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RE: Ofcom Discussion - Digital Dave - 06-03-2013 01:55
I've found something on the Ofcom website that sheds some light on this issue. It also illustrates Ofcom's bizarre thinking.
In 2008 a shopping channel named Smart Shop TV fell foul of Ofcom, who intended to fine the licensee. Ofcom seemed to be aware that the licensee 'Ebak Ltd' was a dormant company ever since formation, but there was a holding (parent) company linked to it called 'Smart Shop TV Ltd'. Presumably they expected this company to pay the fine.
On further investigation Ofcom discovered that the parent company was insolvent and would therefore be unable to pay the fine. This represented to Ofcom a 'change in circumstance' which enabled them to reconsider the licence, which they then revoked.
What does this tell us?
Using Ebak Ltd as an example it appears that Ofcom are happy for non-trading companies to be licensees as long as they have a linked parent company (or presumably a subsidiary) that is trading and is financially solvent. However, I don't think Ofcom would be happy with a random third party paying the bills on behalf of the licensee as it would make a mockery of their strict rules (thou shalt not sub-contract the licence etc).
With regard to SEL, Ofcom probably saw that the company had a trading subsidiary 'Sport Television Ltd' so were happy that commercial obligations could be met. They are presumably unaware that this company is now nearly £800,000 in debt and is in the process of being wound up. This is an exact repeat of the Ebak/Smart Shop scenario.
This must surely compromise the status of SEL as they have no parent company, thus they cannot pay fines or deal with any other financial obligations on their own, including paying the Ofcom licence annual fee.
Given this scenario, including the threatened sanction by Ofcom, I would think it inconceivable that SEL could continue as a licensee. This possible revocation seriously compromises the position of the company that's currently transmitting on SEL-licensed channels.
It'll be interesting to see what happens next!
Here's a quote from the Ofcom report on Smart Shop TV.
Condition 29(3)(b) of the Licence states that Ofcom may revoke the Licence if there is a change in the nature, characteristics or control of the Licensee such that, if it fell to Ofcom to determine whether to award the Licence to the Licensee in the new circumstances, Ofcom would not award the Licence to the Licensee.
Ebak Ltd, the holder of the Smart Shop TV Licence has remained a dormant company since its incorporation in March 2005 and never traded. The holding company of the Licensee, Smart Shop TV Ltd, entered into voluntary liquidation on 17 March 2008 . As Ebak Ltd never traded, Smart Shop TV Ltd, until it went into voluntary liquidation, funded the television broadcasting operations of the Licensee.
Given the Licensee was a dormant company and the Licensee’s holding company is now insolvent this effected a change in the nature, characteristics or control of the Licensee in such a way that Ofcom would not now award the Licence.
Ebak Ltd was notified on 20 March 2008 that Ofcom was minded to revoke the Licence. The Licensee failed to make any representations. Therefore Ofcom considered that it was appropriate to proceed with the revocation of the Licence with effect from 4 April 2008.
http://stakeholders.ofcom.org.uk/enforcement/broadcast-bulletins/obb107/
RE: Ofcom Discussion - Scottishbloke - 06-03-2013 22:25
Well I've been reading through these posts with interest having only just caught up with the events of this forum. I'm a busy man outside of this ceasepit of wank channel discussions
So all I'm going to say really is anything that is going to give you a hard on isn't ok in Ofcom's book's. Violence doesn't make you go rushing for the kleenex as it say, so it's ok
Nothing further to add because really because we're just going round in circles.
RE: Ofcom Discussion - BarrieBF - 06-03-2013 23:14
(06-03-2013 01:55 )Digital Dave Wrote: I've found something on the Ofcom website that sheds some light on this issue.
That's a very interesting find. I followed the link you gave and noticed this comment:
"Further investigation revealed that Ebak Ltd, the holder of the Licence was in fact a dormant company"
It seems odd that Ofcom would grant a license in the first place without knowing whether the applicant company was even trading or not.
RE: Ofcom Discussion - Digital Dave - 06-03-2013 23:30
^^^ Absolutely, Barry.
Ofcom's lack of due diligence is astounding. They give the impression of making scrupulous checks on licence applicants but this can't be the case. That's why I feel it's more than likely that they don't know about SEL being dormant, and if they do they probably don't know about their trading subsidiary being skint!
On a related note, a community radio station in West London has recently gone off the air. It never fulfilled its remit and was widely loathed by the community it was supposed to be serving, who lobbied Ofcom about it for four years.
