ULTV challenges Ofcom's 'VOD poll tax'

United for Local Television has pledged to fight Ofcom's proposed "poll tax" for video on-demand providers in the UK.

Last December, the media watchdog started regulating "TV-like" VOD content under a revised version of the European Union's Audio Visual Media Service directive.

Under the planned framework, Ofcom will eventually hand over direct VOD regulation to independent body ATVOD, which will ensure that all content works within guidelines for taste and decency, while also handling compliance with sponsorship requirements.

To cover the estimated £400,000 annual costs of contracting regulation to ATVOD, Ofcom has proposed the collection of an as-yet-undecided annual flat-fee from all registered providers in the UK.

In response, ULTV expressed concern that small-scale local broadcasters providing TV-like VOD services could struggle to pay the fee if it was disproportionately set.

ULTV believes that Ofcom has not sufficiently looked beyond the major broadcasters and service providers in its VOD consultation, meaning that smaller players could be squeezed out of the market.

The situation could be exacerbated by the arrival of Project Canvas - the BBC-led joint venture which aims to bring enhanced VOD services to Freeview and Freesat - as niche providers could be dissuaded from joining the open platform due to Ofcom's flat fee cost.

However, ULTV now believes that Ofcom should "scrap the tax" entirely after the government recently laid down new regulations before parliament.

Last week, culture secretary Ben Bradshaw signed a statutory instrument indicating that the VOD fee should be "justified and proportionate" while also taking into account "the provider who will be required to pay it".

Welcoming the development, ULTV spokesperson Daniel Cass said: "Ofcom's proposed poll tax caused a great deal of concern to small-scale VOD groups. We are delighted that the government has listened to our concerns when framing this new legislation.

"We find it very difficult to see how Ofcom's poll tax would be compatible with the principles laid down in statute which require fees to be 'justified and proportionate'. However, we will not declare victory until Ofcom finally promises to consult on a fair fee structure for VOD regulation."

He added: "We trust Ofcom will now work with industry to devise a sensible fee structure based on service providers' ability to pay in line with the government's regulations."

When asked for a reaction by Digital Spy, an Ofcom spokesman said: "We have not yet made any decisions on fee structures or level of fees."