1.1 PhonepayPlus delivers the day-to-day regulation of premium rate services (PRS) through a Code of Practice (the 'Code') approved by the Office of Communications ('Ofcom'). Under the Communications Act 2003 (the 'Act'), Ofcom can set conditions which specify which providers (and with respect to which services) must comply with directions made by PhonepayPlus. Ofcom can enforce a failure by any provider to comply with such directions. This is known as Ofcom's backstop powers. Ofcom has set the PRS Condition, which currently applies to a subset of Controlled PRS providers defined as Communications Providers.
1.2 On 1 September 2011 the PhonepayPlus Code of Practice (12th edition) (the 'new Code') will come into force. Under the new Code, PhonepayPlus will, for the first time, hold all Controlled PRS providers responsible for actions that are within their control. The shift in regulatory responsibility marked by the new Code, as well as the new rules governing the content/promotion/operation of PRS, were consulted upon extensively by both Ofcom and PhonepayPlus.
1.3 Ofcom signalled when approving the new Code that to ensure its successful implementation it would be appropriate to re-consider who should be legally required to comply with PhonepayPlus directions under the PRS Condition. This consultation proposes to amend the PRS Condition to mirror the regulatory remit of PhonepayPlus under the new Code. We are proposing that all Controlled PRS providers will now be subject to the PRS Condition, providing Ofcom with the power to require such providers to comply with enforcement directions made by PhonepayPlus.
1.4 We consider such an amendment to the PRS Condition to be necessary to ensure the successful implementation of the new Code. Widening the scope of the PRS Condition will strengthen the ability of PhonepayPlus to take enforcement action against those providers that fail to comply with sanctions imposed under the new Code.