.xxx domain: US Gov Tells ICANN To Wait

.xxx Domain For Pornos ApprovedBack in June this year, the .xxx domain appeared to be have been cleared by ICANN (Internet Corporation For Assigned Names and Numbers), the organisation that has control of domain names with world over.

Now Michael D. Gallagher from the US Department of Commerce (DoC) has now written to ICANN asking them to delay the ICANN Board of Directors wait for a week in what was to be a rubber-stamping of the final approval. Involvement of the US government with ICANN at this level is without precedence.

Gallagher sights nearly 6,000 letters and email from ‘concerned families’ that have been received to the DoC. In a country of over 296m people (assuming only US citizens have written in), 2.027e-5 is beyond a rounding error. It’s the rounding error of a rounding error.

We all know how easy it is to send an email – it takes seconds. And as the BBC found out when they received a flood of over 20,000 emails objecting to the showing of “Jerry Springer The Opera”. It’s no concern that very many of these mails were identical – as ‘the faithful’ from various religious groups were rounded up to form a virtual lynching posse.

.xxx Domain For Pornos ApprovedThe Bush administration doesn’t appear to have taken in to account any of this, and all of a sudden are interested in the views of the people. Wouldn’t it have been great if they’d listened to the view of the people before invading Iraq.

Gallagher’s letter draws to a close with, “Given the extent of the negative reaction, I request that the Board will provide process and adequate additional time for these concerns to be voiced and addresses before any additional action takes place on this issue.”

The Bush administration say that they have a concerns that the .xxx domains become a virtual red-light district, reserved exclusively for pornography.

Which way do you want it? Protecting those who don’t want to view porn, or not?

Porn on the Internet is a fact, and will not go away – just as porn in print will not vanish.

Surely it’s better to know where the porn is, rather than those not looking for it stumbling across it by accident.

Others see the creation of a separate TLD for ‘objectionable’ material as a step towards censorship of the Internet. Their concern is who becomes the arbiter of what is and isn’t ‘objectionable’, would a pencil drawing of nude be lumped in with hardcore porn, or would a slightly racy story be forced into the same category.

Is it just us, or do you feel that the steadily increasing involvement of Governments in areas which they really shouldn’t been getting involved with is a concern?

ICANN

‘Naked DSL’ Demanded By Vonage In UK

'Naked DSL' Demanded By VonageResearch has revealed that two thirds of UK Internet users are deeply unchuffed about having to pay a BT line rental on top of their broadband subscription.

The stating-the-bleeding-obvious revelation was the conclusion of an online survey of more than 1,000 broadband subscribers in the UK who were questioned in June 2005 by online research company, TickBox.

The research, carried out on behalf of the broadband telephony outfit Vonage, also revealed that only 37% of Internet users believe there is a real choice of telephony provider, against 72% for mobile phones.

'Naked DSL' Demanded By VonageVonage has demanded ‘Naked DSL’ in the UK, which would enable consumers to independently subscribe to telephone and broadband services and allow users to subscribe to a VoIP service instead of a traditional fixed-line service,

In a statement, Vonage commented: “In the UK, by the end of this year, broadband subscribers will be paying a surcharge of £672m annually to BT in line rental on top of their broadband bill, no matter who their ISP is.”

“Broadband subscribers deserve the right to choose their broadband and telephone providers independently without being forced to pay for a telephone line they may never use,” clarion-called Vonage UK MD Kerry Ritz.

'Naked DSL' Demanded By Vonage“The broadband infrastructure will support a variety of services, one of which is telephony. Customers should be able to decide what services they want to ‘plug’ into their broadband network in the same way that they choose their electricity provider,” he added.

BT was quick to scoff at Vonage’s appeal, putting on its best supercilious tone while patting the upstarts on the head, saying that the company had little grasp of the costs involved in supporting its nationwide broadband network.

'Naked DSL' Demanded By Vonage“We are aware that applications providers that don’t contribute to the cost of building and supporting that ever improving broadband network have little appreciation of the economics involved,” said a BT spokesman. “Our customers, however, do”.

Vonage

EU Seeks To Regulate Internet TV

EU Seeks To Regulate Internet TV‘The Man’ in the form of the EC wants to introduce regulation to the Internet by bringing in controversial rules to cover television online, according to a report in the Times.

