Statement by Channel Television in Response to Fine by Ofcom’s Content Sanction Committee and Summary of Davenport Lyon’s Findings

LONDON -

- Channel Asks Ofcom to Call Police to Investigate Viewer Fraud

Today Ofcom published its conclusions and sanctions on Channel Television (”Channel”) in relation to its investigation of the British Comedy Awards (”BCA”) 2004 and 2005.

We note their conclusions.

Channel has also today published a summary of the findings of Davenport Lyons’ independent investigation into the BCA 2005 conducted on behalf of Channel Television. All evidence gathered by Davenport Lyons and Channel has been previously provided to Ofcom.

It should be noted that it was because of the actions of Channel Television that the BCA 2005 was included in the Deloitte Review of ITV programmes using Premium Rate Services (”PRS”). Channel had become aware that a problem (known as the “as live” issue) had arisen in this programme. The problem arose as a result of the fact that the BCA ceremony had been broadcast live up to 10:30 p.m., and was then interrupted by the ITN News until 11 pm. When transmission resumed after the News, it appeared that the BCA programme was still live when in fact it had concluded at around 11 p.m. This meant that invitations to vote during the last thirty minutes of the transmitted programme were not valid as the event had concluded some half an hour earlier. In the course of the Deloitte investigation, it became clear that the same “as live” issue had occurred in BCA 2004.

Channel Television, as compliance licensee, has always accepted responsibility for the “as live” failures in both programmes. Such failure was not conceived out of fraud or deception, but out of error. It is not suggested that the failure was in any way deliberate. Channel Television has complied more than 3,000 hours of some of the biggest shows in television, many with a central PRS element such as The X Factor and Britain’s Got Talent, without any Code breaches. Channel Television deeply regrets this uncharacteristic oversight and apologises unreservedly.

The second issue that emerged in the course of the Deloitte investigation is termed the “selection” issue. To assist Deloitte’s investigation, Channel obtained the minute-by-minute voting record for the People’s Choice Award. This revealed that at the point at which the Award had been made, the announced winners, Ant & Dec, had not received as many votes as Catherine Tate. Channel immediately informed ITV and Deloitte of this discovery. Soon afterwards, ITV removed BCA from the scope of the Deloitte Review and initiated a separate investigation by the law firm, Olswang, under legal privilege. Olswang’s summary findings were published on 8th May 2008.

Olswang stated that a number of key individuals had declined to co-operate with its investigation, while a number had agreed to provide written comments, but not to meet with them. As a result, Olswang stated in their published summary that they had been unable to reach any firm conclusions in relation to a number of the issues they had investigated. Furthermore, some of the individuals that spoke to Olswang subsequently declined to speak to Channel and or Ofcom on the basis that they had already provided their accounts to Olswang. However, ITV plc has so far refused to share any statements or information obtained by Olswang beyond their published summary, on the grounds that such material is legally privileged.

Channel Television is profoundly dissatisfied that Ofcom, due to their lack of statutory powers to require information or assistance from third parties, have had to reach conclusions on the “selection” issue without full knowledge of what happened before, during and after BCA 2005. Channel, as is acknowledged by Ofcom, had no part in the deception. It is highly unsatisfactory that despite years of separate investigations it has been impossible for the production company, Olswang, Channel, or Ofcom to establish with certainty what happened that night.

Channel Television sought and still seeks to get to the truth of what happened. A number of people have declined to participate in a meaningful way with any of the enquiries. There have been widely contrasting versions of events given together with allegations and denials of knowledge and or involvement from those involved with the production company, ITV Network, ITV plc, Siren and Eckoh. Channel has spent a quarter of a million pounds and two and a half years trying to do establish the full facts. It is a matter of public importance to identify who was involved with what appears to have been a criminal conspiracy to defraud. Channel Television, therefore, have today asked Ofcom to take the simple, constructive and necessary step of referring this matter to the police.

Mick Desmond, Chairman of Channel Television, said: “We have always fully accepted responsibility for the “as live” issue and apologise unreservedly. Channel is rightly proud of its strong track record in compliance. This is the first time we have been before the Sanctions Committee for a breach although we’ve complied thousands of hours of television including some of the biggest shows on British television with telephone voting elements such as The X Factor and Britain’s Got Talent.