Nothing was done and the station only handed back its licence because they were insolvent, and not due to any pressure from Ofcom. It's one of many examples of Ofcom not fulfilling its own remit. Instead, the quango prefers to waste resources chasing easy targets like the babe channels.
RE: Ofcom Discussion - eccles - 06-03-2013 23:56
(06-03-2013 23:30 )Digital Dave Wrote: On a related note, a community radio station in West London has recently gone off the air. It never fulfilled its remit and was widely loathed by the community it was supposed to be serving, who lobbied Ofcom about it for four years.
Nothing was done and the station only handed back its licence because they were insolvent, and not due to any pressure from Ofcom. It's one of many examples of Ofcom not fulfilling its own remit. Instead, the quango prefers to waste resources chasing easy targets like the babe channels.
Yet oddly when a community radio station is in temporary difficulties and goes off air for a few weeks or broadcasts recorded material instead of live speech but makes genuine efforts to fix the problem Ofcom comes down like a ton of bricks and pulls the licence.
At times they act more like Traffic Wardens than Police.
RE: Ofcom Discussion - eccles - 07-03-2013 00:07
Heres an example of the sort of genuine issue that Ofcom should be addressing.
Evening Standard Wrote:The full extent of links between Tower Hamlets council and a controversial Bangladeshi TV channel can be revealed today.Evening Standard
An investigation by the Evening Standard has found Channel S provided such favourable political coverage to mayor Lutfur Rahman that regulator Ofcom ruled some of its programmes illegal.
Shows on the satellite station, based in Walthamstow, did not “inform and educate” but were broadcast to promote Mr Rahman “in a positive light”.
The problems occurred under previous owner Mohammed Ferdhaus, who was jailed for fraud in 2008. Ofcom is powerless to act as Channel S, which is watched by tens of thousands, is now under new management.
The mayor employs Channel S journalist Mohammed Jubair as a personal adviser on a publicly funded salary. Tower Hamlets ... spent £12,000 sponsoring a Channel S awards ceremony last May.
Mr Jubair appears to have played a role in the payment, according to documents released under freedom of information laws.
Ministers are so concerned about Ofcom’s inability to tackle the issue that they are preparing to introduce legislation. Local government minister Brandon Lewis said: “Such actions are not just a misuse of public funds, they are harmful to local democracy and an independent, free media.”
Mr Rahman, an ally of Ken Livingstone, was elected as an independent in 2010. He has been supported by coverage from Channel S, which broadcasts to the borough’s 80,000-strong Bangladeshi population. Ofcom has found that its coverage of Tower Hamlets breached broadcasting rules five times since 2008.
The latest censure, last month, said an advert featuring Mr Rahman misled the public. After the previous “serious breaches”, the regulator said it wanted a “significant fine”, but the station was beyond reach as its holding company had entered liquidation and re-formed under new owners.
...
...Peter Golds, leader of the local Conservative group, said: “There is a conflict of interest. Mr Jubair cannot be on the council payroll while reporting on the council.”
Mr Ferdhaus still presents shows on the channel. At Croydon crown court in 2008, he was jailed for 18 months over “crash-for-cash” bogus accidents....
...
Channel S said: “Channel S Television Ltd in its present form has only been trading since the end of June 2012. Everything that you mention was prior to June 2012 and I cannot comment on it as it was under different management at that time.”
RE: Ofcom Discussion - blackjaques - 07-03-2013 07:51
(06-03-2013 23:30 )Digital Dave Wrote: ^^^ Absolutely, Barry.
Ofcom's lack of due diligence is astounding. They give the impression of making scrupulous checks on licence applicants but this can't be the case. That's why I feel it's more than likely that they don't know about SEL being dormant, and if they do they probably don't know about their trading subsidiary being skint!
On a related note, a community radio station in West London has recently gone off the air. It never fulfilled its remit and was widely loathed by the community it was supposed to be serving, who lobbied Ofcom about it for four years.
Nothing was done and the station only handed back its licence because they were insolvent, and not due to any pressure from Ofcom. It's one of many examples of Ofcom not fulfilling its own remit. Instead, the quango prefers to waste resources chasing easy targets like the babe channels.
It seems to keep their paymasters happy, though.
RE: Ofcom Discussion - continental19 - 08-03-2013 21:11
Unless i'm living in a time wharp, but as far as i'm aware we are living in the year 2013 in the 21st century. The mere fact that we are having all these discussions and issues about the beautiful female form is quite frankly beyond me and the common denominator is Ofcom. I can't believe it i really can't, it's so pitiful that in a so called demorcratic society that a womans Vagina would still be causing so much controversy, i find it truly unbelievable!!