Well, actually it’s ‘The Woman’, as Viviane Reding, the European Information Commissioner is hatching plans in Brussels to regulate areas such as taste and decency, accuracy and impartiality for Internet broadcasters.

Or good old ‘censorship’, as some may like to put it.

The consultation documents also looks set to relax regulations covering the amount of advertising that a TV channel can show, with the current limit of 12 minutes an hour likely to be scrapped. More adverts. Whoppee.

One of five “issue papers” to be released by Reding discusses the impact of technological change and concludes that “non-linear audio-visual content” (‘TV downloads’ in human-speak) need to be subjected to regulation.

Although some of the suggested changes – like the extension of rules governing the protection of children – are unlikely to ruffle any feathers, demands that Internet broadcasters provide a statutory right of reply look set to get the fur flying.

Ofcom’s already in a strop about the proposals, with Tim Suter, Ofcom’s partner for content and standards, snarling: “Whatever happens, it is not appropriate to take the set of rules that apply to television and apply them to other media. Where possible, we should be looking at self-regulation or co-regulation, because that is something that can deliver the goods.”

EU Seeks To Regulate Internet TVInternet-delivered TV is currently unregulated in the UK, so there is no compulsion for Web broadcasters to respect rules governing accuracy and impartiality or taste and decency that apply to all other analogue and digital channels.

The current big boys of UK Internet TV broadcasting, Home Choice, have formed their own self-regulatory body which mirror most of the existing rules, and Ofcom believes that this approach is sufficient for responsible broadcasters.

Ofcom argues that dodgy operators would be likely to operate offshore and thus be completely unhindered by any jurisdictions that the European Union dreams up.

The new rules will be based on the 1989 European directive, Television Without Frontiers, which set the benchmark for television regulation.

The proposals in the issues papers are not firm conclusions and broadcasters will have until 5 September to respond in writing, with a draft directive following by the end of this year.

The Times
Europe’s Information Society

.mobi Domain TLD Approved For Mobile Phones

New '.mobi' Suffix Approved For Mobile PhonesConsumers on the move will soon be able spot websites which have been specifically designed for mobile phones courtesy of the .mobi suffix.

The new suffix, which we originally picked up on back in March 2004 was approved by the Internet Corporation for Assigned Names and Numbers (ICANN), will join the popular “.com”, “.org” and of course “.info”, and other top-level domain names when it goes live in 2006.

The new domain name was requested by a heavyweight gang of mobile phone operators and handset makers who teamed up to create a joint venture tasked with encouraging companies and Web site designers to create mobile-specific Web pages.

The member companies include Hutchison 3G, GSM., Ericsson, Microsoft, Nokia, Samsung, Telefonica Moviles, T-Mobile and Vodafone.

New '.mobi' Suffix Approved For Mobile PhonesThe companies hope that the new mobile-optimised websites will encourage consumers to upgrade their phones and access the web more while on the move – and thus generate lots of lovely lolly for their coffers.

“As .mobi will encourage the usage of advanced functionalities in mobile devices, the market potential for those devices will increase,” the companies said in a joint statement.

For some old timer designers it’ll feel like being back in the mid 1990s with the new mobile sites having to take into account the small screens, limited memory and frugal bandwidth available on mobile phones.

Although the new suffix makes perfect sense for British babblers (who call their phones ‘mobiles’), it’s a little more confusing for the Finns, where mobile phones going under the curious name of “kannyka,” which sounds like something that Ali G may have come out with. Aye!

ICANN

Ofcom’s BT statement – Legal Issues Examined

Following hot on the heals of yesterdays Ofcom’s notice to BT, under Section 155(1) of the Enterprise Act 2002, Russ Taylor of OfcomWatch takes us through the legal issues.

Ofcom's BT statement - Legal Issues ExaminedOfcom released the details of the BT settlement.

Folks, here are the key takeaways / open issues as I see them from a legal perspective:

* This is essentially a consultation on whether BT has promised enough (‘undertakings’ – spelled out in Section 2 of the document) to avoid referral of this matter to the Competition Commission. Ofcom concludes that BT has, and asks for public comment until August 12, 2005.

