Examination of witnesses (Questions 80
THURSDAY 25 JANUARY 2001
CLARK and DR
80. That is slightly narrower.
(Ms Clark) That means we end up with one motoring
web site rather than the 15 or 500 the market might well have
provided. What we are doing is stopping UK society having that
81. I do not think that is the case because
that commercial web site would not actually be selling cars, would
(Ms Clark) It might be.
82. Do you think the BBC would be selling cars?
(Ms Clark) You know the BBC probably better than we
83. It is an unlikely concept I have to tell
(Ms Clark) They sell toys, why not cars?
(Ms Clark) They sell toys, why not cars?
Mr Maxton: They sell toys relating to
their particular programmes, they do not sell toys generally.
Chairman: If they did what we recommended
last time, although you dissented from some of our conclusions
I do not think you dissented from this, namely if BBC Online were
transferred to BBC Worldwide, I do not see how organisations like
News International could complain then. On the other hand, it
would still carry Radio 1 because, after all, one way I can listen
to Radio One, if I do so, is through Sky Digital for which I pay.
How about that?
85. That is right. What I am trying to suggest
is you really cannot regulate in this area. I think it would be
wrong to limit the BBC simply because it happens to be funded
out of public money. I do not see what the problem is. At the
end of the day you are funded out of public money in the sense
that your shareholders put money into it by buying your shares.
(Ms Clark) There is a slight difference.
(Dr Stelzer) There is a slight difference.
(Ms Clark) Our shareholders choose to put money in.
86. The Business 2.0 Magazine and Industry
Standard this week have written vitriolic pieces about BBC
Online claiming that possibly through the American BBC Online
site they could, on the American site, carry advertising which
would not contravene the rules for the British/UK part of their
operation. They have been very vitriolic in those pieces. I just
wonder whether you think that is a way out of their dilemma?
(Dr Stelzer) I have not thought about that issue but
vitriol is rarely the way out of any dilemma. In tone I would
be against it but I have not really thought that issue through.
87. It seems to be in complete conflict with
what BBC Online is supposed to do.
(Dr Stelzer) I am really not in a position to comment
88. You heard me ask questions previously and
I repeat what I said to Sky before. I am a fan of Sky and I am
a fan of the BBC. I subscribe to Sky indirectly through cable.
You represent a commercial company so you have got a duty to the
shareholders to make as much profit as you can, you have no alternative,
so I understand why you come and say "it would be great if
you could shut the BBC down and stop it competing". As I
said to the previous witnesses, do you not agree that we are very
fortunate in this country that we did start the BBC and start
a universal subscription service? When you, for instance, came
into the market that was already there, and presumably you thought
you could compete with it anyway, so you cannot really come along,
despite your duty to defend your shareholders, and say it is unfair
that it is there, it has been there for an awful long time.
(Dr Stelzer) I think the BBC was a marvellous achievement
which was admired all over the world. There is no question that
when Sky Television started it knew that sitting out there was
the BBC with whom it would have to compete. It cannot have any
complaints about that. What it might have complaints about, and
please understand my role, I am a consultant,I do not make
policy at Sky Television and I do not make policy for Mr Murdochis
what Sky Television or any commercial provider has to look at
is the expanded role of the BBC since Sky Television was started.
A good example is 24 hour news. There are several commercial providers
of 24 hour news, some from America, and Sky News is one. There
was no contemplation when Sky did a 24 news service, and it had
huge losses for years and years building up this concept that
there could be 24 hour news, that somebody would come along and
offer free what it necessarily had to charge for because there
was no market failure and there were five or six of those services
sitting out there. If we went back now, and I was there at the
time, and said "if we get this going someone is going to
come and offer free competition" we would have to think pretty
hard, harder than we did, about starting Sky News. That is the
worrisome part. The worrisome part is not that the BBC is there,
we knew that, the question is where is the line going to be drawn
now? I think that is a very difficult issue, you cannot just say
nowhere and yet you cannot draw a hard and fast line, this is
why we are groping for a policy answer.
Mr Keen: When the Committee went to Brussels
a couple of years ago one of the things that the Commissioner
responsible for the media said was "you are so lucky in the
United Kingdom because you have got the BBC on a universal subscription
basis, compulsory, and no government could now introduce that
that has not already introduced it because the public would say
`we are not voting for you if you make us pay £100 a year
for a service'." The fact is we are lucky. One of the questions
I put to the previous witnesses was why do we have to look upon
the BBC as being a public broadcaster? It is not necessarily public
broadcasting, despite the fact that your colleagues before said
their definition was that public broadcasting was a wide provision
of all sorts of programmes. It is not really public service programming.
I asked the question of Sky before, and did it with a lot of humour,
was Sky News public service broadcasting? I asked that to get
the witnesses to understand if somebody said to me "define
public service broadcasting" I would say it is the news,
it is issuing details of Social Security payments at certain levels
of income and that sort of thing, and that is it, full stop, nothing
else. Like in the last waryou are too young to rememberthe
news dominated everything and that was public service broadcasting.
