ICSTIS (Independent Committee for the Supervision of Standards
of the Telephone Information Services) currently regulates premium
rate telephone services and receives its authority from Ofcom,
which delegates the work to it. Though withdrawing that authority
from ICSTIS is not thought likely, Ofcom has stressed that it is
conducting a fundamental review that will look at the very basis of
Ofcom and ICTSIS's co-regulation.
"In light of increasing convergence in the communications sector
and the growth of PRS as a micro-payment mechanism, Ofcom considers
that the time is right for a first principles examination of the
role, structure and application of regulation in this area," said
Ofcom.
"Ofcom undertook a review of the effectiveness of the PRS
regulatory regime in 2004," it said."That review identified a
number of problems with the regime, and while Ofcom did not believe
it necessary at that stage to move away from the current self- and
co-regulatory approach, it developed and subsequently implemented a
package of recommendations to improve the effectiveness of PRS
regulation within the existing framework."
ICSTIS says that it does not believe that it will be stripped of
its regulatory role. "It's not a review of ICSTIS, it's a review of
what ICSTIS regulates and how it is regulated," said ICSTIS
spokesman Rob Dwight. "Ofcom just asked us to take on the
regulation of 0871 numbers from January 2008 so it would seem
illogical for them to ask us to take it on if they didn't want
ICSTIS to carry on regulating everything else."
One element of regulation which Ofcom says it will look at is
whether or not the regulator's activities should be more focused on
just the rule breaking companies. "In Ofcom's terms of reference it
looks at the allocation of resources in terms of our activity,"
said Dwight. "We think resources should be concentrated on the
parts of the market that cause the greatest harm, we have always
said that we should concentrate on the small parts of the market
that cause harm and leave the other people alone, apply a light
touch regulation to them."
Premium rate number scams often emerge and ICSTIS rules on them
and publishes its decisions. It can levy significant fines on the
technical service providers who register with ICSTIS, and the
service providers must then recoup that cost from the content
providers behind the actual service.
Ofcom said that the review was partly instigated by the fact
that premium rate numbers are used more than ever as a payment
mechanism for all sorts of goods or services. In these cases
customer are asked to phone a very expensive phone line for a fixed
amount of time in order to pay for goods or services.
"Premium rate has been a payment system for 20 years since it
was first introduced in 1986. For small sums like £1.50 people
don't want to get their debit cards out," said Dwight, who
recognised that this was a growing trend. "The growth in it being
used as a payment system is a sign of success and of the stability
of the regulation for the last 20 years."
Ofcom will investigate whether PRS prices are clear; what action
consumers who feel they have been ripped off can take; the
flexibility of regulation; how many types of firms are covered by
regulation; the feasibility of a service provider registration
scheme, and whether there is too much overlap between ICSTIS's work
and that of other regulators.
