Getting Mobile with Distribution

Simone Brandon is an inhouse lawyer at Hutchison Telecoms and a former volunteer lawyer at Arts Law.

New regulation covering the provision of certain types of content on premium mobile services came into effect in July 2005. The Telecommunications Service Provider (Mobile Premium Services) Determination 2005 (No. 1) ('the Determination') was made under the Telecommunications Act 1997 and covers the provision of content via premium SMS or MMS on numbers with a 19 prefix and content on 'proprietary networks' which are essentially mobile content portals like 3, Vodafone live!, Optus Zoo and Telstra’s i-mode.

The Determination does the following:

• Prohibits the supply of 'prohibited content' – this is content that is equivalent to X or RC rating (see Classifications Categories, below).
   
• Requires that 'age restricted services' be restricted to users 18 years and over. These are services that contain content that is equivalent to the MA or R film ratings. The mobile carrier must verify each user’s age before access to the service is given. Where the age restricted service is accessed via SMS or MMS, it must only be provided on numbers beginning with a 195 or 196 prefix.
   
• Requires that chat services be supplied with appropriate safety measures and posting rules.
   
• Enables industry to develop self-regulatory schemes that will set out the detail of how the requirements of the Determination will be met and how any complaints in relation to content will be dealt with.

The Determination will be administered by the Australian Communications and Media Authority (ACMA), which came into being on 1 July 2005. Industry bodies are currently working on the first self-regulatory scheme. The Determination is only meant to be an interim measure as theDepartment of Communications, Information Technology and the Arts is undertaking a review of the regulation of mobile content and it is expected that legislative changes will be recommended.

Classification Categories

G – suitable for all ages

PG – parental guidance recommended for persons under 15

M – recommended for mature audiences 15 years and over

MA15+ – restricted to persons 15 years and over

R18+ – restricted to persons 18 years and over

X18+ – (sexually explicit activity) restricted to persons 18 years and over

RC – refused classification – cannot legally be shown in any medium

Content assessment

Films, games and publications are all subject to classification by the Office of Film and Literature Classification (OFLC) prior to being made publicly available. Content on mobiles will not be required to be classified by the OFLC, instead there is an obligation on mobile carriers and content providers to pre-assess content in order to ensure that no prohibited content is supplied and that age restricted content is limited to users 18 and over.

Content assessment will be carried out by authorised assessors who have been trained by the OFLC. The assessors are required to use the Guidelines for the Classification of Films and Computer Games to assess mobile content. This will present interesting challenges given that some mobile content is text only or still images, whereas the OFLC guidelines have been devised with films and games in mind.

It is highly likely that mobile carriers will require content providers to pre-assess content and stipulate in their contracts what level of content should be supplied. As age restricted content must be limited to customers 18 years and over, mobile carriers will rely on content providers to indicate whether content needs to be restricted.

For example, 3 recently provided live streaming and video content from Big Brother 5. Some video content was assessed by the provider as MA and therefore access to it was restricted. The provider also monitored the live content which was accessible to all customers to ensure that content provided did not go above the M level.

Content creators who deal directly with mobile carriers may benefit from obtaining OFLC training so that they can assess their own content.

Content in different media

It is important to remember that the regulation for content is currently different depending on how the content is accessed. As an example, assume an animator creates a short film and wants to screen the film publicly, provide it for viewing on the internet and supply it to a carrier so it can be downloaded by mobile customers.  The following restrictions would apply:

• Screen: the animator should get the film classified by the OFLC to publicly display the film. Say the film is classified as MA15+, this means that it should be restricted to audiences 15 years and older.
• www: the animator can put the film on the internet with no age restriction (see Internet Content, below).
• Mobile: under the Determination, the film must be restricted to users 18 years and over because it has been classified as MA15+.

Content creators need to bear classification and assessment issues in mind if they wish to distribute the content via a range of access methods.

Internet content

Internet content is regulated by the Broadcasting Services Act 1992. In this regulatory framework, "prohibited content" is content equivalent to RC or X. R content must be subject to a restricted access system, restricting access to users 18 years and over. MA internet content is not restricted to users 18 years and over as it is for mobiles.

Internet content is also covered by the Internet Industry Association’s Content Code of Practice ("IIA Code") which came into effect in May 2005. The IIA Code incorporates new provisions specifically aimed at the regulation of content delivered to mobile phones which are consistent with the Determination in relation to the restriction of MA and R mobile content and mobile content pre-assessment. Mobile content providers are required to comply with the IIA Code and the Determination.

Content rights

The advent of mobile content has also created another avenue to licence rights and obtain revenue. Often mobile rights are treated separately to internet rights and there is potential to generate further revenue by splitting the rights if a creator can find a willing licensee for each.

Beware of the cross-over however – if the mobile carrier wants exclusive mobile rights, it may want to ensure that a related company of another mobile carrier does not obtain any internet rights. Or the creator could have granted exclusive internet rights to one provider but then finds that a mobile carrier needs rights to promote the content on its website even though it will only make the content available via mobile phones. It is always best to be clear on the rights being granted.

Revenue share

Aside from a straight licence or assignment fee, a revenue share may be used. Some issues to consider are:

• If there is an advance, is it recoupable by the mobile carrier against revenue share?
   
• Is the revenue share calculated on number of customers or usage figures? Are any types of use excluded from the calculation?
   
• Will the revenue share still be payable if the content is sold as part of a content bundle?
   
• Will the content be age restricted? This will affect the number of customers who have access to the content.

What opportunities are there for mobile content?

Mobile content has come a long way since 3 launched Australia’s first 3G Network in April 2003, and with new 3G services becoming available this year the market for compelling mobile content is growing.

Do these technological advances actually turn into usage and dollars? The simple answer is yes – a significant proportion of the 16 – 29 year old segment of the mobile market use mobile content on a weekly basis.

Ring tones and wallpapers are mobile content categories that have proved very popular. However 3G allows for faster content delivery speeds making video and audio a worthwhile proposition. Mobile content covers are vast range of services including:

• Games – real-time multiplayer games that let people play real opponents
• Music – download or stream full length video and audio tracks
• Live streams – direct feeds from the Big Brother house, live surf cams
• Comedy – animation, stand up, short films, soap opera 'mobisodes'
• Mcards – picture messaging for all occasions
• Adult – erotic stories, centrefolds, videos
• Community – customers send in a picture or video for other members to view, rate and make comment.

Further technological advancements are imminent including location based services, mobile TV and real mobile commerce. Mobiles will become your wallet and television as well as your music player and gamer so there are huge opportunities to get creative.