ITC Bulletins: Bulletin No. 8


THE ITC AND INTERACTIVE SERVICES

One of the spin-offs from digital technology will be interactive services. An interactive service is one where viewers use their remote control to choose what to watch and when, and in some cases to buy goods directly through the screen. Such services are likely to become generally available from this summer.

These services require technology which provides an electronic gateway between the viewer's television set and information held on a computer. The companies which provide the technology will be ITC licensees but the regulation of the content obtainable through them is far from straightforward. The ITC is now considering its response to these new issues.

There are two basic kinds of interactive service. The first and most important from the ITC's perspective will be 'enhanced television' services. Here it will be possible to access additional information from within television programmes and advertisements. The additional information attached to advertisements will of course be commercial in nature but so will some of the content accessed from programmes. The principal challenges for us will be to ensure both that there is an adequate separation between the programme and the commercial content, and that the viewer can differentiate between advertising and editorial. The second kind of service is the 'shopping mall' where the whole content is commercial. There is unlikely to be a problem with identifying this as an advertising service but there will be the issue of how to ensure that what is advertised is 'legal, decent, honest and truthful'. The same issue will arise in relation to advertising and enhancements to advertisements on enhanced television services.

We are now looking at how to apply basic levels of consumer protection to this new universe of services. The key requirements are transparency, separation, safeguarding editorial integrity and preventing misleading, harmful or offensive advertising. At the moment we are looking at a model that places the responsibility for securing these requirements on the interactive service companies, such as BiB (British Interactive Broadcasting), by way of the contracts these companies will have with their content providers.

Proposals have already been put to the Commission and to the ITC's Advertising Advisory Committee. The next steps are likely to be a seminar involving the interactive service licensees and associated concerns followed by a wide public consultation. The aim is to arrive at a set of rules specific to interactive services.

NEW FACES AT THE ITC

Stephen Locke, currently Global Director of Strategic Research at Andersen Consulting, has been appointed as the ITC's Director of Advertising and Sponsorship. Stephen was previously Director of Research and Policy at the Consumer's Association. He will join the ITC on 28 June.

Marion Bowman joined the ITC as Deputy Director - Programmes on 26 April. She will lead staff involved in programme content regulation. Marion was most recently Managing Editor with BBC Entertainment and has worked for Channel 4, Carlton Television, the ITV Network Centre and as an independent producer.

CONSULTATION ON COMPETITION POLICY PROCEDURES

On 5 May the ITC launched a consultation on the procedures and analytical framework that it will use in the application of its competition duties. The aim is to have a Competition Policy Procedures document, similar in many ways to the various other Codes the ITC publishes, that will help viewers, licensees and their customers understand the way the ITC carries out its statutory duties of competition regulation.

Under the Broadcasting Acts, an important function of the ITC is the economic regulation of all the services that it licenses. In particular, the ITC has the duty to discharge its functions in the manner which it considers is best calculated to ensure 'fair and effective competition' in the provision of licensed services and services connected with them. Although not given concurrent powers under the Competition Act 1998, the ITC's competition duties give it an essential role in applying competition policy in the commercial television broadcasting sector.

In order for the ITC to carry out its duty effectively, there must be transparent and accountable regulatory processes and procedures which allow viewers, licensees and other interested parties to understand how 'and in what circumstances' the ITC will enforce its statutory duties in respect of competition. With this aim in mind, the document also sets out the ITC's analytical approach to competition investigations. The analytical framework (which covers market definition and market power, for example) is consistent with that used by the Office of Fair Trading and other UK regulators with concurrent powers under the Competition Act 1998, and with European Law.

CONSULTATION ON THE BUNDLING OF TV AND TELEPHONE SERVICES

On 20 April the ITC and OFTEL issued a joint consultation document on the bundling of television and telephony services by cable operators. The consultation follows on from an earlier ITC investigation into bundling in the pay television market, the conclusions of which were published in June 1998. In the course of that investigation a number of respondents raised concerns about the way in which some cable operators bundled the supply of television and telephony services and the Commission undertook to follow up these concerns at a later date. OFTEL accepted the ITC's invitation to conduct the consultation jointly.

Two issues are being investigated:


The consultation seeks views on issues of market definition, including the question of whether there is a single national market for pay television services; market power, especially of the cable operators; and the consequences for competition and consumers.

This joint consultation is an example of the growing co-operation between regulators on a number of issues, such as television and telephony services, which cross traditional regulatory boundaries. To date there have been a total of 10 responses including ones from NTL, BT, Flextech, Telewest and C&WC. These responses will be placed in the ITC's library and on OFTEL's website on Friday 11 June and a further two weeks from that date will be given for comments.