Yet the majority of our Europeon neighbours have no issues with pornography at all, you talk about the british stiff upper lip, what a load of bollocks.
Right thats my monthly Ofcom rant over with ah i feel better now
RE: Ofcom Discussion - eccles - 09-03-2013 00:28
(07-03-2013 07:51 )blackjaques Wrote:(06-03-2013 23:30 )Digital Dave Wrote: ...It's one of many examples of Ofcom not fulfilling its own remit. Instead, the quango prefers to waste resources chasing easy targets like the babe channels.
It seems to keep their paymasters happy, though.
By which I assume you mean the politicians, but here is a thought about money.
It has been said many times, including by me, that fines go to the Treasury, not Ofcom, so there is no incentive for Ofcom to fine channels. While it might be true that there is no direct link, Ofcom recieves some of its funds as Treasury grants. The funding mechanism is unknown (to me) but presumably Ofcom submits a bid based on what they calculate they need and either the shortfall from fees, or areas they cannot reasonably ask industry to fund. (For example, car tax disks are meant to fund road repairs, not traffic wardens and courts hearing speeding cases).
Evaluation of the bid might take into account factors like workload, effectiveness and possibly cost to income ratio. How many complaints does Ofcom receive? How many merit investigation? How many are substantiated?
After all there is no point in dragging broadcasters through a 6 month investigation process for every trivial vindictive misguided complaint, only to reject 99% in the first few minutes of a formal hearing. The CPS only prosecutes when it thinks there is a 50% chance of conviction, meaning some cases where they or the police are convinced someone is guilty as hell never get to court because a conviction is dubious. Even then the CPS only prosecutes when the severity of the case outweighs the cost of bringing it (see below).
The Treasury might therefore take account of the number of detailed investigations, the number of sanctions decisions, positive outcomes and typical level of fines before deciding how much funding to give.
This is not entirely unreasonable, a prosecution body that never brings or wins cases cannot really expect a hefty subsidy even if is does a lot of unpublished investigation or preventative work.
However it might mean there is indirect scope for Ofcom to be rewarded for investigating and fining broadcasters. (The amounts are small compared to Ofcoms overall subsidy but large relative to the staff costs of the complaince unit.)
Quote:Code for Crown Prosecutors
The Public Interest Stage
4.12
f.Is prosecution a proportionate response?
Prosecutors should also consider whether prosecution is proportionate to the likely outcome, and in so doing the following may be relevant to the case under consideration:
The cost to the CPS prosecution service and the wider criminal justice system, especially where it could be regarded as excessive when weighed against any likely penalty (Prosecutors should not decide the public interest on the basis of this factor alone. It is essential that regard is also given to the public interest factors identified when considering the other questions in paragraphs 4.12 a) to g), but cost is a relevant factor when making an overall assessment of the public interest).
CPS: Code for Crown Prosecutors
RE: Ofcom Discussion - eccles - 09-03-2013 01:01
(06-03-2013 01:55 )Digital Dave Wrote: I've found something on the Ofcom website that sheds some light on this issue. It also illustrates Ofcom's bizarre thinking.
In 2008 a shopping channel named Smart Shop TV fell foul of Ofcom, who intended to fine the licensee. Ofcom seemed to be aware that the licensee 'Ebak Ltd' was a dormant company ever since formation, but there was a holding (parent) company linked to it called 'Smart Shop TV Ltd'. Presumably they expected this company to pay the fine.
On further investigation Ofcom discovered that the parent company was insolvent ...
There are two interesting points about this.
If the subsidary business is a limited company, liability is just that, limited. Its business 101. A parent company limits liability to the amount of the issued share capital. If there are significant setup costs, the parent might already have shelled out the share capital meaning they cannot be pursued for a penny extra. (This does not apply to all types of "company").
Second when a company is declared insolvent what assets is does have are sold to pay the creditors. They recieve less than 100% of what they are owed but usually more than nothing. The fewer creditors there are the thicker the pot is spread. In some cases the owners of a business are creditors (wages, loans, rent, format rights, trademark use, equipment hire), as well as third parties like staff, suppliers and the taxman. Cases vary, but by not pursing their claim Ofcom could be maximsing the payback to the ultimate owners of broadcasters that have been sanctioned.
While I am not encouraging Ofcom to hammer broadcasters and their owners I do think there should be consistency and any suggestion of selective leniency should be avoided. Being insolvent should not nbe a Get Out Of Jail Free care that enables a broadcaster to continue operation with no prospect of punishment if they foul up.