The future regulation of on-demand programme services: Ofcom consultation response

On 1 January 2016 Ofcom took over sole responsibility for the regulation of on-demand programming services (ODPS) in the UK. Following an announcement in mid-December 2015, Ofcom consulted on two substantive proposals to amend the ODPS rules and guidance (ODPS Rules):

1. introducing new procedures for the investigation of breaches of the ODPS Rules to align them more closely with the regulation of linear television broadcasting; and
2. not charging ODPS providers fees, but including any costs in the existing broadcasting licence fee structure.

On 30 March Ofcom announced the results of its consultation which we summarise below.

Procedures to investigate breaches

Recognising growing convergence between traditional audiovisual media services such as TV and emerging on-demand audiovisual media services, Ofcom is seeking to ‘level the playing field’ between providers of the different types of audiovisual media service and to ensure that regulation meets the reasonable expectations of its audience. Therefore it considers that the procedures to investigate breaches of the linear TV regime (Broadcasting Procedures) and ODPS Rules (ODPS Procedures) should be aligned as closely as possible.

The principal issues highlighted by respondents to the consultation were:

• Scope determinations: concerns were raised that determinations of scope are carried out by an individual decision maker (i.e. one person decides whether or not a service providing video on demand falls within the scope of the ODPS Rules).

  To address this concern Ofcom has decided that determinations of scope will be made by two or more appropriately qualified Ofcom members of staff with delegated authority by the Ofcom Board.

• Catch-up ODPS: respondents were generally opposed to Ofcom’s proposal that complaints in relation to a catch-up ODPS where the material has recently been shown on a television service should be dealt with under the Broadcasting Procedures, on the basis that it could be used as ‘backdoor’ for complaints about broadcasting standards and may create a greater burden on ODPS providers.

  Despite these concerns, Ofcom maintains that the Broadcasting Procedures, and therefore the broadcasting code, should apply to a catch-up ODPS where the material has recently been shown on a television service. Ofcom highlighted that the Broadcasting Procedures require complaints to be made within 20 working days of the broadcast and ‘recent’ should be interpreted in this regard.

• Accessibility: Ofcom also acknowledged Action on Hearing Loss’ response which expressed frustration about the relative lack of availability of access services, by stating that it will consult on what more can be done to encourage accessibility as required under section 368C(2) of the Communications Act 2003.

The updated ODPS Procedures are set out in Annex 1 of the consultation response and will be effective from 1 April 2016.

ODPS charges

By folding ATVOD’s responsibilities into Ofcom, Ofcom is able to take advantage of cost savings (given that there is only a small incremental cost to Ofcom of taking on these responsibilities). Ofcom has now confirmed that it is going to take the following approach on charges for ODPS:

• ODPS providers will no longer be required to pay a distinct charge for the operation of an ODPS service;

• for the 2016/2017 financial year there will be no incremental increase to broadcasting licence fees (as this will be funded by a surplus of licences fees collected from ODPS providers in 2015/2016); and

• Ofcom will review whether an increase to broadcasting licence fees will be required from April 2017.

Conclusion

These revised ODPS Procedures will be used to review any breach of the ODPS Rules which may be the result of a viewer complaint or an investigation commenced by Ofcom on its own initiative.

Ofcom’s recent determination and sanction against DM Global Media Limited, in respect of its service DM News Plus, highlights that Ofcom takes compliance with the ODPS Rules seriously. DM Global Media Limited was fined £25,000 for failing to provide recordings to Ofcom following 10 separate requests to do so, in accordance with its licence conditions. This fine is a reminder that Ofcom has the power to impose a maximum financial penalty of the greater of £250,000 and 5% of the providers qualifying revenue.

Ofcom, as co-regulator, has always had the power to impose fines on ODPS providers for breaching the ATVOD Rules. However, in practice, ATVOD would investigate the breach in the first instance and the ODPS provider would have the opportunity to remedy its breach before it being referred to Ofcom. This recent determination may be an indication that without ATVOD as the primary enforcer a breach by an ODPS provider may be more likely to incur a fine in the future.