Alongside the usual tide of dull figures about revenue streams and infrastructure uptake, Ofcom’s recent Communications Market Report featured detailed analysis on the holiday snaps we put on Facebook, how much time we spend editing our selfies and how much sleep we miss because of binge-watching Netflix.
While this stuff is certainly interesting, it does all beg the question – what does Ofcom actually do?
Ofcom is an industry regulator and it is one of the many regulatory bodies in the UK – organisations that monitor everything from education and charities to advertising, health and nuclear power.
Ofcom is the regulator for the communications industry, which includes television and radio as well as broadband and mobile services.
Ofcom is given powers by Parliament to maintain a healthy and stable communications industry, but their responsibilities are far wider than what you might think.
What are Ofcom responible for?
- Making sure everyone has access to decent broadband.
- Keeping an eye on ISPs to make sure they are doing their job and not defrauding customers.
- Making sure there’s quality content on TV and the radio from lots of different sources.
- Censoring offensive or inappropriate content that airs on TV or the radio.
- Making sure a universal postal service is available 6 days a week across the UK.
- Allocating the radio space used by wireless signals, so all frequencies across the spectrum are used optimally.
- Regulating the BBC
- Setting or collecting the TV licence fee.
- Helping to settle individual disputes between customers and service providers.
- Regulating the content or appearance of advertisements (that’s down to the ASA)
- Managing or regulating Post Offices.
- Regulating any newspapers or magazine publications.
On the other side of things, here’s a short list of what Ofcom are not responsible for:
Ofcom’s overall goal is to encourage a healthy market with lots of competition across all the different parts of the communications industry.
Are they trying to do too much?
Sorting out a postal system, censoring and rating TV content, monitoring the broadband industry, reviewing communications infrastructure, arranging the wireless signals used for police radios, mobile phone service and everything in between is a lot of weight for a single regulator to carry.
Also add into the mix social media and the internet, which Ofcom seems to have inherited most of the responsibility for, and that’s a lot of very different things a single regulator needs to be able to monitor and maintain.
Ofcom’s power comes through several Acts of Parliament, mainly the Communications Act 2003. This Act defines Ofcom’s role as a regulator and lets them set and enforce industry rules that providers have to follow. They can use fines or other penalties, along with the Competition and Markets Authority, to protect UK citizens and encourage healthy competition between companies.
Although they have the power to dish out punishments and enforce strict rules, Ofcom officially states that it will only do this as a last resort and that it has a “bias against intervention” – preferring to offer proposals and suggestions to providers instead of commands and punishments.
Punishments for bad practice
When a company does step out of line, Ofcom says it is willing to intervene.
We’ve recently seen plenty of evidence for this in the last 12 months where Ofcom fined Hull broadband provider KCOM for £900,000, Three for £1.6 million, Vodafone for £4.6 million and BT for a staggering £42 million.
Although Ofcom always operates with the interests of the UK consumer at heart, the regulator is also of great use to the businesses that make up the communications industry.
Infographics about the photos we upload to Facebook and how long we binge-watch on Netflix might seem trivial to us, but providers can use this information to build a clearer picture of their customers and help predict the services that are best needed.
Ofcom tend to get criticised for being ineffectual, and that’s likely because they try to be as hands-off as possible – to let the markets try to resolve themselves. However, as we have recently seen, Ofcom can and does impose harsh fines when they’re needed.
This approach might not be perfect, but the alternative is to give Ofcom an iron grip over the industry, which would hurt competition for everyone.