It may not be fully operational yet, but new communications super regulator Ofcom is already showing it means business. It has published proposals for a radical shake-up of broadcast ad regulation in the UK. We report
Topic: Self regulation
Who: The Office of Communications ("Ofcom")
When: 27 October 2003
Ofcom, the new communications regulator from the end of 2003, launched a public consultation on the future regulation of broadcast advertising in the UK.
The Communications Act 2003 imposes a duty on Ofcom to consider effective forms of self regulation for its various functions, and the regulator is seeking views on its proposal to delegate the regulation of advertising on television and radio to a new industry co-regulatory body.
It is proposed that the new body should have responsibility for drawing up, reviewing and enforcing broadcast advertising codes subject to the approval of Ofcom.
The new body would operate under the banner of the Advertising Standards Authority ("ASA") which is currently the industry regulator for non broadcast advertising. Ofcom would retain backstop powers over the new system.
The Ofcom consultation document, "The Future Regulation of Broadcast Advertising" is available online. The closing date for responses is 9 January 2004.
The proposal is that the new system is funded by the industry. Following the non-broadcast advertising regulatory model, the idea is that advertisers pay a levy of 0.1% of their TV and radio advertising budgets to fund what will be two new broadcast divisions of the ASA. There will be the proposed complaints adjudication body, "ASA Broadcast" and the"Broadcast Committee of Advertising Practice", which will administer the codes. The Broadcast Advertising Board of Finance will handle the cash. Together they are expected to cost between £3.5million and £4million a year. One assumes that this equates to the sum which Ofcom itself will be saving by not having to employ staff to carry out these duties.
So far as enforcement is concerned, the new "co-regulator" will be expected to have appropriate measures in place to enforce its decisions, for instance requiring advertisers to amend advertising, to restrict broadcasts to certain times of day or to remove ads permanently from air.
Ofcom would make it a broadcasting licence condition that radio and television licensees complied with directions from the new co-regulator. This would ensure that the co-regulator had the teeth to take effective and rapid action against advertisers that breached the Code. Furthermore, if a licensee's failure to comply with the requirements of the Code were sufficiently serious (for example a major breach, repeated Code breaches, ignoring the co-regulator's directions etc) the co-regulator could ask Ofcom to impose a formal sanction. Ofcom has the power to fine broadcasters who either persistently or seriously breach the Codes or, in extreme cases, to revoke their licences to broadcast.
So far as the current pre-vetting system of all broadcast advertising is concerned, there were some initial fears that this would be swept away. This is not the case. All the indications are that the broadcasters will continue to pre-vet their advertising by way of the Broadcast Advertising Clearance Centre for TV and the Radio Advertising Clearance Centre for radio.
The Ofcom board expects by February 2004 to make a decision on whether to proceed with these proposals, and it anticipates that if the green light is given, there could be full implementation by June 2004.
Why this matters:
The proposals certainly have their attractions. Between January and July 2003 the ASA referred no less than 1,898 television complainants to the ITC. It has also transferred 622 radio complainants to the Radio Authority. In keeping with the increasing convergence of the broadcast, electronic and printed media, the ASA would become a "one stop shop" for the consumer for all advertising content regulation across all conventional media.
It is interesting that one of the questions that Ofcom raises in its consultation document is whether there will be additional costs, or costs savings, for the broadcast and advertising industries as a result of the proposed changes. The immediate answer is that yes of course there will be increased costs by way of the new broadcast advertising levy. Whether there will be equivalent savings in the long run by way of advertisers and broadcasters having to spend less time with the regulators is another question. This is not to say that Ofcom will entirely lose its direct involvement in elements of advertising regulation. Areas such as the absolute amount of TV advertising, some aspects of TV and radio sponsorship policy and a number of other related issues will remain within its direct remit.
The proposals have so far received a generally positive response, although MP Debra Shipley (currently conducting a fight to toughen the rules on advertising to children) has expressed fears that handing control of the codes and the complaints process to an organisation funded by the ad industry will make life far too easy for advertisers.
Ms Shipley's concerns are not borne out by the historical evidence in terms of the performance to date of the non broadcast advertising control system. The ASA has, if anything consistently taken a tougher view on advertising control matters than the courts or the ITC.