Select Committee on Culture, Media and Sport Minutes of Evidence


Memorandum submitted by the British Broadcasting Corporation

INTRODUCTION

  The BBC welcomes the opportunity to contribute to the Select Committee's inquiry into the Government's proposals for the regulation of the converging communications industries. This brief memorandum draws on the BBC's response to the White Paper, while focusing on those areas which the Select Committee have identified as being of special interest to them in the inquiry.

GENERAL OVERVIEW

  The BBC welcomes the broad range of proposals in the Government's White Paper, which manages the difficult task of steering a course between the interests of audiences and the commercial needs of a modern and expanding industry.

  In its initial submission to the Government's Review of 4 July 2000, the BBC noted that the convergence of communications and media technologies and markets is creating huge opportunities for UK businesses, consumers and citizens, of which the UK is well-placed to take advantage, but that there are also potential barriers to success. The purpose of any future regulatory framework should be to open up the sector to competition, guarantee access for all consumers to the widest range and highest quality of service, and maximise the economic potential for the UK.

  Within this framework, the BBC identified in its submission a clear and wide-ranging role for the Corporation in the digital age, flowing from its broadly based remit and its continuing key values, and underpinned by its independence from Government and commercial interests, guaranteed by the Board of Governors. The BBC welcomes the White Paper's strong endorsement of the BBC's role, remit and independence. The BBC will take up the challenge of convergence and will seek energetically to play its full role in delivering its benefits to the UK, as envisaged by the White Paper.

REGULATION OF PUBLIC SERVICE BROADCASTING BY OFCOM

  The Committee has asked for views on OFCOM's role in regulating public service broadcasting across the industry.

  The BBC supports the concept that certain basic content standards should apply across the industry, and that these should be consistently regulated—just as the BBC currently establishes common benchmarks in certain areas, and just as competition issues are consistently regulated by the OFT and the Competition Commission. The BBC therefore accepts that in most of the areas identified by the White Paper as falling within "Tier 1", the BBC should be subject to industry-wide benchmarks and codes.

  The BBC considers that the relationship between OFCOM and broadcasters concerning the establishment and monitoring of Tier 1 standards should be designed to support and encourage co-regulation, rather than to invite conflict. The Board of Governors will seek to work closely with OFCOM to ensure the productive and effective establishment of common benchmarks and to reflect both the duties of OFCOM and the continuing responsibilities of the Board for the editorial content of BBC programmes.

  The BBC welcomes the Government's acknowledgement that the issue of "the provision of fair, impartial and accurate news" is so closely bound up with the Board of Governors' responsibilities for ensuring the editorial independence of the BBC, that responsibility for ensuring compliance within the BBC should therefore remain with the Board.

  In "Tier 2" of the regulatory framework, the BBC acknowledges, as it always has done, that there are certain public service obligations which are quantifiable and which apply across all public service broadcasters, such as the quota on independent productions. In some cases the obligations are contained in legislation. In others, they are replicated in the BBC's Agreement with the Secretary of State. In some cases, obligations have no direct legal force in the case of the BBC, but the BBC has undertaken to at least match the targets set for others—for example, in the case of the provision of subtitling, signing and audio-description. The BBC would wish to discuss with the Government the most appropriate mechanism for ensuring the delivery of the Tier 2 obligations outside the requirement to carry news and current affairs programming in peak time, and—as with news—would in particular be willing to contemplate amendments to its Agreement with the Secretary of State to enshrine the obligations in its own legal framework and therefore best ensure their implementation. The BBC would also wish to explore further the interface between the responsibilities of OFCOM and those of the Board of Governors for ensuring the delivery of obligations within the Agreement.

THE DEVELOPMENT AND REGULATION OF RADIO

  The Committee asked for comments on the White Paper's proposals for the future regulation of the radio marketplace.

  The White Paper made three broad proposals—that there might be greater consolidation of ownership of radio licences, that the broad requirement that one national commercial licence should be a speech-based service and another for a non-pop music station should be retained, and that remaining format restrictions on local commercial radio stations should be lifted, to enable them to evolve in response to market conditions.

  The BBC agrees that current media ownership rules may fragment the radio industry to a greater degree than may be economically desirable. Requirements for "pluralism" and competition in the radio sector can run counter to those of diversity. Because each operator is so small, their revenue stream compels them towards a common "middle ground", of playlist music. Allowing more consolidation in that particular market would allow companies to spread their investment across a wider range of programming, and could therefore deliver the desirable outcome of greater diversity in the local marketplace.

