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Published 18|07|07

1. Ofcom today publishes Richard Ayre's report on TV broadcasters' use of premium rate telephone services (PRS) in programmes. Ofcom welcomes the report and believes it makes a significant contribution in this area.

2. Ofcom's recent investigations into alleged compliance failures by broadcasters in the use of PRS have been and remain urgent and wide-ranging. A number of compliance issues have been raised with us over recent weeks. We have already published findings in two major cases of compliance failure – five's Brainteaser and the BBC's Blue Peter – in which fines have been imposed. The application of a fine to the BBC is unprecedented.

3. There are a number of other investigations on-going. These are being dealt with on a case-by-case basis and several of them will be concluded over the summer. These cases must be investigated thoroughly and, to ensure fairness, Ofcom must follow due process and give broadcasters the opportunity to make full representations.

4. Against this background, Richard Ayre has identified concerns about systemic problems in the way that broadcasters have used PRS in their programmes. Among other findings, the most striking is a widespread lack of understanding among major broadcasters of the viewers' interests as they become viewer-consumers interacting and conducting transactions.

5. Richard Ayre's main recommendation that broadcasters' licences be changed so that they attract clear and broad responsibility for the use of PRS – and other means of consumer contact – is a sensible and proportionate response to these concerns. Ofcom is minded to accept that recommendation and the proposal for a licence amendment for radio – both subject to consultation.

6. The proposed licence changes will contain requirements for independent audit by broadcasters of their PRS systems. This is because complaint-driven regulation cannot be relied upon to identify the sorts of problems with the handling of consumers' PRS interactions that have come to light recently.

7. The recommendation to amend licences will now be included in Ofcom's broader Participation TV (PTV) consultation. This will be published in the next few weeks.

8. The report's view is that PRS activity by broadcasters has probably peaked. We agree. But it will continue and other forms of pay interaction may emerge. For these reasons we believe Richard Ayre is right to recommend a widely drawn, future-proofed licence change.

9. The report also identifies issues of regulatory co-ordination and clarity. Ofcom will immediately seek to ensure that, in the near term, the regulatory arrangements with ICSTIS are as clear and effective as possible. Ofcom is also examining the overall effectiveness of the co-regulatory model in this area.

10. Ofcom and ICSTIS have agreed that in the light of Ofcom's forthcoming consultation on PTV, it would be premature for ICSTIS to form any conclusions about its recent consultation on prior permission for PRS used in TV and radio programmes. Ofcom and ICSTIS have further agreed to assess the responses to ICSTIS in the light of the PTV responses, and to work together to introduce a clear and effective regulatory framework which provides clarity and certainty to all stakeholders.

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