Feature: Interactive TV pushes ahead but can the regulators keep up? - March 2005  

Kate Davies and Louise Fowler of law firm, The Simkins Partnership, look at the regulatory issues involved in the supply of content over broadband, using the UK as a case study.

March 2005’s Green Paper on the future of UK public service broadcaster the BBC contemplated the possibility of abolishing the licence fee in favour of a tax on the ownership of personal computers, rather than television sets. The rise of broadband means that more and more audiovisual content is being downloaded from the internet and watched through computers and mobile phones with viewers leaning forward and even standing up instead of lounging around. Indeed, Ofcom predicts that over half of households will be watching TV over the internet by 2012. BT has announced plans to offer TV over broadband. The BBC is also testing a service to play programmes over the internet, with its Interactive Media Player (iMP), know as IPTV (Internet Protocol TV). The BBC’s iMP has just finished successful technical trials and is set for much larger consumer trials later this year. Homechoice already offers 10,000 hours of shows and channels delivered over broadband to London homes. With the broadband trend set to continue, it stands to reason that a licence fee based on television ownership will be difficult to collect and enforce and may well be redundant by the time the next Royal Charter expires. The Green Paper acknowledges that technology is advancing at a rapid rate and two further reviews will be carried out toward the end of the switchover process to establish whether new types of funding might be needed to supplement or replace the licence fee after 2016.
The spread of broadband technologies via digital subscriber lines (DSL), cable and wireless that offer internet connections up to 100 times faster than conventional modems is revolutionising the internet sports world. While rights owners may still be struggling with the commercial issues inherent in splitting rights, broadband is going from strength to strength as a means of disseminating sports content and its potential to bring minority sports to fans all over the world is widely recognised. But what are the regulatory issues involved in the supply of content over broadband? Our industry is familiar with the Ofcom advertising and sponsorship regulations which affect the linear broadcast of sporting events. But what are the differences in the broadband regulatory environment? While the provision of services by internet service providers is regulated by Ofcom, content on the internet is not subject to the same strict content codes as broadcast content. This opens up greater sponsorship and advertising opportunities. Query whether the Wales Rugby Team would ever be forced to swap “Brains” for Brawn in those circumstances. While broadband has so far been the preserve of minority sports, these potential revenue streams may play a part in attracting more mainstream sports.

Sport is the driver

In terms of sporting content available via interactive television, to a large extent this has been advanced by the BBC’s coverage of the Athens Olympics and Wimbledon. Sky has of course pioneered interactive sports content with Sky Sports Interactive which, among other things, allowed viewers to control the camera angles during sports events. The BBC is exceptional in that its public service remit means that it is not profit driven although you might be forgiven for coming to an alternative conclusion during Greg Dyke’s chase for the ratings. But what is the regulatory position in relation to the provision of red button, SMS and premium rate telephone lines, all potential revenue streams for commercial broadcasters? ICSTIS – the Independent Committee for the Supervision of Standards of Telephone Information Services – is the industry funded but independent regulatory body which regulates the provision of WAP/SMS/premium rate telephone services or interactive digital TV.
The ICSTIS Code of Practice 10th Edition January 2004 governs the promotion, content and overall operation of premium rate services. The Code covers issues such as: legality, decency (violence, bad language), honesty (services must not be misleading), pricing information (the likely cost of services and the way the information is communicated), restrictions on promotions, special rules for competitions and other games with prizes. Service providers have to ensure that the content and promotion of all of their premium rate services comply with the Code. ICSTIS investigates complaints in relation to such services and has the power to fine companies and bar access to services. ICSTIS can also bar the individual behind a company from running any premium rate services under any company name on any telephone network for a set period.

The Programme Code

Interactive TV programming is covered by the same codes as linear programming, namely the Programme Code and the Advertising Code. It is supplemented by Guidance to Broadcasters on Interactive Television Services (ITC, Feb 2001). The Programme Code is due to be reissued in May and Ofcom advise that new guidance on interactive television will be published shortly thereafter. As yet, there is no conclusive sense of what changes will be made. There remains the fundamental principle of guidance, i.e. that TV programmes should be free from commercial interference and viewers must be clear on what kind of environment they are in, the distinction between programmes and advertising must be maintained. Ofcom does recognise that some commercial exploitation is required to meet cost of providing interactive enhancements. In the case of enhanced programme services, i.e. those which enable interaction with a linear programme rather than stand alone services, viewers must be told of any costs of choosing to interact and one of the key principles in the Guidance is that viewers must always be two clicks away from a commercial application. An intermediate "First Click" screen should offer at least some non-commercial material, as well as links to commercial content. Advertising material should be distinguishable.
It used to be inevitable that regulators waited for industry trends to develop before formulating how they should be regulated. Clearly, the jury is still out on Ofcom’s overall effect. However, there can be few more positive endorsements of a single body regulating both broadcasting and telecommunications than in the case of interactive television.

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