium Rate Services [pdf]
  Full Print Version

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