* Section 4.14 of the document is the key allegation, and check-out the indirect wording on Ofcom’s part! Ofcom basically say that BT had the incentive to engage in anti-competitive conduct, and later say that it suspects BT ‘may have acted in accordance with the incentives set out above.’ Is that Plain English? Even the title of Section 4 is non-confrontational… referring to the problems of the market, rather than problems with BT.Ofcom's BT statement - Legal Issues Examined

* Annex E is the basic document (the Annexes are here). It is the proposed agreement between BT and Ofcom. It specifies the undertakings. It looks to me like the Access Service Division (ASD) CEO reports to the BT CEO. So, presumably, the BT CEO can terminate the ASD CEO? That’s not exactly ‘separation’. And more importantly, it does not square with the classic definition of a CEO.

* It’s a lengthy document, and I’ve only skimmed it, but the missing element–in my opinion–seems to be a clear dispute resolution / problem solving element of the undertakings. In other words, what happens if BT shirks its duties, or there is a dispute about one of the undertakings. Are the undertakings self-enforcing? I don’t think so. Sections 12 through 17 of Annex E purport to cover this ground, but I think they are vaguely worded. Section 14, in particular, seems to merely allow BT and Ofcom to agree to disagree, and has no real teeth other than Ofcom’s ability to declare BT in breach of the undertakings. But what then? Does Ofcom then have the power to fine BT? I don’t think so – I think a breach would require Ofcom to go to court to secure a remedy… or threaten another referral? So, would communications policy decisions then rest in the hands of a court? Why didn’t Ofcom require BT, as part of its undertakings, to waive court procedures and agree to a schedule of monetary penalties, etc.Ofcom's BT statement - Legal Issues Examined

* I also recall that Ofcom initially said that third parties would be able to secure relief under this settlement–for their losses caused by BT’s breaches of the undertakings. How does that work? This element of the scheme seems to be completely missing from the documents.

* Finally, what happens if BT merges with another entity to which these undertakings do not apply. I’m confused… Overall, I think the document accomplishes much by way of technically sorting out a way to limit BT’s market power. But from a legal perspective, it needs some more thought.

* * *

This should be an interesting consultation… stay tuned…

Russ taylor is a co-founder of OfcomWatch
Ofcom

Ofcom: A New Regulatory Approach For Fixed Telecoms

Ofcom: A New Regulatory Approach For Fixed TelecomsUK Super-regulator Ofcom have today published details of a new regulatory approach for the UK’s fixed line telecommunications market.

We think this information is significant enough to be reproduced without editing.

A new regulatory approach for fixed telecommunications

Ofcom today published details of a new regulatory approach for the UK’s fixed line telecommunications market.

Ofcom has concluded that a new approach is necessary for the longer term, based on real equality of access to those parts of the fixed telecoms network which BT’s competitors cannot fairly replicate.

This new approach to regulation has six objectives:

  1. to drive down the price of calls, connections and services for consumers and businesses;
  2. to support more innovation through the growth of competitive products and services, such as faster broadband, television and voice over the internet and video-on-demand, from a range of credible companies;
  3. to provide regulatory certainty for providers and investors so that they commit to developing, marketing and extending these products and services for UK consumers and businesses;
  4. to re-focus regulation where it is truly needed, with swifter remedies to tackle anti-competitive behaviour and a structure which delivers equivalence to a timetable with real penalties and incentives;
  5. to remove regulation wherever competition is effective and the effect of open markets – rather than regulatory intervention – ensures the delivery of choice, value and quality for consumers; and
  6. ensure the necessary level of consumer protection through a combination of codes, sanctions and effective consumer information.
Ofcom Chairman David Currie said: “We believe these proposals have the potential to encourage more sustainable competition, more services, lower prices and greater consumer choice.”

Ofcom Chief Executive Stephen Carter said: “Effective regulation for the telecommunications industry needs to be forward looking, needs to encourage competition in the right places and needs to deliver tangible benefits for customers.”

He added: “These proposals are substantially different to traditional telecommunications regulation. They demand significant changes in key areas, and recognise that in other areas regulation can be rolled back.”

Proposed Undertakings

On Tuesday 21 June the Board of BT Group plc agreed in principle to offer to the Ofcom Board legally binding undertakings in lieu of a reference under the Enterprise Act. On Wednesday 22 June 2005 the Ofcom Board accepted this offer.

The proposed undertakings commit the company to substantive changes in organisation and behaviour; full detail of the proposed undertakings will be published on 30 June 2005.

