MEF Welcomes New Proposals from UK Regulator & Champions Regulatory Insight for Membership

MEF has announced industry briefings and the launch of a global regulatory database as PhonepayPlus (PpP), the independent UK regulator for premium rate services, issues its most important Code consultation yet.

One of the most significant proposals in the consultation is the distribution of regulatory responsibility along the value chain, including content businesses that market directly to consumers. To date, PpP has only been able to pursue the aggregator which typically does not promote or control the content sold to the consumer, rather than targeting companies directly responsible for causing consumer harm.

In order to ensure this new approach works in practice, there is a proposed mandatory registration scheme for all parties in the premium rate value chain. This registration scheme has clear advantages: PhonepayPlus will link its adjudications to businesses and their directors, so that companies can carry out due diligence on their partners and, as a result, rogue providers should find it very hard to operate in the UK premium rate industry.

Suhail Bhat, MEF’s Policy & Initiatives Director, commented: “We welcome the fresh approach taken by PhonepayPlus with a focus on future proofing and a recognition that the mobile industry is constantly evolving. However there remain unanswered questions such as the definition of a premium rate service. In a world where content and services can be accessed and purchased on multiple devices, convergence is an increasingly disruptive force on legal definitions. We will be seeking clarity on the criteria determining which services will fall under the remit of PpP and its Code.”

The consultation closes on 8 July and MEF is hosting two events to gain maximum industry input and feedback for the regulators. See below for further details and how to register.

Rimma Perelmuter, MEF Executive Director, added: “Codes of practice for the mobile media industry vary hugely from country to country. To assist our members navigate the complexities of global regulation and the numerous Codes that impact their business strategies and bottom line, MEF has launched a Regulatory Information Service Centre (RISC). RISC includes the latest on the UK situation and currently covers 24 other countries. This online archive will provide a one-stop solution for information on the regulations applicable at a local, regional and international level, including access to MEF guidance documents; links to third-party sources for further reading; as well as relevant regulatory contact details.”

For more details on RISC, please go to: http://www.m-e-f.org/policy_regulation/risc/

6th May 2010: Webinar on the proposed registration scheme
Simon Bates, Director of Standards and Communications at PpP, will explain the objectives, principles, governance and cost of the Registration Scheme
http://www.m-e-f.org/policy_regulation/phonepayplus/webinar_ppp_registration_scheme/#c2574

19th May 2010: Live workshop on the PpP Code consultation hosted by Denton Wilde Sapte
http://www.m-e-f.org/policy_regulation/phonepayplus/live_workshop_ppp_new_code_consultation/
On hand to explain the proposals will be Bradley Brady, Director of Strategy & Stakeholder Relations at PpP, with Mark Collins, PhonepayPlus Policy Advisor.

MEF regulatory workshops offer platform for industry consultation

MEF are holding our third regulatory workshop on Tuesday 21 July in London. PhonepayPlus will be presenting at this interactive session in an active step to seek industry input and feedback on the pre-consultation discussion paper (PDF download) for their 12th Code.

Dubbed “the most significant revision in the organisation’s 23-year history”, the phone-paid services UK regulator is asking for substantive comments by 1 August, although the discussion will be ongoing as the formal consultation will not kick off until the Autumn.

Following hot on the heels of MEF’s workshops on the CAP/BCAP Code and Ofcom Scope Review, the session will be hosted by international law firm and MEF member Denton Wilde Sapte and is open to all MEF members. Head of Industry Support & Policy at PpP, Mark Collins, will be presenting and taking Q&A.

PhonepayPlus 12th Code Pre-consultation

Date: Tuesday 21 July

Time: 9am – noon

Venue: Denton Wilde Sapte, One Fleet Place, London EC4M (Google Map)

“We now have a great window of opportunity to work with PhonepayPlus and Ofcom to ensure that the current regulatory regime evolves to meet the needs of consumers while also supporting an innovative and dynamic mobile entertainment industry.”

Suhail Bhat, Policy and Initiatives Director, MEF

“The development of a new Code of Practice is one of the most important activities that we undertake to ensure consumer protection in an ever-changing market. We welcome the opportunity to participate in industry discussions, such as MEF’s workshop, to ensure we’re canvassing the widest possible cross section of the industry. I very much look forward to next week’s session.”

Mark Collins, Head of Industry Support & Policy, PhonepayPlus

But be quick! Spaces for these workshops are extremely limited - please contact Sarah Roberts if you would like to attend. For more information about regulatory issues contact Suhail Bhat or visit our website.

