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Mr. Richard Allan (Sheffield, Hallam): In describing the legislation, my hon. Friend the Member for Twickenham (Dr. Cable) used what I thought was a good analogy, of a harness and a horse. I have picked a different analogy, seeing it as a legislative meal: this Bill is the starter, with the principal Bill coming along later. In common with the approach that many of us who have been here throughout the debate would take to physical food, we have been waiting so long for the legislation that we are tempted to devour the Bill as quickly as possible and get our cutlery poised for the main course.

It is right to be concerned about the gap that will follow, just as too long a gap between courses can spoil a meal. We have been told that something will be introduced in the spring. That sounds rather like a software developer's timetable, with quarter 1 and quarter 2. In 2001, we have been told that the beta version of the legislation will be along in Q1 2002, with the expected product delivery date towards the end of year 3. Those of us who have had experience of dealing with software developers know that Q1, especially when it is described as "the spring", can become Q2 and then Q3.

The Bill may end up being more significant than we think, because the Ofcom that we are setting up may have to make do in its shadow form with the existing powers of the regulators for which it will be acting as an umbrella for far longer than we have anticipated. One of my pleas is that we do not simply say that everything can wait until the main legislation, because even on the most optimistic timetable, we will have missed the boat on many issues if we do not deal with them until we have the new framework at the end of 2003. I remind hon. Members that the existing regulators still have all their statutory powers, and I hope that Ofcom will set a new direction for the use of those powers, rather than being an adjunct waiting for any future powers.

The legislation is complex and it is important to get it right, so I sympathise with the Government to some extent on delay. I have positive experience of pre-legislative scrutiny from the Special Standing Committee on the Asylum and Immigration Bill. Those who considered the legislation in detail had the opportunity to hear expert evidence. That was especially beneficial for Government Back Benchers, because those who hear expert testimony in a Select Committee are often not appointed to the Standing Committee, whereas Opposition Members more often share duties and serve on both the Select and the Standing Committee.

I understand that Parliament will have to decide, but I hope that those who will deal with the legislation in detail will get the expert testimony. That expertise should not be presented to some other group, however beneficial that may be in itself, leaving the Standing Committee members inexperienced in what will be complex technical matters.

The Ofcom framework will be in place as the principal regulatory game in town for some time to come, regardless of whether it has the powers under the new legislation. The coming two or three years will be critical. It is right, as my hon. Friend the Member for Twickenham said, that every time we create a new regulator we should examine the rationale for our regulation. We do not want regulation for its own sake. Liberal Democrats believe that in many aspects of telecoms and entertainment the

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market will provide, but we see a role for a regulator, not to delve into every aspect of how people carry out their business but to act as the consumer's champion and in particular to challenge strongly when there is market failure.

In radio advertising, as I understand it, the authority does not set down a fixed number of adverts per hour, because it feels that the market can decide, as we have a good range of radio stations to choose from in any part of the United Kingdom: if there is too much advertising, people can turn over. The same applies to the internet: if there are too many banners on a website, we can go to one with fewer adverts.

To date, we have not felt confident about doing that for television, and we have spelled out in detail how many adverts there can be per hour at peak and off-peak hours. We may reach the stage at which we do not need to regulate in such minute detail, but until we have a genuine market in which people can choose between attractive options—which is not yet true of television for most people, who do not have the option simply to switch over if a channel has gone over the top with advertising—we will need some sort of consumers' champion.

I hope that one of the briefs that Ofcom will have will be to be as open and accessible to the consumer as possible. Our constituents should not have to come to us to ask about the regulation of those issues, be they connected with radio, television or the internet, that will increasingly impact on their lives. Our constituents should feel confident about approaching the regulator to deal with technical problems, so the regulator should have a public, open and accessible remit.

We should not lose sight of the telecoms issue either. The tendency in the debate today has been to lay into the BBC, which is an emotive issue. However, what happens to the future governance of the BBC pales into insignificance next to the broad-band debate. The BBC recognises that with its offerings, including its digital services and the BBCi offering. That is a positive approach, with a great product, and the BBC knows where the future lies. The legislative process should also reflect that future, which lies with the BBC and outside in broad-band access. Those issues should be prominent in our debate and in Ofcom's approach.

The regulator will face key priorities before the main legislation comes into force. The Minister is well versed on the technical issues, as I know because I heard him speak on them at a dinner. Despite his busy schedule, he came to speak to us and showed that he has a grasp of the issues. The first priority is broad-band roll-out, but the Government should take the leadership role. The role of Oftel, and later Ofcom, will be to respond to the steer that it gets from the Government. Important decisions will need to be made, for example, on the future structure of British Telecom, on new entrants into the market and how to ensure a level playing field. On all those questions, Oftel will need to take a clear steer from the Government, despite being an independent regulator.