A more detailed Ofcom Statement can be found online at www.ofcom.org.uk/consult/condocs/telecoms_p2/statement/

This news release should be read in conjunction with that statement. The full undertakings – which will be subject to final consultation – will be published on 30 June, together with a number of other proposals relevant to securing greater competition in the fixed line market, the details of which follow later in this news release.

  1. Enforceability. The final undertakings to be offered by the Board of BT Group plc will be in lieu of a reference to the Competition Commission under Section 155(1) of the Enterprise Act 2002. They will be legally binding and enforceable, and will mean that:
    • in the event of a breach, Ofcom could take the matter to the High Court. The Board of BT Group plc would then be responsible for ensuring compliance with the order of the Court;
    • third-parties affected by a breach could also seek damages via the Court to recover losses incurred; and
    • these undertakings will sit alongside Ofcom’s existing competition and regulatory power.

Ofcom will publish the final undertakings for a six week consultation on 30 June 2005.

  1. Branding and identity. The proposed undertakings offered by BT will stipulate the setting up of a new – and operationally separate – business unit, provisionally entitled Access Services, but with a distinct new brand and identity to be devised in the coming weeks. The new business unit will be staffed by around 30,000 employees presently responsible for the operation and development of BT’s local access networks. It will have:
    • separate physical locations for management teams;
    • separate bonus schemes; whilst the new business unit’s staff will remain BT Group plc employees, their long-term incentive plans will be changed to a new scheme which reflects the objectives of the new business unit, not those of the BT Group plc; and
    • over time, new branding on uniforms and vehicles which emphasises its operational separation from BT Group plc.
    • given the limited size of the market in Northern Ireland (and, as a consequence, BT’s current operational structure in Northern Ireland), BT has proposed – and Ofcom has accepted – that the three operational changes above will not apply to Northern Ireland. However, all other aspects of the proposed undertakings will apply equally across the whole of the UK; and
    • separate operating and trading systems.
  2. Product equivalence. The new business unit will be required, through a set of formal rules on governance and separation, to support all providers’ retail activities (including those of BT Retail) on a precisely equivalent basis, which Ofcom terms “Equivalence of Input”. Equivalence of Input will mean that all providers will benefit from:
    • the same products, with equal opportunity to contribute to the development of new products;
    • the same prices, offered to all providers equally; and
    • the same processes, to ensure all providers are able to order, install, maintain and migrate connections for their customers on equal terms.
  3. Products and services. The new business unit will offer a universally available product and service set:
    • Local Loop Unbundling (LLU) products, including fully unbundled loops (where a provider takes full responsibility for all of the customer’s voice and broadband services) and shared loops (where BT Retail continues to provide voice services and another provider is responsible for broadband).
    • All forms of Wholesale Line Rental (WLR), where a provider takes responsibility for all voice services and provides a single bill for both line rental and calls.
    • Backhaul products, which are used to connect the local access network to the core network. Some providers have built out their own backhaul networks; however many others are dependent on BT for wholesale backhaul services.

Equivalence of Input will also apply to IPStream – BT’s wholesale internet products used by many Internet Service Providers (ISPs) to provide broadband connections for their customers.

Detail of the timescales under which Equivalence of Input will apply to these services are set out in the accompanying Statement, which can be found online at;

www.ofcom.org.uk/consult/condocs/telecoms_p2/statement/

  1. Next Generation Networks. The proposed undertakings will also set out a number of clear principles which BT Group plc should follow in the design, procurement and build of its next generation 21st Century Network. These principles will help ensure that other providers who will depend upon interconnection with BT’s 21CN do not suffer competitive disadvantage.
  2. Board and governance. BT Group plc and the new business unit’s compliance with the proposed undertakings will be monitored by a new Equality of Access Board (EAB), which will also oversee the delivery of other legacy regulated products not directly delivered by the new business unit. The proposed undertakings from the Board of BT Group plc require BT Group plc to act swiftly upon the recommendations of the EAB.
    • The EAB will be a compliance Board, not an operating management Board;
    • The EAB will be chaired by Carl Symon, a Non-Executive Director on the Board of BT Group plc, with four other members, three of whom will be independent of BT Group plc and will be appointed in consultation with Ofcom;
    • The EAB will meet between six and ten times during the first year of operation;
    • The EAB will produce a regular summary report of its activities, which will be published; and
    • The EAB will have extensive powers to seek access to information from wherever in BT Group plc it deems necessary to do its work.
Ofcom Chief Executive Stephen Carter said: “The Ofcom Board proposes to accept BT Group plc’s proposed undertakings on the critical assumption that BT Group plc does not merely deliver the letter of the undertakings, but also the spirit.”