PhonepayPlus Forum – A Report

Yesterday PhonepayPlus (PpP) held its quarterly Forum to report back on industry developments and to start garnering views on its proposed 12^th Edition of the Code of Practice. It was a good, productive Forum and the PpP proposals sparked considerable and positive debate. I sensed a real desire from both PpP and the industry to consider significant changes to the way paid for services are regulated.

There are four main changes set out in the PpP discussion paper:

• That the new Code could be a more goal based rather than being overly prescriptive
• That more than one company in the value chain will assume an appropriate degree of responsibility for the provision of compliant services
• That there could be the creation of a database on which all service providers and information providers will be registered for due diligence and risk management purposes
• That providers must have in place adequate customer care facilities to ensure consumers are able to register a complaint and seek redress.

None of these proposals are quick and easy wins but then nothing worthwhile is ever easy. They will require significant consideration and thought on how the proposals will apply in practice. For example, having a more goal based Code is certainly easier to manage in the fast changing mobile media industry. However, many service providers want absolute confidence that services are complying with the Code and this can only really be achieved by prescribing exactly what needs to be done and by which party in both the advertising and operation of a phone paid service.

I welcome the opportunity to work with both the regulator and our members on how responsibility for compliance can practically be applied to the culpable parties. This has long been a source of contention – aggregators are often found in breach of the Code for services and advertising they are not responsible for. In practice this challenge is going to be difficult. It will require careful planning and possible wholesale changes to the way cases are investigated, reported on and appealed. It could increase regulatory costs and the length of time to investigate a case to a successful conclusion. However, it is of fundamental importance that the culpable parties are held accountable so I relish the opportunity to work with our members to ensure processes are put in place that deliver on these promises.

It was a positive Forum and I look forward to ensuring that the regulatory regime moving forwards is good for the industry, the regulators and, of course, the consumers.

MEF is holding its meeting on the Scope review on Friday 10^th July from 9am to 12.00 to discuss the Ofcom Scope Review which will have a direct impact on the PpP consultation. Soon after, we will host a meeting on the PpP discussion document.

For further information, please contact me.

- Suhail Bhat, Policy & Initiatives Director, MEF

MEF responds to latest mobile services complaint figures released by PhonepayPlus in the UK

MEF warmly welcome the mobile services complaints figures released today by PhonepayPlus, one year on from the introduction of new rules following its 2008 Mobile Review. The fact that total complaints regarding mobile services are down by over half since June of last year is wonderful news for mobile entertainment and reflects the hard work MEF and the wider industry has undertaken to increase transparency and improve the consumer’s experience. The findings are mirrored in the Consumers and Convergence study recently undertaken by KPMG in association with MEF, in which we found that consumer satisfaction with mobile music services had grown globally from 26% in 2007 to 66% in 2009.

Consumer trust in mobile services underpins the future success and growth of the mobile entertainment industry. It is encouraging to see that this trust is on the rise and to observe the impact that this is having on the companies offering these services. In the most recent MEF Business Confidence Index, compiled by KPMG, the organisations in the mobile entertainment value chain surveyed were confident that their business would continue to grow despite the current economic downturn, predicting an average revenue growth of 28% over the next year.

- Suhail Bhat, Policy & Initiatives Director, MEF

MEF Responds to the CAP/BCAP Code Consultations

Over the last few weeks, we have been working closely with MEF members in the UK drafting a response to the proposed changes to the Code of Advertising Practice (CAP) and Broadcast Code of Advertising Practice (BCAP) in the UK. A cornerstone of the better regulation strategy and implementation is the five principles of good regulation which state that any regulation should be transparent, accountable, proportionate, consistent and targeted.

I am becoming increasingly concerned that the mobile media industry is being subject to a record number of significant reviews. As the CAP/BCAP consultations show, there are clear overlaps in jurisdiction between different regulators covering the same or differing aspects of content and advertising for mobile media services. These overlaps and lack of clarity as to which regulations apply and when, or by which regulator, clearly go against the better regulation principles. This is evidenced by the fact that some proposed changes to the CAP/BCAP Codes seem to clash with the PhonepayPlus Code. Any such ambiguity is likely to cause serious regulatory uncertainty and as a consequence, the regulatory burden on MEF members runs the serious risk of becoming disproportionate. The mobile media industry has already been subject to considerable scrutiny through the PhonepayPlus “Mobile Phone-Paid Services and their Marketing” consultation which imposed prior permission for certain mobile services. Ofcom is currently consulting on its premium rate services scope review, we will have a new regulator for all audiovisual services soon and PhonepayPlus is planning to consult on its Code in September. All this in a short 12 month period. While I’m not saying that the industry does not need to be regulated, regulation should not be an impediment to the innovative services that consumers find attractive.

