Arousing fear that it would outlaw all mobile content – from ring tones to games – unless operators invest in banking licenses, the European Commission is said to be ready to classify all forms of premium SMS as e-money, according to New Media Age.
For now, the Financial Services Authority interprets e-money legislation to mean prepaid air time for anything not sent and used on a phone as e-money, NMA said Dec. 10. That content would require licensing, and operators have required content providers to stop taking online content payments by reverse-billed SMS, "which has delayed several big media owners from offering services," NMA added.
Adult industry veteran Cynthia (Cyndalie) Fanshaw said classifying premium SMS as e-money could, in the long term, mean something like an Internet business license next, "or something like it in the U.S., just as you would need one in your office or establishment.
"A license is most likely an excuse to require registration so the EC can apply some kind of tax or fee," she continued. "They probably don't want anyone to make money in a way they haven't yet found a solid way to tax or make money on first. It would probably only mean that any billing company that facilitates SMS payments would have to require that its clients are licensed under law, and that they themselves are as well."
At this writing, the EC has wanted only to extend the licensing requirement to all prepaid such content, just weeks after the FSA promised to assure operators before Christmas that they would not enforce the application to mobile business. This came, NMA said, after a Brussels meeting where EC members were said to be giving a heavy push to the toughest reading of the SMS directive.
"This will lead to operators having to make an investment to keep the premium SMS market alive," said Mobile Entertainment Association regulatory committee chairman Andrew Bud to NMA.
