Adjudication of Ofcom Content Sanctions Committee

							Ofcom Content Sanctions Committee

Consideration of        Digital Television Production Company Limited
                        (XplicitXXX)


For                     Programme Code breaches in showing sexually
                        explicit promotional material free to air particularly
                        at a time when it might be viewed by children but
                        also when it might cause offence to others


On                       April 

Decision to Fine        £,




Summary of Decision
For the reasons set out in full in the Decision of the Ofcom Content Sanctions
Committee, the Committee found as follows:

     Digital Television Production Company Limited (“DTPC”) is licensed by
      Ofcom to run the satellite service “XplicitXXX” (formerly Pout/Pout Uncut.
      It transmits adult material which, at the time of the offence, was encrypted
      and available only to subscribers after . hours. On  April  from
      : to :, DTPC broadcast in a free to air slot, a repeating six minute
      loop of material promoting its encrypted transmissions (“freeview”). The
      promotional material was itself sexually explicit. It showed semi- and near-
      nudity in explicitly sexual situations; showed simulations of intercourse,
      oral sex, masturbation and orgasm; featured captions with explicit sexual
      language and captions promoting amongst other available films one
      entitled Anal Cream Pie. XplicitXXX had admitted and Ofcom had recorded
      the following breaches of the Programme Code: sections . (the General
      Requirement for Taste and Decency), . (Family Viewing and the


                                                                                   
    Watershed) and . (Sex and Nudity). The matter was also referred to the
    Content Sanctions Committee (“the Committee”) for consideration of a
    statutory sanction. The Committee heard representations from DTPC
    before deciding whether to impose a sanction.

   The Committee viewed the Code breaches as serious. Its greatest concern
    was the risk that a child could see such material. The material was also
    unsuitable for transmission in the period after the watershed (.
    hours). The material was not borderline, but very clearly breached the
    Code. Ofcom has a statutory duty to protect the young and apply overall
    standards with regard to harm and offence. The Committee noted DTPC’s
    representations that the Code breaches were inadvertent rather than
    deliberate. On that basis, the Committee concluded that the error was the
    result of management failure to institute adequate training and
    operational procedures necessary to avoid the risks of a child viewing this
    material and effectively to review transmissions as they were made in
    order to detect and immediately correct any mistakes. This was because, in
    the Committee’s view, DTPC had adopted an approach to its broadcast
    material that was excessively complacent, unfocused and insufficiently
    protective of the interests of children. Any broadcaster licensed to
    transmit adult encrypted material which is restricted to subscribers but has
    free to air promotions, has an obligation to ensure that no sexually
    explicit material is shown even inadvertently in free to air promotions. Any
    such infringement is not to be tolerated.

   The Committee took into account as aggravating the seriousness of the
    present Code breaches previous, recent, comparable infringements by
    DTPC in relation to XplicitXXX, and the fact that DTPC had been given a
    previous written warning from Ofcom that any further recurrence might
    result in a statutory sanction.

   The Committee took into account as mitigating the breaches DTPC’s frank
    admission that it had breached the Code and the contrition it expressed;
    the efforts it had made since the matter was brought to its attention to
    prevent any further recurrence, particularly the appointment of a channel
    manager with responsibility for compliance. The Committee nevertheless
    noted that there appeared to be a continuing lack of full formal
    compliance training and operational procedures to prevent or detect and
    correct such mistakes. The Committee also noted that Ofcom had received
    no complaint from any member of the public about the “freeview”


                                                                               
     broadcast on the  April . Ofcom became aware of the issue through
     an informal approach from a competitor of DTPC.
    The Committee determined that the Code breaches were so serious that a
     sanction by way of a financial penalty was necessary. The applicable
     statutory maximum was a fine of £,, payable to Ofcom for
     forwarding to The Treasury. The Committee gave serious consideration to
     a fine in six figures which it considered may become the norm for such
     serious Code breaches. However, it took account of DTPC’s representations
     about its financial position and the compliance steps it had taken and
     concluded that on this occasion, a six figure sum would be a
     disproportionate penalty . It concluded that in view of the seriousness of
     the infringement and taking into account all the circumstances, an
     appropriate fine was £,.

Decision
    The Ofcom Content Sanctions Committee met to hear the submissions of
     Digital Television Production Company Limited (“DTPC”) before
     considering whether to impose sanctions on it for breaching the relevant
     Programme Code (formerly the Programme Code of the Independent
     Television Commission) by transmitting free to air sexually explicit
     material on its XplicitXXX service on  April  from . to ..



