PhonepayPlus may have changed its name, but Ofcom remains to be convinced that it has changed its spots. The communications regulator is consulting on “PPP”‘s continuing role and how consumers might best be protected in this increasingly active area. Anna Montes dials in.
Topic: Telecoms
Who: Ofcom and PhonepayPlus
When: May 2009
Where: United Kingdom
Law stated as at: 1 June 2009
What happened:
On 15th May 2009, Ofcom published its "PRS Scope Review" which is a consultation exercise aimed at assessing the extent to which the current premium rate services ("PRS") regulatory regime meets the needs of consumers. Ofcom is keen to provide appropriate levels of consumer protection while also supporting the ever-changing PRS industry in the UK. At present, PRS services are regulated by PhonepayPlus ("PPP") on a day-to-day basis but with Ofcom retaining overall responsibility for such services. Ofcom believes the PRS industry has changed greatly over the last decade due to:
- an increase in mobile phone usage in the UK (which has led to a strong increase in mobile PRS usage and therefore complaints about such services);
- an increase in the number of communication providers and the number ranges on which PRS are offered (which Ofcom believes has led to a more complex and fragmented market for consumers to get to terms with); and
- a lack of clarity in the market as to which services are actually captured by PRS regulation.
Ofcom wants to ensure the current PRS regulatory regime meets the needs of consumers, as it believes that in the absence of effective regulation consumers may be unable to make an informed decision prior to the purchase of a PRS, dissuaded from seeking redress when things do go wrong, and exposed to offensive or inappropriate content. Ofcom has therefore created an analytical framework for examining PRS, and it shall consider both the current regulatory framework and the responses it receives to its consultation exercise to determine whether it remains appropriate for new PRS to just be reviewed as and when they emerge onto the marketplace.
Ofcom believes that there are gaps in the regulatory framework that may need to be addressed, particularly where matters such as price transparency and complaints procedures are concerned. Furthermore Ofcom wants PRS suppliers to be empowered to act responsibly. Therefore based on evidence from market research it has conducted and independent studies into potential consumer harm Ofcom has identified, it proposes the following specific actions upon which it is now consulting:
| Target area | Options |
| 1. Facilitating consumers to make informed decisions | a. Carry out a study into the implications of introducing pre-call announcements for PRS; b. Require every PRS advertisement to contain, in addition to the BT price, the maximum price that may be charged by a communications provider, including the name of that provider. |
| 2. Facilitating effective consumer redress | a. PhonepayPlus to expand their number checker so that consumers can more easily identify the service provider for services for which they have been charged; |
| 3. Empowering PRS suppliers to act responsibly | a. PhonepayPlus to introduce a registration scheme / reputational database in order for parties in the PRS supply chain to find out information about potential and current partners down the PRS supply chain; b. Carry out an analysis of the market for call barring facilities in order to assess the availability and functionality of call barring. |
The PRS industry and all other interested parties have until 24th July 2009 to provide Ofcom with their comments on this framework and the options proposed by Ofcom.
Why this matters:
For some, there has been much speculation over the role that PPP should play alongside Ofcom. Some players within the mobile industry question the frequent consultations with regard to PPP's role and remit and feel that PPP can sometimes exceed its remit. We will have to wait and see whether this latest consulting exercise causes any ripples within the mobile and premium rate services sectors.
Anna Montes
Senior Associate
Osborne Clarke, London
anna.montes@osborneclarke.com