Channel Television asked Davenport Lyons to conduct a full investigation into the issues that arose in the Comedy Awards 2005. We have today published the summary of their findings. It’s worth remembering that in 2005 neither Ofcom, nor the industry as a whole, could reasonably have anticipated or foreseen that viewers’ votes might be substituted or falsified. Channel Television is keen to finalise the investigation into what happened at the Comedy Awards 2005. Ofcom acknowledges that they are unable to go further in their investigation into the viewer fraud due to their limited statutory powers. Channel takes the view that it is in the public interest, as well as the interest of Channel Television and its shareholders, that further investigation must take place. That is why we have today asked Ofcom to refer this matter to the police. Only in that way can we, the industry and the public be certain that the deception that took place at Comedy Awards, has been fully and transparently investigated and the culpability of those involved identified. We would welcome such an investigation and Channel, its employees and its advisors will cooperate at every level. We invite all others involved in the Comedy Awards to do the same.”

Notes to Editors:

Why only Channel Television is being fined

In line with the ITV Networking Arrangements, when ITV Network commissions a programme from a producer it does not carry out the programme’s compliance. The responsibility for compliance is undertaken by one of the 15 Regional Channel 3 licensees.

Independent Producers are free to select who they want to comply their programmes. Presently only two options are ITV Broadcasting (the aggregation of all 11 ITV plc owned licensees) and Channel. Some 60% of independent producers choose Channel and it was part of the Carlton/Granada merger undertakings in 2003 that an independent compliance function should be available.

In recognition of the particular compliance responsibilities accepted by the compliance licensee under the ITV Networking Arrangements, if a network programme is found to be in breach of the Code, Ofcom (and its predecessor the ITC) fine the compliance licensee alone, although Ofcom have recently decided to change their approach with effect from 2010.

Section 41 of the 1990 Broadcasting Act provides Ofcom with the power to impose a financial penalty on a Channel 3 licence holder of a maximum of 5% of its qualifying revenue, i.e. revenue from broadcast advertising and sponsorship.

PhonepayPlus (the PRS regulator) Tribunal into Eckoh

PhonepayPlus is conducting a formal investigation into Eckoh in relation to the BCA 2005, culminating in Eckoh attending a PhonepayPlus tribunal on 22 January 2009. However, the tribunal took the decision to adjourn pending the outcome of Ofcom’s investigation. Channel believes the PPP+ case should have been concluded before Ofcom reached their final conclusions.

Summary of Davenport Lyons’ Findings

Background of Investigation

Channel Television Limited (”Channel”) was the compliance licensee for the British Comedy Awards 2005 (”BCA 2005″) pursuant to a tripartite agreement dated 8 May 2002 and as such was responsible for performing the compliance role in respect of the programme. Channel was asked by Ofcom on 29 January 2008 to answer various questions in relation to the programme. On 11 February 2008 Davenport Lyons were asked by Channel to assist in the investigation and gathering of information to enable Channel to respond to the enquiries made by Ofcom. In particular we were asked to try to discover how and why the wrong candidate was selected as the winner of The People’s Choice Award.

These enquiries included, but were not limited to, investigating how The People’s Choice Award votes were collected and recorded and precisely how the winner was announced, what measures were in place in 2005 in relation to the compliance of the Premium Rate Services voting and any measures that have been implemented since, and obtaining information as to the events in the studio on the evening of 14 December 2005 when the BCA 2005 took place.

Channel provided us with all the documentation in its possession and notified ITV Network Limited and Michael Hurll Television Limited, the other parties to the tripartite agreement of our involvement in the matter.

We were aware at that time that Olswang had previously been instructed by ITV plc to undertake an enquiry into certain aspects of the BCA 2005. Although we did not (and do not) understand the role of ITV plc (as opposed to ITV Network Limited) in the programme, or the locus of that company to instruct its own lawyers in relation to it, we understood that Channel would be provided with all relevant documentation and material which had been obtained by Olswang during their investigation.

ITV plc / Olswang

We began our enquiries by requesting copies of relevant documentation and material from ITV plc/Olswang. On 4 March 2008 we were informed by ITV plc, through Andy Griffiths the Head of Legal Affairs, that when they received the final Olswang report and were able to establish the material upon which Olswang had relied, ITV plc would tell us which documents it proposed to make available to Channel for the purposes of its investigation as Compliance Licensee.

Following Olswang’s final report, we received a summary of their findings and copies of certain documents from ITV plc on 2 May 2008 but virtually all had been previously supplied to us by Channel. We requested ITV plc to supply the entire documentation upon which Olswang’s report was based but were informed that ITV plc’s position was that Olswang’s full report was legally privileged along with all the statements and contemporaneous notes of interviews. The refusal to provide this material not only denied us access to relevant information but also resulted in some witnesses refusing to co-operate with us on the grounds they had already disclosed all relevant information to Olswang.

