During the last 18 months there have been a number of high
profile cases surrounding misleadingly-advertised premium-rate
competitions and ringtone subscription clubs. However, in each of
the cases where ICSTIS (the Independent Committee for the
Supervision of Standards of Telephone Information Services) has
taken action, it has been the connectivity partner which has been
investigated and fined, rather than the provider of the service
itself.
There are around 30 connectivity partners in the UK serving
hundreds of content providers. The problem for the connectivity
partners, which act as technology intermediaries, is that they take
responsibility for the services of the content providers, often
without knowing the nature of the content or the trustworthiness of
the provider.
Now one of the biggest intermediaries, WIN plc, is campaigning
for reform.
Sally Weatherall, the head of WIN's legal department, explained
that the company enters into a contract with each client that
includes an indemnity. But she points out that that does not
eliminate WIN's risk when ICSTIS can levy fines as high as £250,000
per complaint. Companies like WIN do not want fines. Nor do they
want their names tarnished.
Weatherall says that clients generate up to two million
transactions every day over WIN's network. But often the first time
that WIN and its rival connectivity partners (such as mBlox, Opera
and MX Telecom) recognise that rules have been broken is when a
consumer or the regulator registers a complaint.
When they do, ICSTIS names and fines a company like WIN, which
can usually pay the fine out of revenues received from a mobile
operator such as Vodafone or Orange and destined for onward
transmission to the client. In addition to taking its service fee
(on average four pence per transaction), WIN can also hold back the
value of a fine, provided there are sufficient funds. Any shortfall
must be paid by WIN and it has to hope that its client can and will
honour the indemnity.
By adjudicating against and punishing connectivity providers for
the breaches incurred by content providers, WIN argues that ICSTIS
is failing in its duty of protecting consumers from dubious
services, and allowing rogue providers to hide behind a cloak of
anonymity.
And when connectivity partners disconnect content providers
operating rogue services, there is nothing to stop them moving on
to another connectivity provider who is oblivious to an
unscrupulous past. "We're limited in the due diligence we can
perform," said Weatherall. "Google searches and Dunn &
Bradstreet reports don't always tell you the whole story."
WIN fears that mobile content services run the risk of being
pigeon-holed with dialler and other premium rate rip-offs, thus
threatening the huge potential of the sector.
The company is calling for all content providers to be
registered with ICSTIS, together with a record of all of their
previous regulatory breaches in an easily searchable database on
the regulator’s website. While ICSTIS have made some moves towards
naming the rogue content provider the adjudications still state
that the connectivity provider rather than the content provider is
the culprit and liable under the Code. WIN describes this approach
as absurd.
WIN’s recommendation, therefore, is that the system goes one
step further by explicitly naming the content provider and holding
them out as being liable for the service that the content provider
markets and provides to consumers – this would better protect both
consumers, connectivity providers and the industry as a whole by
allowing easy identification of persistent offenders.
Ben King, Marketing Manager at WIN, said: "Whilst network
operators and connectivity providers are taking their
responsibilities towards consumers extremely seriously, there is
little we can do proactively to prevent rogue services from
operating over our networks because it’s almost impossible to
identify them until consumers begin to complain."
He said that the current framework lets rogue providers "hide
behind a cloak of anonymity, while connectivity providers bear the
financial burden and negative PR that accompanies
adjudication."
A simple database or ‘blacklist’ of offenders would help
everyone in the delivery chain, says King, protecting consumers by
giving those in the chain absolute visibility. "Without such steps
the huge potential growth of the mobile content industry could be
under serious threat," he warned.
WIN also argues that the current regulatory framework in mobile
content is too complicated – with content providers having to
adhere to several lengthy and complex codes of practice from both
network providers and regulators. King says that many providers of
legitimate content services are unintentionally breaking the rules
as a result. Again, this risks stifling the growth of the industry
for reputable content providers looking to market their
services.
As a result it has launched a guide to operating premium rate
services, aiming to educate mobile content providers on who the
regulators are, what codes they administer, how their codes are
enforced and by which major regulations content providers must
abide. The guide is available on request from www.winplc.com.
An ICSTIS spokesperson welcomed the guide from WIN but said some
of the company's other concerns have been addressed already or are
being addressed.
Media and publications officer Kate Belson explained that the
content provider will be named in adjudication reports when its
identity has been provided by the connectivity partner – once
ICSTIS has spoken to the named party to check that it was indeed
the content provider. If the content provider is unnamed or fails
to respond to ICSTIS, the connectivity partner is named. Belson
added that the facility to search adjudications by the name of a
content provider will be available soon at the ICSTIS website.
"We expect our service providers to do due diligence because
it's important for consumers to feel confident when using
premium-rate services," said Belson.