Other regulatory policy initiatives

Ofcom has also been developing a series of regulatory policy initiatives under its sectoral powers which, in their impact on the competitive market, will complement the proposed Enterprise Act undertakings offered by BT Group plc.
Cost of capital Separately, Ofcom has today also published a further consultation document on the Weighted Average Cost of Capital it will apply in assessing the rate of return on BT’s regulated products.

The consultation document can be found online at www.ofcom.org.uk/consult/condocs/cost_capital2/

Establishing the relationship between risk and return is an important aspect of Ofcom’s work. The more high-risk a company’s investment, particularly in terms of the volatility of returns compared to the volatility of returns on equity investments generally, the more expensive it becomes to raise capital in the markets, as investors expect a higher rate of return to acknowledge the degree of risk involved.

Where Ofcom is required to set a limit on the price a company can charge for its regulated products and services, it is important that those limits allow the company to make enough of a return on its investments to reflect the costs it incurs in raising capital.

In line with its preliminary consultation, Ofcom will propose separate levels for the traditional copper access network which differ from the overall cost of capital for BT Group as a whole. Ofcom believes that this approach will provide a fairer pricing regime for competitors using BT’s access network whilst allowing BT an appropriately higher return on higher-risk investments.

In the coming weeks Ofcom will also publish four further documents. These are:
Undue Discrimination Guidelines Ofcom has imposed regulation on some companies requiring them not to discriminate unduly to prevent then from using their dominance to the detriment of competition and consumers.

Ofcom is reviewing the guidelines that describe how it will investigate potential cases of undue discrimination. The present approach was designed by Ofcom’s predecessor Oftel before the Communications Act 2003 came into effect. The new approach proposed in the consultation, to be published on 30 June, will tighten the requirements and in Ofcom’s view will help increase effective competition.

The consultation will also include, by way of illustration, a number of examples of the kind of behaviour which may lead to undue discrimination. Those examples are included to help foster understanding of the new approach.
Wholesale Broadband BT Group plc has today announced that it will cut the price for full LLU by 24% per cent from £105 to £80 per year, with effect from August. BT Group plc has also committed to deliver stability on IPStream pricing until there are 1.5 million unbundled lines in the UK to encourage competition.

Ofcom believes that these voluntary measures from BT Group plc will help to stimulate greater competition in broadband markets by providing reassurance for LLU operators investing in deep level infrastructure.

Ofcom welcomes these initiatives from BT. It will publish a short statement on 30 June outlining its future plans for regulation of Wholesale Broadband. Ofcom is intent on fostering competition in the LLU market and will be quick to use its regulatory powers if required.
Next Generation Networks Ofcom will consult on the detailed practical steps to ensure that the development and deployment of BT Group plc’s Next Generation Network – 21CN – offers all providers the same products, prices and processes on equal terms and does not inhibit reasonable developments by alternative network operators.

The consultation, also to be published on 30 June 2005, will propose that BT Group plc should not simply inform its competitors what it is doing, but instead share details of deployment and interconnection with its competitors via a genuinely cooperative new NGN forum.
Universal Service Obligation Ofcom will consult on the outcome of its analysis of the Universal Service Obligation – the statutory safeguards which provide important citizen and consumer protection measures, including tariffs for people on low incomes, obligations to install new lines upon request and commitments to provide and maintain the public payphone service. The consultation will be published on 30 June 2005.
Deregulatory measures Ofcom is seeking to withdraw from the regulation of competitive markets wherever feasible and appropriate. Ofcom has previously consulted on deregulating in two narrowband wholesale markets. In July 2005 Ofcom intends to consult on possible deregulation in the leased lines and large business markets.

Ends.

Ofcom Freedom Of Information Act (FOIA) Midyear Figures

Ofcom Freedom Of Information Act (FOIA) Midyear FiguresA number of people have raised concerns as to how open an organisation Ofcom is. It’s a public corporation, set up in many ways like the BBC, but it was setup with the knowledge that the UK Freedom Of Information Act (FOIA) would take effect in January 2005. This has led it to define the accessibility of the information that it produces, as it generates it.