The second issue is that of digital television. The Government will not be able to advance their objectives without some form of free-to-air digital service. People need to be able to go into their high street store, buy a box for £99 or less, install it and watch a digital service

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without paying a penny more. Such a service might reinvigorate the BBC licence fee, because people would compare the cost of £99 for the box and £100-odd for their television licence with Sky's offering. Unless and until a free-to-air service is available, the analogue switch-off is not a realistic option. Consumer resistance will be high, and that issue will need to be addressed sooner rather than later.

The third issue is the development of narrowcast television. We have focused on broadcast television in the debate, but much of the future of the new media will be in narrowcast television. People will choose their options and perhaps store them offline to be watched at a later date. That service was originally called video on demand, but it has gone a lot further and has the potential to become hugely important in the evolution of the new media. A similar process has happened in the music industry, which is in some ways ahead of television. The music industry had traditional distribution channels via record shops and CDs, but it was threatened by Napster, which offered a new delivery mechanism. The industry took Napster on and now the big boys such as Sony are developing their own mechanisms for the new media channels. AOL Time Warner is poised to do that and the big UK media channels will also do so, sooner rather than later.

Ofcom will have to deal with two key features of that development. The first is that the content will be unregulated, and, in a way, that is right. If data come over a wire, not the airwaves, they are unregulated. The second feature is that it is global. Even if we seek to regulate it in the United Kingdom, we cannot, because I can go to a provider anywhere and access those services.

I hope that the Government will ensure that there is not too great a gap between the legislative courses and that they will be clear that Ofcom has a big job to do through its constituent regulators. We must all keep our eye on the ball because this matter is very important for the UK; it is not a political football that we can kick around. Opposition Members are acting as the gadfly on the body politic, if I remember my Socrates correctly, pricking the Government into action rather than trying to kick the ball off the pitch.

9 pm

Mrs. Helen Clark (Peterborough): As time is short, I shall make just a few points, having shredded the rest of my speech.

My first point deals with the issue that was the subject of extensive debate in the other place—the omission of the BBC governors' regulatory remit from Ofcom. The BBC has long been a great source of national pride and an example of excellence in broadcasting worldwide. However, it has an enormously privileged position. It receives significant sums annually of what is effectively a regressive tax, without the licence payers having the full redress on taxation that they would expect through Parliament. That fee has been rising for some time in advance of inflation.

The BBC has privileged access to scarce spectrum and to cable and satellite, and it has been able to launch new services even where those have been virtual clones of commercial channels. I am thinking in particular of Network Z, which was set up with an almost identical format to One Word Radio, the future of which is now in

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doubt. I wrote to the BBC to protest at that last summer and found its reply dismissive and rude to the point of arrogance. It is relevant to note the disturbing number of in-house lobbyists that the BBC employs—40, I believe—in addition to a number who work out of house. All are presumably paid out of public money.

I do not understand why the BBC needs or indeed deserves the privileged position of self-regulation outside Ofcom to maintain its deserved reputation and status, particularly as it is publicly funded.

The National Consumer Council has pointed out that excluding the BBC from the full remit of Ofcom limits the potential benefits to consumers of an improved regulatory system. Lord Dubs argued in the other place that inclusion would be in the interests of the BBC, as it would mean that any future dispute over regulation would be between the BBC and Ofcom rather than the Secretary of State.

One does not have to raise the spectre of state-controlled radio, as did Lord Eatwell, to agree that inclusion in Ofcom should lead to greater accountability. I understand that there are examples elsewhere, notably in Canada, of the communications regulator having public service broadcasting as part of its remit. We desperately need a debate on the nature of public broadcasting. In any case, if Parliament decides that the BBC should be brought fully under Ofcom's remit, the Bill will have to recognise that.

My second point is about the protection of diversity and independence in regional broadcasting. The Welsh language channel, S4C, has its own authority. That is generally considered to be better than when Welsh language broadcasting was on a national basis with a remote regulator and a centralised approach. That may seem inconsistent after what I have said about the BBC. However, I understand that S4C has established strong and functional links with the Welsh Assembly, and that could suggest a precedent. I certainly believe that Ofcom must be sensitive and able to respond flexibly to regional needs. It must therefore have direct links to the devolved bodies. It must not be, or appear to be, a centralised body born and bred in London.

If these precautions are not taken, there is a serious risk that good local political coverage will disappear and local debate will therefore be stifled. It would surely be a sad—indeed, a tragic—irony if the main casualty of the ever more diverse and interactive forms of communication was their varied content.

I have no doubt that these matters will be much debated when the proposed communications Bill is introduced. At present, however, we should be sure and certain that the body that we are establishing through this Bill to regulate our communications does so in a way that serves the best interests of our society.

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