Draft Determination: Controlled Premium Rate Services - 12 October 2001



	Draft Determination: Controlled Premium Rate Services



			Contents Summary Draft Determination Explanatory Memorandum Consultation Annex A: Draft Merged Code of Practice Summary S.1 This document contains a draft determination relating to the provision of Controlled Premium Rate Services under sub-paragraph 22.5 of the proposed Condition 22 of all Public Telecommunications Operator ("PTO") licences and under sub-paragraph 26.5 of the proposed Condition 26 of the class licences to run branch systems to provide Telecommunications Services ("TSL") and to provide International Simple Voice Resale Services ("ISVR"). S.2 The effect of the determination under the above-mentioned sub-paragraph 22.5 and 26.5 will be to recognise a code of practice governing the provision of Controlled Premium Rate Services. S.3 It should be noted that the making of the final determination will, of course, be subject to the outcome of the statutory public consultation, and whether the proposed modifications are finally made to PTO licences, and the TSL and ISVR licences successfully revoked and regranted. Accordingly, the consultation on the draft determination should not be taken to fetter the Director General’s discretion as to the making of the proposed modifications themselves, nor the Secretary of State’s discretion as to the revoking and regranting of the TSL and ISVR licences. DRAFT DETERMINATION RELATING TO THE PROVISION OF CONTROLLED PREMIUM RATE SERVICES UNDER SUB-PARAGRAPH 22.5 OF THE PROPOSED CONDITION 22 OF ALL PUBLIC TELECOMMUNICATIONS OPERATOR ("PTO") LICENCES AND UNDER SUB-PARAGRAPH 26.5 OF THE PROPOSED CONDITION 26 OF THE CLASS LICENCES TO RUN BRANCH SYSTEMS TO PROVIDE TELECOMMUNICATIONS SERVICES ("TSL") AND TO PROVIDE INTERNATIONAL SIMPLE VOICE RESALE SERVICES ("ISVR") WHEREAS: (A) the Secretary of State for Trade and Industry (the "Secretary of State") has granted under section 7 of the Telecommunications Act 1984 as amended by the Electronic Communications Act 2000 (the "Act") the following licences: all those licences granted to particular persons for the running of telecommunications systems which the Secretary of State has designated by order under section 9 of the Act as public telecommunications systems, which shall be taken to include licences granted to British Telecommunications plc (see S.I. 1999 No. 2453), Kingston Communications (Hull) PLC (see S.I. 1999 No. 2455) and any other persons operating under the fixed voice telephony and international facilities operator licences (see S.I. 1999 No. 2451), the cable and local delivery operator licences (see S.I. 1999 No. 2454), and the mobile licences (see S.I. 1999 No. 2452), and any other such licences granted after the coming into force of this Determination and the aforementioned Regulations and subject to substantially the same terms and conditions as the aforementioned licences (the "PTO licences"); the Class Licence to run Branch Systems to provide Telecommunications Services granted on [note: date of grant to be inserted when known as this new Class Licence is currently being consulted upon by the Secretary of State - see notice under section 7(12) and (13) of the Act on 1 October 2001] (the "TSL"); the Class Licence to run Branch Systems to provide International Simple Voice Resale Services granted on [note: date of grant to be inserted when known as this new Class Licence is currently being consulted upon by the Secretary of State - see notice under section 7(12) and (13) of the Act on 1 October 2001] (the "ISVR"); (B) Condition 22.1 of the PTO licences provides that the Licensee may only provide a Controlled Premium Rate Service in whole or in part by means of the Applicable Systems where the Relevant Condition is satisfied; (C) Condition 22.2 of the PTO licences provides that the Licensee may only provide a telecommunication service to another person by means of the Applicable Systems by means of which that person (i.e. the service provider), to the knowledge of the Licensee, provides a Controlled Premium Rate Service where the Relevant Condition is satisfied; (D) Condition 22.3 of the PTO licences provides that the Relevant Condition is that there is in effect, at the time the Controlled Premium Rate Service concerned is provided, a code of practice governing the provision of such a Service, which has been recognised by the Director General of Telecommunications (the "Director General") for the purposes of that Condition after certain specified consultation; (E) Condition 22.4 of the PTO licences provides that a code of practice shall only be recognised for those purposes if the Director General is satisfied that: its provisions are capable of properly regulating the provision of the Controlled Premium Rate Services to which it relates and, without prejudice to the generality of the foregoing, which provisions may include adequate provision for compensating those who suffer as a result of the provision of such Services or any description of such Services; and adequate arrangements have been made for the constitution of a body of persons to apply and administer the Code; (F) pursuant to Conditions 22.6 of the PTO licences, the Director General may recognise a code of practice in relation to any description of Controlled Premium Rate Services or to all Controlled Premium Rate Services; (G) Condition 26 of Schedule 1 to the TSL and the ISVR licences makes provision in terms identical for the purposes of this