We’ve heard many people have applied for information and have been turned down, with the frequently cited reasons being; Not in the public interest (how broad a brush would you like sir); or Commercially sensitive (also pretty broad). Others, who have had their request granted, are nearly always pointed to Ofcom’s extensive Web site, which isn’t always the known as the quickest to locate what you want.

We’ve heard that many applications take the statutory maximum number of days (20) to respond with a reply – even when it’s a refusal. This causes us some confusion – does it really take that long for Ofcom to deduce that it is going to be refused, especially as all information is graded on creation? Ofcom’s response is that if it comes back as a refusal, they will pass it through “internal procedures” to re-examine if they can release it.

Ofcomwatch have been keeping an eye on this for some time. We spoke to Luke Gibbs from Ofcomwatch about their FOIA findings, “This is something we’ve been looking at over the last year. It appears to us that Ofcom is following the letter of the FIOA, rather than the spirit. We’ll be doing further research into this later in the year.”

Ofcom Freedom Of Information Act (FOIA) Midyear FiguresRuss Taylor, Ofcomwatch co-founder reveals their finding …

Ofcom was kind enough to provide OfcomWatch with some brief midyear statistics on how it is progressing with the Freedom of Information Act (FOIA), implemented in the U.K. on January 1, 2005. For previous Ofcomwatch posts on this issue, check Ofcomwatch’s Brief Guide to The Freedom of Information Act and its continuation.

* Ofcom is averaging about 130 FOIA requests per month ~ about 800 so far.

* About 70% of FOIA requests are granted. Common reasons for denying a FOIA request: (i) the data is commercially confidential and (ii) the request is overly-broad and could not be completed within the 18 hour / 450 GBP limit.

* 98.5% of FOIA requests are processed within the statutory time limit. Interesting point: Grants are reportedly swifter than denials, because Ofcom internally review proposed denials to determine whether they can be partially granted.

* Ofcom do not categorise FOIA requests because that would lead to prioritisation, which would be ‘wrong and unfair’.

* Overall, Ofcom commented that the FOIA — in ‘philosophical terms’ — is ‘both welcome and in line with our view of the public’s right to expect transparency and accessibility from public bodies’. However, Ofcom noted that FOIA is something of an operational burden because of the volume of requests received.

* * *

Ofcom Freedom Of Information Act (FOIA) Midyear FiguresSo, that’s Ofcom’s take (and progress) on FOIA so far. FOIA is of course a new area of U.K. law and we expect all public bodies–not just Ofcom–to struggle with implementation. OfcomWatch will take a closer look at FOIA in January 2006, as the first-year of the FOIA’s applicability to Ofcom draws to a close.

But, overall (and interim) statistics only tell part of the story:

* We’ve heard some interesting stories about FOIA from some of you, and we’ve filed less than a handful ourselves. Keep sharing your FOIA stories (mail to: [email protected]).

* I suppose we’ll also receive legal clarifications on just how powerful a tool FOIA is as some denials (whether by Ofcom or by others) are tested on appeal.

* Finally, FOIA is only one element of ‘better regulation’ that is being implemented across the U.K. Better regulation means that FOIA requests should be minimised because public bodies otherwise maintain useful websites and publication schemes, always with an eye toward satisfying their ultimate boss: the citizen-consumer. So, we always want your comments on how Ofcom can function better in this regard.

Stay tuned…

Ofcomwatch
Ofcom UK Home Office, FOIA

OfCom Response To DCMS Green Paper on BBC Royal Charter: Comment

OfCom Response To DCMS Green Paper on BBC Royal Charter: CommentOfcom’s press release accompanying their response to the DCMS green paper on BBC Royal charter was my first point for comment. It initially indicated to me Ofcom were sticking to:

* An institutional model of PSB (BBC fully-funded, cornerstone of PSB, key role in digital switchover, all things to all people, etc.);

* The much-derided PSP concept; and

* ‘The BBC is independent’ myth (Note the irony – this statement is otherwise contained in a document related to how the government will establish the funding, governance and remit of the BBC).

I wondered if I was being a little too hard on Ofcom. If there was original, evidence-based thinking in the document?

Once I’d had the opportunity of read through the whole document, combined with the benefit of reflection, my views changed slightly, leading me to the following conclusions.