TELEVISION: THE PUBLIC'S VIEW 1998

The 1998 survey was published in May this year, continuing to provide the ITC with a picture of what viewers think of television, including programme standards, causes of offence, viewing habits and access to entertainment equipment in the home.

ITV continues to be the most popular choice of channel if viewers were allowed only one (at 40 per cent), but the gap with BBC1 has narrowed (35 per cent). The gap is also narrowing for perceptions of political bias. Historically, the BBC has been perceived as pro-Conservative, but in 1998 the proportion who thought there was such a bias dropped dramatically to 10 per cent, from 16 per cent in 1997 and 24 per cent in 1996. The figure has been as high as 27 per cent.

For the first time, the survey included a section on attitudes towards television advertising. This revealed that what viewers most like about advertisements is their humour and for 10 per cent the opportunity they provide to go and make a cup of tea! Nine per cent of viewers mentioned that fact that advertisements told them of new products or drew their attention to existing ones. Most viewers are content with present levels of advertising on channels 3, 4, and 5, but there is more dissatisfaction with the amounts of advertising on cable and satellite channels.

Copies of Television: The Public's View 1998 are available from the ITC, price 7.50.

MED TV LICENCE REVOKED

After repeated failure to comply with the requirements of its licence and following a period of suspension, the Kurdish satellite channel Med TV was served a notice by the ITC revoking its licence on 23 April. The licensee's service remained suspended until the notice came into effect in 28 days as required by law.

Med TV's licence was suspended on 22 March by the ITC under section 45A of the Broadcasting Act 1990, following four broadcasts which included inflammatory statements encouraging acts of violence in Turkey and elsewhere. These were judged by the ITC as 'likely to encourage or incite crime or lead to disorder'. This is against UK law, as set out in the 1990 and 1996 Broadcasting Acts.

UPDATE ON SIGN LANGUAGE PROVISION ON DTT

The end of April marked the closing date for responses to the consultation on supplementary guidelines to the Code on Subtitling, Sign Language and Audio Description on Digital Terrestrial Television (DTT) which was published in February 1997. The ITC undertook to review the Code every two years in light of future developments in programme services or in technology.

The purpose of the consultation was to gather views on the new production and transmission standards for sign language provision on DTT. This applies to both the open format (where the signing is displayed permanently on screen) and the closed format (where a separate signal provides a sign language image for optional display in the receiver).

A total of 19 responses were received from organisations representing the deaf and from broadcasters. These have now been made available in the ITC Library for public viewing.

The ITC also held a seminar on the consultation bringing together representatives from broadcasting and the deaf community to discuss and gain a better understanding of the issues from all perspectives.

The ITC intends to publish a final version of the production standards guidelines, and its preliminary conclusions on the closed format transmission standard, later this month.

CARLTON LICENCE REVISION

The ITC has allowed Carlton to increase regional factual programming from an average of 35 minutes per week to 1 hour 14 minutes a week. A corresponding reduction in the minimum requirements for regional entertainment (including drama) has been allowed, from an average of 1 hour 16 minutes a week to 37 minutes a week.

Carlton requested the licence variation because of the changes to the ITV early evening schedule. The drama series, London Bridge, was scheduled at 6.30pm, a slot now taken by the ITV Evening News. Carlton considered that the drama series to be unsuitable for the new regional slot at 5.30pm, and that other programming would be appropriate.

Carlton will continue to provide some regional drama, and a new range of factual programmes will bring more diversity, enhancing the service for London viewers.

MORE FROM TELETEXT

Teletext is to begin introducing changes to its service which by March 2000 will result in a substantial increase in sports pages, more travel pages, and additional news pages including an extra news page in each region.

These improvements are possible following government approval in March for Teletext to be allocated an extra 1.5 lines of VBI (Vertical Blanking Interval) capacity for Channels 3 and 4.

As well as agreeing Teletext's proposals for the use of its increased capacity, the ITC has also agreed to merge the separate education and employment categories in Teletext's licence into a single category. Although there will be no change in the total number of pages, this will allow more flexibility in providing information on technology and training matters.

ADULT SERVICE ADVERTISING REVIEWED

The ITC has agreed to allow advertising for premium rate services of a sexual nature to appear on encrypted elements of adult entertainment channels. Until now such services had been prohibited from advertising on television, owing to the ITC's general prohibition on the advertising of products or services concerned with pornography. A similar permission to advertise on adult entertainment channels has been in operation since 1 January 1999 for certain top-shelf magazines. Premium rate telephone services of a sexual nature are subject to regulation by the premium rate industry's own self-regulatory body ICSTIS.