The need to consider sanctions
    DTPC is licensed by Ofcom to run XplicitXXX as a television service
     transmitting adult material in encrypted form to subscribers. The licence
     requires DTPC to comply with the Code. It must therefore ensure that no
     explicit images are included in unencrypted material transmitted before
     the : ‘watershed’, and that any material transmitted in free to air
     (promotional) slots is suitably edited in accordance with Ofcom’s
     Programme Code. It is therefore to be expected that any material
     transmitted by XplicitXXX on a free to air basis in order to promote what is
     available in encrypted form to subscribers, should not itself be sexually
     explicit.

    On  April  from : to :, XplicitXXX broadcast on a free to air
     basis a continuous loop of promotional material that was itself sexually
     explicit. It showed semi- and near- nudity in explicitly sexual situations;
     showed simulations of intercourse, oral sex, masturbation and orgasm;


                                                                                   
     featured captions with explicit sexual language; and captions promoting
     other available films one entitled Anal Cream Pie.

    DTPC readily and frankly admitted that this promotional material as
     broadcast that evening by XplicitXXX infringed Ofcom’s Programme Code
     in force at the time under the Communications Act , section  and
     Schedule , paragraph  and in particular, the provisions of that Code,
     sections . (The General Requirement for Taste and Decency), . (Family
     Viewing and the Watershed, and . (Sex and Nudity).

    Ofcom accordingly found DTPC in breach of the Code and referred the
     matter for consideration of sanctions to the Ofcom Content Sanctions
     Committee.

    The Ofcom Content Sanctions Committee met on Tuesday  July  to
     hear representations from DTPC in relation to the possible imposition of
     sanctions for breaching the Code.


Relevant considerations
    The Sanctions Committee regards the admitted breaches of the Code as
     serious. Its gravest concern is the fact that the material could easily be
     viewed by a child, as DTPC readily conceded, but it also had concerns
     about causing offence to others. The material was not a borderline
     example of what could or could not be shown on a free to air promotion
     for the channel, but a very clear breach of the relevant provisions of the
     Code. It was rightly acknowledged by DTPC to be in this respect
     “unacceptable”. The Committee emphatically rejects DTPC’s contrary
     submission to the effect that the breaches were insufficiently serious to
     warrant a financial penalty.

    The Sanctions Committee noted DTPC’s representations that the
     transmission of this material on a free to air basis both before and after
     the watershed was not a deliberate and cynical flaunting of the Code to try
     to increase XplicitXXX’s market share in the increasingly competitive adult
     market, that XplicitXXX’s market share did not in any event increase after
      April  and that it remains one of the smallest of the  or so
     channels competing in that market. The Committee equally noted the
     assurances given on behalf of DTPC that the true reason that this material
     had been broadcast on a free to air basis was that the regular scheduler
     was on holiday. A junior substituting for her mistakenly confused two


                                                                                  
     tapes in identical containers, with identical titles and identification
     numbers, and selected for transmission before the watershed, a tape that
     should only have been shown during the time when the encrypted service
     was being broadcast.

    Having heard DTPC’s submissions, the Committee concludes that the cause
     of the confusion was DTPC’s lack of appropriate management control. This
     was evidenced by negligently failing internally to devise, implement and
     document effective training and operational procedures to avoid the risk
     of a child viewing this material. It was also evidenced by failure to
     undertake an effective scheme of reviewing material as and when it was
     being broadcast so that if such material inadvertently became available to
     view by a child, the error was immediately detected and immediately
     corrected. In this case, these failures were aggravated by the fact that the
     material had continued to be shown repeatedly over a one and a half hour
     period, both before and after the watershed. The Committee concludes
     that these failings in turn resulted from an approach on the part of DTPC
     that was excessively complacent, unfocused and disregarding of the
     interests of children. The Committee emphatically rejects DTPC’s
     submission that failing to prevent this material being available to be
     viewed by a child was the sort of mistake not uncommon in any start-up
     company, and the implication that it ought to be tolerated. Any
     broadcaster licensed to broadcast adult material encrypted and restricted
     to subscribers has a corresponding obligation to ensure that no sexually
     explicit material is shown, even inadvertently, on a free to air slot which is
     freely accessible to children and others. Ofcom has a statutory duty
     pursuant to the Communications Act , section  to ensure that
     persons under the age of  are protected and to have regard to audience
     expectations for this type of service. Such infringements are not to be
     tolerated.

