October 2009

01 Oct 2009

The Collaborating Conundrum

Late last year, the Telecommunications Carriers' Forum (TCF) updated the Code of Practice for the Provision of Content via Mobile Phones that it adopted in 2005.

The original version of the Code followed in the footsteps of similar codes issued overseas, and was issued by the TCF in the wake of widespread media coverage that paedophiles were using text message chat rooms to prey on minors. With mobile phones being increasingly able (and used by customers) to receive a broad range of multimedia content, the TCF's intention was to provide a framework for its members to self-regulate mobile content services provided to their customers in a socially responsible manner, including protecting minors from inappropriate content.

The updated Code deals with the provision of commercial content services supplied by the TCF's members (ie telecommunications carriers and service providers) to their customers via mobile phones. It covers issues around commercial content, chat services, internet content, unsolicited electronic communications and information and advice provided to customers, and makes a number of changes to the original Code, for example by including ringtones and related products within its scope.

Telecom, Teamtalk, Vodafone and TelstraClear signed up to the original Code and are currently being invited along with other interested parties to sign up (alongside OPTN, Rocom, Run the Red and Woosh) to the latest version of the Code.

The Code is discussed in further detail below.

Who Does the Code Apply to?

The Code is a voluntary code. It applies to telecommunications service providers who sign up to the Code, or who have entered into agreements for the provision of mobile content services with content service providers who have signed up to the Code. It therefore applies in relation to content that a telecommunications service provider may provide to its mobile customers itself as well as to content that it may agree to carry for content service providers. As a consequence, content providers to telecommunications service providers and content service providers (whether they themselves are signatories or not) should be aware of the Code, the potential requirements that will need to be met and the consequences of failing to do so.

Commercial Content

Under the Code, "commercial content" is any free, subscription-based or per event mobile content provided either by a service provider (ie the party with the billing relationship with the customer) directly to customers, or by a third party with a commercial arrangement with the service provider. It includes video clips, games, screen savers, chat services, ringtones and other personalised content, but not internet content. The Code does not apply to broadcast content.

In relation to any commercial content that is "restricted content", service providers are required to implement age verification and access controls before providing customers with access to the restricted content. The types of restricted content are discussed in the Code, and include content comprising highly offensive or sexual language, nudity, sex, violence, drug use, horror, cruelty or imitable techniques. Service providers are obliged to promptly remove any restricted content that is provided without age verification and access controls.

Chat Services

Where a service provider provides public chat room services for commercial purposes, the service provider must ensure that these public chat rooms are monitored at all times (ie 24 hours a day, seven days a week). 

Service providers are obliged to issue warnings to customers if they behave inappropriately, or ban them from the relevant chat rooms. Any illegal (or potentially illegal) customer behaviour (such as grooming minors) must be reported to the police.

Internet Content

The Code acknowledges that service providers may not be able to restrict access to content on the internet that may be illegal or unsuitable for minors. Accordingly, their obligations are restricted to providing information on safe internet practices to customers and working towards making internet filtering technology for mobile phones available to them, should the technology become readily accessible.

Unsolicited Electronic Communications

Under the Code, service providers must have procedures in place to deter "malicious communications" (which include the making of offensive or intentionally irritating telephone calls). They must have processes in place to deal with complaints and comply with relevant legislation.

Information and Advice

Service providers are required to provide certain information to customers. This includes the nature and capabilities of products and services (especially for parents and children), and information about the Code on their websites. They must provide their customers with a way of communicating any concerns to them.

Monitoring and Enforcement

A compliance regime deals with monitoring and enforcing service providers' obligations under the Code. Under this regime, any breach by the service provider may result in the TCF issuing a notice requiring that the breach be remedied, and, depending on the severity of the breach, the notice may require an internal review or independent audit of the service provider's compliance with the Code.

Where the TCF considers that a service provider has not complied with a notice of breach, it may issue a public censure notice to the service provider detailing the breach and setting out a timetable for compliance. If the service provider fails to comply within the given time frame, then details of the breach will be published in a variety of specified publications, including the New Zealand Gazette, the TCF's newsletter, and (at the TCF's discretion) in the national press, consumer bulletins or any relevant industry newsletter or magazine.

Premium Messaging Services

It should be noted that signatories to the TCF Premium Messaging Code (which sets out the rights and obligations of suppliers of premium messaging services to customers in New Zealand or supplied by a business operating in New Zealand) will be bound by the requirements of the Code in relation to the provision of premium messaging services to customers. This arises from the Premium Messaging Code's requirement that its signatories comply with the Code (even though the Code is voluntary).

Comparison with Overseas Models

A number of overseas jurisdictions have established codes of practice in relation to mobile content. For example, in the United Kingdom, six major mobile operators have signed up to the "code of practice for the self-regulation of new forms of content on mobiles", and in Australia, the Internet Industry Association has issued a code for industry co-regulation in the area of internet and mobile content.

The UK mobile content industry is well-established, and the UK code was one of the first of its type to be set up. While the UK code is based on high level principles, the UK Office of Communications (Ofcom) carried out a review of it in 2008, and commented that it is a good example of industry self-regulation and an effective tool to restrict young people's access to adult-only content.  In contrast, the Australian code is more prescriptive, while the New Zealand Code seems to have adopted the middle ground between these two codes.

Whether to Sign up to the Code

On the one hand, a business that signs up to, and subsequently complies with, the Code, will reassure its customers that it takes its social responsibilities seriously (including its obligations towards protecting minors). In addition, becoming a signatory will strengthen the Code and make it more effective, reducing the possibility of an alternative (and potentially more onerous) regulatory regime being put into place further down the line.

However, there are a number of obligations on signatories to the Code, and these may involve substantial costs. For example, the obligation to monitor public chat rooms 24 hours a day, seven days a week, could involve significant financial costs in putting appropriate monitoring systems into place. In addition, failing to ensure compliance could ultimately involve a business being issued with a public censure notice and receiving unwanted, adverse publicity. 

Therefore, businesses should carefully weigh up all the relevant considerations before deciding whether to sign up to the Code.

Before Signing up to the Code

Any telecommunications service provider to which the Code applies (whether by being a signatory to the Code itself or entering into an agreement with a content service provider that has signed up to the Code) will need to take appropriate steps to ensure that it will comply with the Code from the date that it signs up. In addition, it should give its content providers as much advance notice as possible of its intention to become a signatory, to ensure that they will also be compliant at the relevant date.

Conversely, a content service provider that signs up to the Code will not only need to ensure its own compliance with the Code, but will also need to give its telecommunications service providers and its own content providers as much advance notice as possible that it has doing so, to ensure their compliance with the Code.

Under the content provider's agreement with a telecommunications service provider or content service provider, it is likely that the content provider will be liable for any failure by it to comply with the requirements of the Code (unless this failure is the fault of the telecommunications service provider or content service provider). The ultimate sanction for failure to comply with the Code is that the telecommunications service provider or content service provider will receive a public censure notice and adverse publicity, rather than a financial sanction such as a fine. However, this sanction should not be under-estimated given the possible damage to a business' reputation caused by any breach, especially given current sensitivities around the use of technology to access inappropriate content.

Author

Earl Gray

Partner - Intellectual Property

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