The CAP/BCAP reviews are very thorough and I certainly would like to commend and congratulate them for the time and effort they took to look at their respective Codes. However, there is still much work to be done. Ofcom, PhonepayPlus, the Office of the Information Commissioner, CAP/BCAP/ASA, the DCMS and other bodies with a regulatory function really need to meet to discuss the clear demarcation of their jurisdictions and the applications of their Codes. In terms of our response to the CAP/BCAP Codes, we propose:

• That the Codes can be more goal based. They currently contain a long list of provisions that highlight misleading practices that can be incorporated in supplementary guidance to the Codes rather than being in the Codes themselves.
  
• A clarification in the ambiguity caused by certain proposed provisions – particularly the difference of emphasis in the wording of the children’s provisions set out in the CAP/BCAP Codes. In fact the CAP and BCAP Code implement the same legislation in different ways in the Code.
  
• Clear guidance should be provided to cover those situations where there is regulatory overlap. If the complaint relates to premium rate services, then PhonepayPlus should investigate, if it relates purely to advertising, then the ASA should investigate and if it is an issue of data protection and privacy, then the information commissioner should take the lead.

To get involved with MEF and our regulatory work, please contact Suhail for more information. To view our responses, please go to the following links:

CAP

http://www.m-e-f.org/fileadmin/user/Suhail/Regulatory/Microsoft_Word_-_CAP_Code_Response_MEF.pdf

BCAP

http://www.m-e-f.org/fileadmin/user/Suhail/Regulatory/BCAP_Code_Response_MEF_FINAL.pdf

MEF response to PhonepayPlus consultation

Suhail Bhat, policy and initiatives director at MEF, has outlined his initial thoughts on today's announcement from UK regulator PhonepayPlus: 'New measures for mobile phone-paid service and their marketing':

“MEF welcomes the sentiment of today’s PhonepayPlus (PpP) consultation on mobile phone-paid services. Our members support measures that promote transparency for consumers without hindering their access to and enjoyment of mobile services. It is encouraging that so many consumers are using phone-paid services, nearly 50% according to the PpP consultation document.

Our main concern is that the proposals appear to collectively punish the majority of content providers by creating a layer of red tape without actually addressing a small number of rogue elements that persistently mislead consumers.

We believe that all forms of non-compliance and consumer harm should be dealt with immediately and we would have liked elements of the new rules to allow for consumer complaints to be resolved more quickly. While we are still studying the changes, at this stage we are not convinced that the new regulations achieve anything that wasn’t possible under the previous Code of Practice.

However, we will be studying the consultation further following discussions with our members and working with Denton Wilde Sapte LLP to produce a guide to its implications for MEF members.”

Suhail Bhat, policy and initiatives director, MEF

Initial points:

Concentrating on Subscription Services

• Prior permission is restricted to services that will cost more than £4.50 per week
  
• While we understand why PpP has introduced the prior permission regime, this arbitrary threshold does not add extra protection
  
• The harm is not caused by the weekly charge or the joining fee but by a failure to provide sufficiently clear information about the costs and conditions associated with using the service (transparency issue)
  
• The requirement for prior permission will not affect the minority of companies that cause consumer harm and they are unlikely to be deterred by this threshold. This is a collective punishment approach for an entire industry where the vast majority of service providers comply with the existing Code requirements.
  
• Some companies may simply drop the weekly charge to £4/week to escape the need for Prior permission. This does not help the industry nor does it provide the greater clarity of information sought by PpP

Double Opt-in requirement

• Only those service providers that need to apply for prior permission need to comply with the double opt-in. This creates an un-level playing field for the industry
  
• At £4.50/week you need to have a double opt-in and yet the same service/content charged at £4/week does not need permission and does not to have double opt-in
  
• This does not seem to provide for a more transparent and user friendly consumer experience
  
• PhonepayPlus recognises that most phone-paid services are spontaneous, low-cost and provide users with instant gratification. Having a double opt-in seemingly undermines these attractions