determination to those made by Condition 22 of the PTO licences, as set out above; (H) the Director General is satisfied that the provisions of a code of practice to be issued by the Independent Committee for the Supervision of Standards of Telephone Information Services ("ICSTIS"), which is annexed to this draft determination, are capable of properly regulating the provision of all Controlled Premium Rate Services and that adequate arrangements have been made for the constitution of a body of persons to apply and administer the Code (that body being ICSTIS); (I) in making this determination, the Director General has taken into account representations and observations received as part of the consultation process, and the matters described in the Explanatory Memorandum to this draft Determination; and NOW, THEREFORE, THE DIRECTOR GENERAL, PURSUANT TO CONDITION 22.5 OF THE PTO LICENCES AND CONDITION 26.5 OF THE TSL AND ISVR LICENCES, HEREBY DETERMINES THAT: 1. The code of practice to be issued by ICSTIS, which is annexed to this determination, is recognised for the purposes of Condition 22.3 of the PTO licences to govern the provision of all Controlled Premium Rate Services as defined in Condition 22.11(a) of the PTO Licences, and is also recognised for the purposes of Condition 26.3 of the TSL and ISVR licences to govern the provision of all Controlled Premium Rate Services as defined in Condition 26.11(a), with effect from [time] today, [date]. DAVID EDMONDS DIRECTOR GENERAL OF TELECOMMUNICATIONS 12 OCTOBER 2001 EXPLANATORY MEMORANDUM E1. The Director General of Telecommunications (the "Director General") issued a Notice commencing a statutory public consultation on proposed modifications to the PTO licences in accordance with section 12(2) of the Act on 14 September 2001. The proposed modifications were to insert a new Condition 22 into the PTO licences and to make minor drafting changes to Condition 23. E2. On 1 October 2001, the Secretary of State for Trade and Industry (the "Secretary of State") issued a Notice commencing a statutory public consultation on the proposed revocation and re-grant of the class licences to run branch systems to provide Telecommunications Services ("TSL") and International Simple Voice Resale Services ("ISVR") to insert a new Condition 26 in identical terms to that of Condition 22 of the PTO licences (and to make minor drafting changes to Condition 27 of the TSL and ISVR licences). E3. The new Condition 22 would widen the definition of what type of premium rate services ("PRS") might be caught by replacing the current definition of ‘Controlled Services’ with the definition of ‘Controlled Premium Rate Services’. In broad terms, only live PRS are currently caught by the former definition. As a result, there is no code of practice governing the provision of PRS other than live PRS (such as recorded PRS) that can be recognised by the Director General. E4. The reason why the Director General is making the above-mentioned proposal is to strengthen the regulatory regime in the PRS industry, so that the provision of a potentially larger category of PRS (other than simply live PRS) could be governed by a code of practice recognised by the Director. In this way, the Director General will have more ‘backstop’ powers to require network operators to cut off such services that are not complying with the code of practice administered by the Independent Committee for the Supervision of Standard of Telephone Information Services (ICSTIS) following it making such a request to the Director General, if the Director General considers it appropriate to make such a direction. E5. The text of the proposed modifications and their effects are set out in full in the Oftel Statement entitled ‘Regulation of Premium Rate Services: Licence Modification’, which was published on 24 July 2001. The document is available via Oftel’s website www.oftel.gov.uk). E6. The Director General is now issuing a draft determination under sub-paragraphs 22.5 and 26.5 of the PTO licences and the TSL and ISVR licences, respectively, in order to commence the consultation process. If the proposed modifications are finally made to the PTO licences, and the TSL and ISVR licences successfully revoked and regranted, the Director General is then able to make the final determination under Condition 22.5 of the PTO licences, as well as under Condition 26.5 of the TSL and ISVR licences, to recognise a code of practice governing the provision of Controlled Premium Rate Services. E7. The making of the final determination will, of course, be subject to the outcome of the respective statutory public consultations and whether the proposed modifications are finally made to the PTO licences, and the TSL and ISVR licences successfully revoked and re-granted. The consultation on this draft determination shall not be taken to fetter the Director General’s discretion as to the making of the proposed modifications themselves, nor the Secretary of State’s discretion as to the revoking and regranting of the TSL and ISVR licences. The Draft Determination E.8. ICSTIS supervises the promotion and content of PRS on behalf of the telephone companies through two codes of practice at present – a ‘General Code’ which is a voluntary arrangement and covers most PRS; and a ‘Live Code’ which covers live PRS and must be recognised by the Director General. This model of self-regulation has been historically successful, and a good example of effective industry regulation in action. E.9. In the event that the draft