Most of the other stuff is entertainment, why can we not just
forget about the difference between BBC public and the rest not
public and just say that the BBC has a different way of funding
it and it is not free? I pay for 24 hour news and I am delighted
to pay for it, I tend to switch it on and watch it, sometimes
Sky and sometimes I switch it over between Sky and the BBC, particularly
on a day like yesterday. It is not free, it is just provided in
a different way. When the commercial people came into the market
they knew that the BBC was there. You did not know that the Internet
was going to develop as it has done, so you could not really say
that you did not expect the BBC to do it. You did not know that
the Internet was there when you came in with the broad development
of programmes. It is a long question, is it not?
Mrs Golding: Yes.
Derek Wyatt: It is a speech.
Mrs Golding: We are dropping off.
89. The question is this in a nutshell: why
can we not forget about calling the BBC a public service broadcaster,
why can we not just say that is our unique way in this country
of financing a broadcaster and yours is another way of doing it?
(Dr Stelzer) Because the key word in the question
was "compulsory". It is very difficult for any private
organisation to compete with someone who has compulsory access
to the money of people it is trying to woo. There is no compulsion
to watch Sky or to take the Sky service, there is no compulsion
to buy The Sun, there is no compulsion there. The licence
fee is compulsory and you have trucks going around doing bad things
to people who do not pay whether they watch the service or not.
You have an elaborate subsidisation system which is a regressive
way of financing which I find troublesome, but maybe you do not.
The problem I have, and I know what you are groping for, is what
is the limit of that? If an organisation makes a financial deal
with you and then two or three years later decided "we really
do not want to do that, we want some more money", so they
come back for more money, what is the limit? When do you say no?
I agree that if you define public service broadcasting as essentially
putting bulletins on as to when you can collect your pension cheque
then there is not much of a role for public service broadcasting.
On the other hand, in the way that you define it there is no room
for anybody else because you cannot compete with something where
you have to ask people to pay you when the other guy is getting
money under compulsion. The trouble I have with your definition
is there is no outer limit. If you say to me you are going to
have two channels or six channels, fine, but, as we see here,
we have a creeping movement into other areas and that is a little
90. This Committee is part of the regulation
of the BBC and we are all politicians. The limit is the fact that
it is very difficult to put the licence fee up. The licence fee
is not a punishment, is it? You talk as if it is a punishment
but all it is is a way of giving people amazing value for money.
(Dr Stelzer) Are you suggesting that if everybody
had the option of mailing a cheque for £100 to get BBC that
everybody would do it?
91. No, it is just the opposite. I am saying
that we have got a system, and we are very lucky to have got it,
as the European Commissioner said, and that is how it is. Other
nations wish they could have it but you obviously do not. I am
not being antagonistic to Sky, I am just saying why do we not
accept that this is a wonderful way of financing it? If the roads
had to be built privately we would not have a very good system.
(Dr Stelzer) If a democratic society decides it wants
to fund broadcasting in this manner, no-one has any objection
to that. I think what the politicians who speak for the people
through the democratic process have to recognise is there are
costs to that and one of the costs to that is a disincentive to
private sector people to come into the business. You may say "I
am perfectly happy to live with that cost", and you are nodding
yes, you would prefer if none of them ever came in.
(Dr Stelzer) A couple who you approve of. The fact
of the matter is that this policy has costs. As long as you recognise
those costs, if a democratic society wants to do it it should
do it. The costs are not trivial. Nobody will do another Sky News
for a very long time, I can assure you. The costs are diversity,
you will lose diversity from this policy. If you have free children's
programming there are a lot of people who might have provided
more programming for children who will not because they do not
want to compete with free, so one cost is diversity. That is a
democratic value too. You are here balancing democratic values,
these are not absolutes. Another cost is investment in world leadership
in this industry. Because of Sky, amongst other things, you are
world leaders in satellite broadcasting. You already see in the
print industry and in magazines people walking away from investments
because they are not going to compete with something that can
be promoted on BBC. All I am saying is a democratic society makes
these choices, the choices you suggest, just recognise the costs.
93. John Maxton whispered that ITN have gone
to 24 hour news long after the BBC.
(Dr Stelzer) And let us see what happens.
94. I am not antagonistic to Sky, I think Sky
have done a brilliant job for football. There was a niche which
commercial broadcasters could do, and the same for boxing. I never
pay £12 to watch two minutes of a heavyweight fight, which
I loathe to my shame, but I do spend money on watching football.
I am not asking any of these questions in an antagonistic way,
it is just that we have a certain system in this country which
the States and other countries have not, and I think we are very
(Dr Stelzer) Nobody is arguing that at all. I would
like you to think a little bit about football.
95. He thinks about it all the time.
(Dr Stelzer) Join the club, although a different kind
of football. Think about the huge expansion and the supply of
sport that is available on television and consider this: suppose
that the BBC were to launch a free sports channel, do you think
that there would have been the expansion of sports broadcasting
and programming that you like so much, and I like so much, if
someone said "go out and bid for this but, by the way, you
will have to charge for it and someone else is going to give it
away"? I do not think you would have seen that huge expansion
in the supply of sports broadcasting. Again, you may say you are
willing to live with that, but that is a cost. I am not willing
to live with it.
Mr Keen: I will not ask any more questions.
I think Sky Sports is filling the gaps between the football and
that is where it all came from.
Mr Maxton: You have done damage to some
Chairman: You can see, Ms Clark and Dr
Stelzer, that this Committee offers a broadband approach. Thank
you very much indeed for rounding off a very interesting morning.