1. Ofcom have produced more original thinking than I gave them credit for, initially, perhaps because the introduction and summary to the document are not as robust as its contents. Read on…

2. That being said, Ofcom in its response still embarrassingly clings to the discredited notion that PSB must be fostered by significant and prolonged state intervention in the form of subsidy. I agree with the Financial Times on that point. Will there always be a need for a multi-billion pound state subsidy to this sector?

3. Much of Ofcom’s thinking stems from a very questionable line of logic. Ofcom posit that PSB is in danger of becoming a BBC monopoly because the ‘implicit’ subsidy given to ITV and Channel Five is disappearing as the move to digital is underway. This line of argument is contained in Sections 2.4 through 2.11 of Ofcom’s response. I’ve never been convinced by this argument for two reasons: (i) recent empirical research by the Satellite and Cable Broadcasters Group (SCBG) demonstrated that PSB is being provided in abundance in the digital world without any subsidy and (ii) Channel 4 provides PSB and makes money. Ofcom’s statements–actually they are more like predictions–on this point have simply been unconvincing.

4. Someone should actually listen to what the SCBG has to say. These providers don’t receive scarce spectrum, don’t have must-carry status, and don’t receive public funds. Yet SCBG say their members produce 14,000 hours of PSB programming per month—more than all the terrestrial channels combined. The SCBG say:

[I]n the majority of programme genres that Ofcom defines as “public service broadcasting”, channels other than the BBC’s now provide most of the UK output: more than 60% of news and current affairs, more than 90% of documentaries, more than 80% of arts and music programmes. It follows that publicly funded broadcasting should now be limited to services, or to a quality of service, that the private economy cannot provide or would not provide in the absence of competing public subsidy.

OfCom Response To DCMS Green Paper on BBC Royal Charter: CommentThis reflects the EU rules governing the use of State Aid, which require that publicly funded services such as the BBC’s must complement rather than substitute or duplicate provision by the market. Furthermore, where market developments supersede publicly funded provision, the BBC should withdraw from those services or activities and re-direct its valuable public resources to areas of activity where there is a proven market failure. While market failure should not be the only test applied to BBC services, it should provide the underpinning for all publicly funded BBC services. The absence of a market failure analysis raises significant questions as to the compatibility of the BBC’s publicly funded status with European State Aid rules.

5. Give Ofcom some credit – if the SCBG is wrong and instead Ofcom’s thinking is correct and PSB does require massive public subsidy, at least they have it right that the public subsidy should not all go to the BBC. Ofcom also propose a responsible structure to apportion that subsidy.

6. Give Ofcom more credit – they are keen to point out that the BBC’s role in the digital switchover process should not mean a government preference for Freeview over other digital platforms. Ofcom say the switchover should be platform neutral. Amen. Freeview stinks – I recently heard an influential observer charitably call it a ‘transitional technology’, and that’s really about the best you can say for it. Its capacity is limited; it’s not two-way; it has no worthwhile gaming applications, etc.

7. One more area where Ofcom deserve credit – suggesting to DCMS that it consider moving the review date for PSB funding to 2010 instead of post-digital switchover. Ofcom rightly realise that this is a fast-changing area and an earlier review will serve the public interest.

8. Finally, Ofcom say they want an ‘enhanced’ license fee for British viewers. An ‘enhanced fee’ – that can’t be a good thing, right? How much more will that cost us?

Russ Taylor is a co-founder of ofcomwatch.

Review of the BBC’s Royal Charter – Ofcom response to the Green Paper
Ofcom publishes response to Government Green Paper on BBC Royal Charter Press Release
BBC Charter Review

Freeview Breaks 5m Barrier. UK Digital TV Now ~62%

Freeview Breaks 5m Barrier. UK Digital TV Now ~62%Ofcom has today reported its quarterly figures on the rate of take-up of digital TV in the UK.

The number of homes that are connected to a digital TV service through some means has increased 2.5% to just short of 62% (61.9%). No big surprise there as this has been gradually increasing over the previous quarters.

The bigger news, we feel, is Freeview, the UK’s Digital Terrestrial Television (DTT) service reaching 5,059,350 homes – breaking the significant barrier of five million homes.

Freeview Breaks 5m Barrier. UK Digital TV Now ~62%This is bad news for Sky, as it’s starting to get close to the around 7.5m homes that they have. What’s worse news for them is in the detail of the report. Sky’s all-important ARPU (Average Revenue Per User) has dropped from £386 in Q4 2004 to £382 in Q1 2005. This might not sound huge, but for an organisation that is trying to constantly increase their ARPU, it’s not encouraging. Another figure of note is their rate of churn, that’s up to 11.1% form 9.6% in the previous quarter.