  Against the background of the proposed relaxation of ownership rules, the rapid growth of commercial stations in recent years, and the further expansion which digital radio will provide, it would seem logical to allow more flexibility in the format of individual stations. It is essential, however, that any such additional flexibility is not seen as downgrading the importance of radio in the media marketplace. OFCOM will need to maintain a sharp and dedicated focus on the commercial radio market to ensure that it continues to deliver public benefits, particularly during the roll-out of digital radio.

  Any reduction in obligations on commercial radio will place even greater emphasis than hitherto on the role of the BBC in providing the guarantee of diversity in the radio marketplace, high investment in a wide range of quality output, and the nurturing of new talent. Already, the BBC, through its five complementary national networks and its distinctive local radio stations, is responsible for providing the bulk of diversity in a marketplace otherwise dominated by commercial playlist pop music. That this diversity is valued is demonstrated by the fact that the BBC has maintained a share of over 50 per cent of all radio listening despite the huge expansion of the commercial radio market. In its proposals for new digital radio services, which have been submitted to the Secretary of State for approval, the BBC would further increase the diversity of its public service offering and thus ensure that the radio marketplace served the widest possible range of listener interests.

THE FUTURE REGULATION OF AUDIO-VISUAL CONTENT ON THE INTERNET

  The BBC supports the general objectives and principles which the White Paper sets out for content regulation, as well as the broad tiered structure for delivering content obligations, which follows the outline suggested in the BBC's own initial submission to the review.

  The Committee asked in particular for views on the regulation of new media outlets. The BBC accepts that users of new media services expect and deserve protection from inappropriate content or from exploitation. However, it is recognised that it is inappropriate—and ultimately fruitless—to attempt to apply the same regulatory measures which have delivered basic content standards across nationally-licensed broadcasting services on new online media the content of which is international and unlicensed.

  However, the White Paper identifies a number of elements which could have a role to play in ensuring that consumers continue to enjoy appropriate protection, including:

    —  reliance on basic laws (eg obscenity legislation);

    —  a role for OFCOM inactively tackling illegal material;

    —  the promotion by OFCOM of rating and filtering systems; and

    —  the education of consumers in the use of new media and associated protection devices.

  The BBC will seek to play a leading role in empowering consumers, including in ways such as these, to exercise with confidence the choices which the new media will provide.

  As far as rating and filtering systems in particular are concerned, the BBC is not yet satisfied that the systems which are available are sufficiently sophisticated to be effective, and we are therefore still considering whether to rate BBC sites.

  The White Paper also identifies a role for established broadcasters, operating under obligations of accuracy and due impartiality, to bring the same qualities to bear in the online news offerings. The BBC's own highly successful Online News site embodies the same high editorial standards as the rest of the BBC's output. The BBC accepts that it has an obligation in the new media world, with its broader range of materials, to be the guarantor not only of universal access to a wide range of material of the highest quality, but also of impartial news and information, acting as a "trusted guide" to new media users and increasing consumer confidence.

MEDIA OWNERSHIP

  The Committee also asked for views on the Government's proposals on media ownership.

  As stated in its initial submission, the BBC believes in general that the UK's interests are best served by a regime which encourages the development of commercial British media players able to operate globally, boost exports and support strong growth in the creative economy at home. The BBC therefore welcomes the Government's conclusion that further consolidation might be allowed within the broadcast marketplace—including ownership of ITV and of local radio stations.

  However, safeguards are still appropriate to ensure that there is plurality of voice in the British media. As media outlets and platforms multiply, the public interest is in seeing a multiplication of voice and opinion, rather than the dominance of any particular viewpoint. The potential of the converging digital media marketplace to underpin public debate and improve access to information is one of the key public benefits which the Government has set, and it should inform the Government's approach to continuing media ownership rules. Competition Act powers, focusing on dominance in marketplaces rather than on plurality of voice, will not alone be sufficient safeguard.

  As competition within different strands of the media increases with the expansion made possible by digital technology, the main threat to plurality comes from cross-media and vertically-integrated companies. In particular, the newspaper market, both nationally and locally, will continue to accommodate a relatively small number of players compared to other media. Coupled with a powerful position in other pervasive media—such as television and radio services with wide reach, and particularly those broadcast services which benefit from regulatory privileges to ensure they reach a universal audience—this could act against the public interest in pluralism. The danger is of course increased as further consolidation is envisaged within television and radio markets.

  The BBC therefore considers that specific cross-media ownership rules will continue to be appropriate in the future. In particular, the BBC considers that the current rules restricting ownership of broadcast outlets by newspaper interests with 20 per cent or greater of the national newspaper marketplace, and similar specific restrictions on cross-ownerships in local marketplaces, are appropriate and proportionate, have worked well in the public interest, and should be maintained.

February 2001


 
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Prepared 23 February 2001