Review of Premium Rate Services - An application of the analytical framework

Since the publication of the PRS Scope Review Statement in October 2009, mobile communications providers ("MCPs") have asked Ofcom to assess whether certain types of premium rate services ("PRS") require specific PRS regulation. In particular, PRS bought using the payment mechanism, Payforit, as well as fixed and mobile portal content services charged to the customers phone bill.

The PRS Scope Review Statement contained an analytical framework that can be used to analyse a particular form of PRS to assess whether it should be subject to PRS regulation because of the potential risk of consumer harm. This framework looks at the demand and supply side characteristics of the service and assesses the extent to which this may lead to a risk of consumer harm.

This consultation document applies this analytical framework to both fixed and mobile portal content services, where those services are charged to the customers phone bill, and to PRS bought using Payforit and assesses the extent of the risk of consumer harm occurring absent current regulation.

We then consider whether:

• Option 1: these services should fall within Controlled PRS regulation and should be actively regulated by PhonepayPlus ("PP+"), or
• Option 2: these services should be removed from the Controlled PRS definition, and therefore not be regulated by PP+, but rely on self-regulation.

This assessment looks at the impact of these options on consumers, MCPs, fixed providers and service providers.

Our proposals are:

• to adopt Option 2 for both fixed and mobile portal content services, and
• to adopt Option 1 for PRS bought using Payforit. However, we would welcome inputs from all stakeholders on whether there are assurances that MCPs might provide that could be sufficient for Ofcom to consider whether Option 2 would be appropriate.

We have included proposed changes to the PRS Condition to accommodate these preliminary proposals, in particular the definition of "payment mechanism".