Xmas has previously been a strong time for Sky as people with little imagination and less conversation buy in Sky to keep them happy over the Turkey dinner.

Freeview Breaks 5m Barrier. UK Digital TV Now ~62%The growth of aerial-delivered Freeview has been gaining more momentum of late, still spearheaded by the BBC using the Freeview channels to first-show a lot of its content.

For the fact spotters, a minor point of interest is the number of old ITV Digital STB’s that are in use in the UK. This is in steadily decline since they went bust and is now running at 290,000, down 60,000 from 350,000 in the previous quarter.

I actually run one of these and have increasingly found problems with it as the ‘digital rust’ sets in – box freezes, etc. (I’m not looking for sympathy. The problems with the box are significantly offset by the fact that I paid the princely sum of 1p for it, timing its purchase, as I did, during the week of uncertainly before ITV Digital went bust).

Freeview Breaks 5m Barrier. UK Digital TV Now ~62%The breakdown of the figures is as follows

Sky Subscribers – 7,349,000 Freeview & free satellite – 5,504,350 Digital cable – ~2,500,00

Ofcom Digital Television Update – Q1 2005

.xxx Porno Domain Approved

.xxx Domain For Pornos ApprovedSaucy sensation seekers and sleazy surfers will be rewarded with their very own porn-friendly set of .xxx domains before the end of the year.

The Web’s virtual red-light district has been approved by ICANN, the non-profit organization responsible for Internet addresses.

ICANN has announced that it is working with the ICM Registry to finalise the new top-level domain details (other top-level domains awaiting a decision from ICANN are .asia, .mail, and .tel)

In an interview last year, Stuart Lawley, chairman of the ICM Registry, stated that .xxx domain names would cost around US$60 (~£32 ~€47.8) and have no restrictions on content, so long as sexually explicit material only featured adults.

“Apart from child pornography, which is completely illegal, we’re really not in the content-monitoring business,” he said.

.xxx Domain For Pornos ApprovedIt is hoped that pornsters will voluntarily shift from their current .com addresses, thus making it easier for parents to filter out adult material, but in an industry not exactly renowned for its high moral stance, we anticipate that not all will be wiling to switch from their lucrative, high profile domains.

Moreover, with the $60 price tag being around ten times higher than the cost of many dot-com names, we suspect that many porno kings will stick with the cheapest option. The wannabe-Bonking Baron’s that don’t currently have established sites with prize domain names are bound to pile into the .xxx domains – either to use them or with the hope of selling them on.

It’s common knowledge that the ‘right’ porn domain can bring a near guaranteed financial fortune. The long disputed sex.com domain is widely thought to have brought in up to $1m/month, simply from banner ads.

The ICM Registry plans to handle the technical aspects of running the master database of .xxx sex sites, with the non-profit International Foundation For Online Responsibility (IFFOR) charged with setting the rules for the .xxx domain.

The IFFOR will have a seven-person board of directors, featuring a selection of bizarre job titles such as “child advocacy advocate” and “free-expression aficionado” along with some big-hatted, cheroot smoking, pink Chevvy-driving dude from the adult entertainment industry.

.xxx Domain For Pornos ApprovedUnlike the milk-snatcher Margaret Thatcher, the ICANN’s decision proves that they are definitely for turning – in November 2000, the ICANN staff rejected ICM Registry’s first application after objecting to domains such as .kids and .xxx.

An outrage of politicians were quick to deride the decision with the Republican Fred Upton demanding to know why ICANN didn’t approve the .xxx domain “as a means of protecting our kids from the awful, awful filth, which is sometimes widespread on the Internet”.

With a little less hand-wringing, Sen Joseph Lieberman complained to a federal commission that the domain would be an essential means to force adult Webmasters to “abide by the same standard as the proprietor of an X-rated movie theatre”.

The American Civil Liberties Union has expressed its concerns about .xxx domains, suggesting that some uptight nations may force sites dealing with sensitive topics such as gay rights, homosexuality or birth control into the easily blocked .xxx zone.

ICM Registry – Sponsored Voluntary Adult TLD Application
Internet Corporation for Assigned Names and Numbers (ICANN)
International Foundation for Online Responsibility