   Moreover, there have been previous, recent, comparable infringements by
     XplicitXXX. Viewers had previously complained of the transmission of
     sexually explicit promotional material free to air on this channel on
      December . XplicitXXX explained on that occasion, that there had
     been a technical error and assured Ofcom that this would not recur.
     However, it did recur on ,  and  December , and briefly on
      and  January . Ofcom again accepted the explanations of
     technical error, but in February , Ofcom gave DTPC written warning


                                                                                    
     that the transmission of such explicit sexual material unencrypted was
     unacceptable and demonstrated a worrying failure in compliance
     procedures. It made it plain to DTPC that any further recurrence might
     result in the consideration of a statutory sanction. In these circumstances,
     the Committee found it surprising that DTPC had made insufficient
     procedural changes after those earlier breaches to prevent further
     occurrences. DTPC submitted however that the Sanctions Committee was
     not entitled to take previous Code breaches into account but should
     confine itself to the breaches which occurred on  April . The
     Committee agrees with this submission to the extent that it should not
     now impose any sanction for the previous infringements. However, the
     Committee would reject any submissions that it is not entitled to take the
     previous infringements into account as an aggravating circumstance
     relevant in considering whether to impose a statutory sanction for the
     infringements on  April , and if so, at what level. Ofcom’s Outline
     Procedures for Statutory Sanctions in Content Cases (a copy of which was
     sent to DTPC before the hearing), clearly states that Ofcom will impose a
     statutory sanction not only if it believes that a broadcaster has deliberately
     or seriously breached the terms of its licence conditions or Ofcom’s
     statutory Codes, but also if Ofcom believes that it has done so repeatedly.

   The Committee accepts and also takes into account the contrition
     expressed on behalf of DTPC, and the efforts it has taken since  April 
     to prevent any further recurrence, particularly the appointment of
     Mr James Wright as channel manager with direct responsibility for
     compliance.

   Nevertheless, the Committee was surprised to be told that even now
     XplicitXXX still lacks full and formal compliance training routines and
     written procedures devised to prevent, or failing that, to detect and
     correct mistakes being made when regular staff are absent or in any other
     circumstance.

   The Sanctions Committee takes into account that Ofcom had received no
     complaint from any member of the public with regard to  April ,
     notification to Ofcom having been by a competitor of XplicitXXX.




                                                                                  
Appropriate sanction
   Taking all of the above considerations into account, the Sanctions
     Committee determines that a sanction by way of fine is necessary, that any
     greater sanction by way of revoking the licence is not yet necessary and
     that DTPC’s suggestion of the lesser penalty of requiring XplicitXXX to
     broadcast a statement of Ofcom’s finding would in the circumstances be
     inappropriate.

   By the Communications Act , section (), a financial penalty for
     DTPC in this case may not exceed the greater of £, or five per cent
     of XplicitXXX’s qualifying revenue for . The Committee accepts the
     figure given by DTPC as the relevant qualifying revenue for the service and
     consequently, the maximum fine that could be imposed in this case is
     £,. Once received by Ofcom, any fine is forwarded to The Treasury.

   On the view the Committee took of the seriousness of the Code breaches
     that had occurred and of all the other considerations mentioned above,
     the Committee gave very serious consideration to a fine in six figures,
     which it considered could well become the norm for such breaches.

   However, the Committee had been urged to take into account the
     information which it also accepted, that in  the XplicitXXX service
     suffered a substantial loss. The Committee therefore enquired further, and
     was told and accepts that the qualifying revenue accrued entirely in the
     second six months of  after the start of transmissions by XplicitXXX in
     July  under its then name, Pout Uncut; the figures given for the
     accounts of the Group of which DTPC forms part for the year to March
     ; and the figures given for the turnover from all of DTPC’s active
     services.

   DTPC submitted that the fact that XplicitXXX was a loss-making channel
     run by a loss-making owner meant that a large fine would cripple a start-
     up business and would accordingly be a disproportionate penalty. The
     Committee carefully considered this submission and agrees it has some
     force. Therefore, on this occasion, the Committee decided not to impose a
     fine at the higher level likely to become the norm for such cases in the
     future. It concludes that on this occasion, the fine that would register the
     seriousness of exposing a child to the risk of viewing such sexually explicit
     material, as well as the potential offence to others, whilst taking into




                                                                                    
     account all the circumstances outlined above, and remaining
     proportionate, is £,.

Conclusion
   For seriously breaching the Code by transmitting sexually explicit
     material in its XplicitXXX service on  April  on a free to air basis
     from . to . hours, DTPC is fined £,.




                                                                                 