Eckoh Technologies Limited (”Eckoh”)

In view of the subject matter and nature of the enquiries from Ofcom we believed that we should also seek at an early stage all relevant information and documentation from Eckoh which had been contracted by ITV plc or ITV Network Limited to provide the premium rate telephony services in relation to the public vote for the Peoples Choice Award. We believed that Eckoh would not only be able to explain in detail the process for recording/monitoring the votes cast by the public, but would also have electronic/documentary evidence which may assist in providing the information requested by Ofcom. Our objective was to obtain the information from Eckoh, in particular the raw contemporaneous data, before interviewing other potential witnesses who were present in the studio on the evening of 14 December 2005.

We contacted Tom Hines, the Accounts Director at Eckoh who had been present at the BCA 2005. However, unfortunately, despite numerous attempts we were unable to obtain any information or documentation from Eckoh and they would not agree to meet with us. We were informed on 23 May 2008 that Eckoh were only prepared to co-operate or provide any information if Ofcom made its request directly to them. Also Michael Bouvier, formerly of Eckoh and now of ITV Consumer, refused to answer any questions from us, and we understand he did not co-operate with Olswang.

Siren World Wide Limited (”Siren”)

We also contacted Siren, who were also contracted to manage telephony services for ITV Network. However, after initially declining to speak to us due to confidentiality issues, they confirmed that the BCA 2005 was not included in their agreement with ITV Network. There appeared to be contemporaneous evidence that contradicted this but regardless of that they continued to refuse to answer any questions.

Other Individuals

Although we had been unable to obtain any further information/material from ITV plc and Eckoh, we proceeded to seek to contact a number of potential witnesses who were involved in the production and/or present in the studio on 14 December 2005.

We were able to interview the following individuals (but note the individuals marked with a * only involved an informal discussion over the telephone): -

Michael Hurll (Executive Producer)

*Paul Pascoe (Group CEO of Unique Communications)

Vijay Amanarni (Head of Production)

Dave Morgan (Production Manager)

*Stephen Stewart (Director)

*Anthea Poli (Assistant Producer)

*Sarah Wood (Production Co-ordinator)

*Helen Ringer (Ethos Operator)

Keren Elliot (Event co-ordinator)

*Jo Cole (Stage Manager)

*Alan Conley (Stage Manager)

*Lisa Rolandi (Script Supervisor)

*Sue Davies (Script Supervisor)

The following people were reluctant to provide us with information: -

Helen Kristic (Producer) eventually spoke directly to Channel to confirm that she was considering whether to let us have a copy of the statement she provided to Olswang. Channel contacted her again in September 2008 with some specific questions but her only response was to enquire as to why ITV / Olswang would not give us her statement.

David Harvey (Celebrity Producer) was reluctant to speak further to us on the basis that he had told Olswang all he knew, which was very little.

Michael Hurll (Executive Producer) refused to be interviewed a second time by us when we needed to clarify certain further information that had been disclosed to us as a result of our on-going enquiries.

ITV Network

We also contacted the following individuals at ITV Network:

Jane Turton (Director of Rights & Business Affairs) confirmed that Jane Marshall at ITV Consumer was responsible for any aspect of the relationship with Eckoh and Siren. She also sent us a copy of the Agreement for Telephony Management Services between ITV Network and Siren World Wide Ltd dated 22 December 2005. She confirmed that she was not aware of any report made by either Eckoh or Siren after the BCA 2005 took place.

Claudia Rosencrantz (Controller of Network Entertainment for ITV & BCA Commissioning Editor) confirmed that she had no specific recollection of BCA 2005 and that discussions for her departure from ITV had begun in October 2005, prior to her leaving in January 2006. We contacted her with some further specific questions in August 2008 to which she gave only limited responses and told us that viewing the show would not assist her memory.

Roger Leatham (Controller of Business Affairs) would not release the statement he provided to Olswang to us unless ITV and Olswang agreed to send it to us.

Jane Marshall (Commercial Development Director, ITV Consumer) dealt with Eckoh and Siren on the revenue side and confirmed Steve Watling was responsible for running operational matters. Channel asked ITV for Steve Watling’s contact details but these were never provided.

Conclusion

Despite the hurdles we experienced set out above, we did receive information from one source who asked not to be identified publicly who stated that senior members of the production team deliberately changed the final result of The People’s Choice Award just before it was announced at the BCA 2005.

We were unable to determine exactly what took place that evening or those directly or indirectly involved. We provided full details of all our investigations to Ofcom which then conducted its own separate enquiries.

In the absence of the co-operation of the various individuals referred to above we have not been able to provide any conclusive information which would assist Channel in responding to Ofcom’s enquiries.

Contacts: +31(0)207-353-6627 Mick Desmond +31(0)7770-680068 Brigitte Trafford +31(0)7736-090266

Source: Channel Television

Contacts: +31(0)207-353-6627; Mick Desmond, +31(0)7770-680068; Brigitte Trafford, +31(0)7736-090266