determination under the proposed sub-paragraphs 22.5 and 26.5 of the PTO licences and the TSL and ISVR licences, respectively, is made final, a new merged ICSTIS Code of Practice to replace the current separate codes would be recognised by the Director General. The new Code of Practice would cover both live and non-live PRS. E.10. The Director General notes that the new Code of Practice, annexed to this draft Determination, is designed to set and maintain standards for PRS, inter alia: provisions aimed at ensuring the legality, decency and honesty of PRS; rules on promotional material, advertising and tariff transparency of PRS; and provisions relating specifically to live services, and other services such as children’s services and sexual entertainment services. E.11. The Director General notes in addition that the new Code of Practice now incorporates additional conditions and consumer safeguards which have been included to cover the re-introduction of Chatline Services. Previously, no code was recognised by the Director General for Chatline Services, since he revoked his recognition of one of ICSTIS’s previous codes on 6 April 1992 insofar as that governed the provision of Chatline Services. However, the Director General notes that ICSTIS has been working with representatives of the PRS industry to examine the possibility of re-introducing Chatline Services, and the additional conditions and safeguards comprise, inter alia: tariff ceilings of 60 pence; forced release measures with call spending limited to £30.00; and robust compensation arrangements which have been set up to underpin the safeguards offered by the Service Provider Bonds. E.12. In the light of this the Director General is satisfied that the provisions of ICSTIS’ new Code of Practice, which is annexed to this draft determination, are capable of properly regulating the provision of all Controlled Premium Rate Services, including Chatline Services, and that adequate arrangements have been made for the constitution of a body of persons to apply and administer the Code (that body being ICSTIS). E13. Accordingly, the Director General proposes, in the event that the proposed modifications to the PTO licences are made, and in the event that the TSL and ISVR licences are revoked and regranted to include a new Condition 26, to recognise the Code for the purposes of the proposed Condition 22.3 and 26.3. E14. The ICSTIS Code of Practice annexed to this Determination supersedes the Live Conversation Services Code of Practice of the ICSTIS, last recognised by the Director General on 19 January 1998, and effective from 9 March 1998, together with the ICSTIS Code of Practice Eighth Edition (March 1998, revised 15 February 1999). Consultation C1 The draft determination relating to the provision of Controlled Premium Rate Services under sub-paragraph 22.5 of the proposed Condition 22 of the PTO licences, and sub-paragraph 26.5 of the proposed Condition 26 of the TSL and ISVR licences are being made available in this document to all licensees and interested parties, together with the Director General’s reasons, so that they may have a reasonable opportunity to make representations. Having considered any such representations, the Director General will, if appropriate, make the determination and will notify the licensees and interested parties of that determination and his reasons for making it. Any representations should be sent to: Gavin Daykin Oftel 50 Ludgate Hill London EC4M 7JJ Telephone: 020 7634 5338 Fax: 020 7634 8784 e-mail: gavin.daykin@oftel.gov.uk C2 Further copies of this consultation document can be printed from Oftel’s website. Paper copies may also be obtained from Oftel’s Research and Intelligence Unit. Oftel has arrangements in place with organisations providing transcription services, and large print, Braille and audio cassettes can be made available on request. Copies are also available on computer disc so that stakeholders without Internet access may create their own large print copies. C3 Representations must arrive at Oftel no later than 9 November 2001. All non-confidential representations will be published. If any part of your representation is confidential, and not for publication, please include this in a separate annex and ensure that it is clearly marked as confidential. In the interests of transparency, please avoid confidentiality markings wherever possible. It would be helpful if representations could be delivered by e-mail. However, copies may also be posted or faxed to the address above. If any stakeholders are unable to supply their comments in one of these ways they should contact Gavin Daykin to discuss alternatives. C4 Oftel does not plan on this occasion to allow a further period during which observations may be made on the representations made by others. Nevertheless, in the interests of transparency, all non-confidential representations will be published. C5 Representations will be accessible via a link created on the title page of the electronic text of this document. This can be found in the Publications section of Oftel’s website under the classification Licensing and Enforcement Actions. Paper copies of representations will also be made publicly available in Oftel’s Research and Intelligence Unit. Appointments to view written comments in this way, which must be made in advance, may be arranged by phoning: 020 7634 8761 (fax: 020 7634 8946). Annex A DRAFT MERGED CODE OF PRACTICE – 12 OCTOBER 2001 This document is available as a .pdf to download: (126 kb)