Summary
Background
1.1 In June 2009 Ofcom published a consultation entitled Audience Participation in Radio Programming the use of premium rate services in radio: the options for improving consumer protection (the 'June 2009 consultation'). In that consultation we assessed the methods used by radio stations to encourage listener participation in broadcasts, via on-air competitions and phone-in programming. In particular, we examined the means by which listeners responded to calls to action in radio programming, including premium rate telephony services ('PRS') such as short message services ('SMS').
1.2 The use of PRS by broadcasters and competition mismanagement generally has been a matter of significant concern since 2006, when a number of cases of poor practice came to light. An inquiry led by Richard Ayre, a non-executive member of Ofcom's Content Board ('the Inquiry') subsequently concluded that there were systemic problems in broadcasters' use of PRS. Since that time Ofcom has uncovered more than twenty separate breaches of the Broadcasting Code resulting from competition mismanagement by radio licensees. Fines have been levied against radio licensees on nine occasions.
1.3 In an earlier consultation, we examined the use of PRS and competition management generally by television broadcasters. On that occasion, we concluded that the licences of television broadcasters should be varied to make those licensees directly responsible for their communications with the public, where those communications had been solicited in programmes. This meant that television broadcasters assumed responsibility for the management of those communications, whether they were made via telephony, email, post or other means. We also varied the licences of television broadcasters to require them to implement a system of independent third party verification where PRS were used for competitions or voting schemes.
1.4 The June 2009 consultation sought views on whether a similar variation to the licences held by radio licensees was necessary and appropriate. We suggested that, given the significant differences between the two broadcasting sectors, both in the methods and value of their interactions with audiences, a different regulatory solution would be appropriate for radio in order to provide the best balance between consumer protection and the degree of consumer harm, reflecting industry circumstances.
Conclusion
1.5 We have considered the views of respondents to the June 2009 consultation in making our assessment of the appropriate arrangements for regulating audience participation in radio programming. In particular, we note that all of the respondents representing radio licensees supported the regulatory solution advanced by Ofcom in the June 2009 consultation. As with our previous consultation on the use of PRS by television broadcasters, no concerns about our preferred regulatory approach were raised by consumer groups or individuals.
1.6 We have concluded that, as proposed in the June 2009 consultation, the licences held by radio licensees should be varied to make licensees directly responsible for communication with the public where the mechanism of communication features in programming. This will mean that radio licensees will assume responsibility for the management of all communications with the public, where these are publicised in programmes.
Implementation
1.7 Under section 87(1) of the Broadcasting Act 1990 ("the 1990 Act") and section 43(1) of the Broadcasting Act 1996 ("the 1996 Act") we may for all classes of radio licence issued under each Act set licence conditions including such conditions as appear to us to be appropriate having regard to any duties under the Communications Act 2003 and conditions providing for such incidental and supplementary matters as appear to us to be appropriate. Under section 3(1) of the Communications Act 2003 it is our principal duty to further the interests of citizens in relation to communications matters and to further the interests of consumers in relevant markets where appropriate by promoting competition.
1.8 Under section 86(5) of the 1990 Act and section 42(3) of the 1996 Act, we can vary a licence, and therefore include new conditions, provided the licensee has been given a reasonable opportunity to make representations about the proposed variation. This power is also reflected in the licences.
1.9 Therefore, in due course we will be notifying holders of the relevant licences formally of the intended licence variation. Licensees will then have four weeks in which to make representations to us.
1.10 For the avoidance of doubt, the categories of licences we propose to vary are:
- under the 1990 Act: Local and National Sound Broadcasting Licences, Additional Radio Service Licences, Restricted Service Licences, Radio Licensable Content Service Licences and Community Radio Licences; and
- under the 1996 Act: Local and National Radio Multiplex Licences, Local, National Digital Sound Programme Service Licences and Digital Additional Service Licences.
1.11 After that period, if the variation is confirmed, licensees will be notified of when the variation to their licence will take effect; it is intended that it will then do so immediately.
1.12 We will also include the licence condition in future radio licences.