Select Committee on Culture, Media and Sport Minutes of Evidence

Memorandum submitted by the National Consumer Council


  How the communications sector is regulated and what it delivers are of crucial importance to consumers. The existing regulatory arrangements are confusing and inadequate in dealing with this rapidly converging sector. A more cohesive structure—in the form of an Office of Communications (OFCOM)—is long overdue.

  The delay in publishing draft communications legislation was disappointing. So it is vital that the Government publishes the draft Bill soon and consults widely on its provisions, including pre-legislative scrutiny. It is illogical to exclude the BBC from OFCOM's remit as it should be independently regulated. The paving bill should be amended to require the BBC Board of Governors and OFCOM to prepare for planned transfer of responsibilities to OFCOM. Interim measures should be introduced to make the current system of BBC regulation more transparent and accountable.

  The relationship between OFCOM's objectives should be made clear and we consider that protection of consumers' interests should be the over-arching objective. Regulation needs to be proportionate and appropriate and must be retained where necessary to protect consumers' interests and foster effective competition.

  The proposal to set up a Communications Consumer Panel is strongly welcomed. To do its job properly, the Panel must be independent and adequately resourced, with a remit to cover both economic and content issues where there is a consumer interest. It must cover all key players including the BBC.

  Universal access to public service broadcasting (PSB) was a key plank of the communications white paper. Government needs to set out its vision for the future of PSB in a digital era, and initiate a full public debate about the future delivery and funding of PSB. More clarity is also needed on how analogue switch-off will be achieved. The Government's tests of affordability and availability must not be diluted.

  Given the risks of misleading information for consumers about digital equipment and services, Government should take the lead in ensuring consumers have access to comprehensible and accurate information on these matters. We think that OFCOM should have a general duty to ensure provision of clear information to consumers about the communications sector.

  Greater flexibility in positive content regulation must not lead to consumer detriment or result in a public relations exercise. OFCOM will need to draw up good practice guidelines on issues such as the criteria for assessing performance, and will require a range of powers and sanctions if performance is unsatisfactory. The BBC should be required to adhere to these guidelines as well. All broadcasters should be obliged to take account of OFCOM's observations on key cross-industry PSB issues.

  The Government's strategies and initiatives on digital, internet, broadband and e-government need to be streamlined and clarified. What is meant by the goal of universal internet access should be made clear, together with how this can be achieved through the various technological means. We consider that more emphasis is required on the consumer interest, including the interests of consumers on low incomes and in rural areas.


  The National Consumer Council's purpose is to make all consumers matter by putting forward the consumer interest, particularly that of disadvantaged groups. We research, campaign and work with those who can make a difference to achieve beneficial changes for consumers. One of our key objectives is to ensure that markets and public services work for everyone. We have been lobbying for some years for fundamental changes in the regulatory structure for communications, including the establishment of a single regulatory body—OFCOM.

  We pay particular attention to strengthening consumer representation. To this end we have been campaigning for some time for improvements in consumer representation arrangements in communications. We look forward to the setting up of the proposed Communications Consumer Panel and hope that it will be given the tools to represent consumers' interests effectively in this fast-moving and complex sector.

  The National Consumer Council strongly welcomed the overall themes of the communications white paper (A New Future for Communications), the precursor of forthcoming legislation which is expected to introduce far-reaching changes in regulation and consumer representation. But a number of key issues remain to be resolved which we discuss below.

  The consumer interest in communications is about ensuring universal, affordable access to a wide range of good quality services, choice and diversity in those services, fair treatment of consumers in pricing and service conditions, and ensuring minority interests are met.

  We welcome the opportunity to make a submission to the inquiry, and the Committee's continuing interest in issues relating to the anticipated Communications Bill and related matters. Our submission follows the order of the topics listed in the Committee's call for evidence, and concentrates on those areas where we have carried out work. Our recommendations are listed at the end of the report.


  We believe an Office of Communications (OFCOM) makes sense for consumers and industry alike. We have called for more streamlined and coherent regulation for a converging sector for a number of years. Current arrangements risk duplication, or issues falling through gaps, so we strongly support a single communications regulatory authority.

  Given these potential benefits, the delay in the publication of the draft Communications Bill, and expected legislation during the current parliamentary session, was disappointing. This is particularly acute in the case of telecommunications, given that more consumer-focused regulatory reforms and proposals to improve inadequate consumer representation arrangements were dropped from the Utilities Bill in March 2000. The delay has also affected the setting up of the proposed Communications Consumer Panel, a body which is urgently needed to represent consumers' interests in this fast-changing and complex sector.

  So we are anxious that the Government should publish the draft Communications Bill soon, as an indication of continued commitment to these reforms. This interim period should be used to consult widely before introducing the Bill in the Queen's Speech at the end of the year. The delay notwithstanding, we regard the paving bill, which will establish OFCOM, as a welcome step, facilitating the significant preparatory work that needs to be done.

  To assist in the preparation and passage of the legislation, it would be helpful if it was subject to pre-legislative scrutiny. Legislation establishing other regulatory bodies was scrutinised in this way. The Food Standards Bill establishing the Food Standards Agency, for example, was scrutinised by a committee made up of members of the Health and Agriculture Select Committees.

  While we broadly welcome the paving bill, the BBC's Board of Governors is a notable omission from the list of bodies required to prepare for transfer of their regulatory functions into OFCOM. If it is necessary for other regulators and OFCOM to do so, then logically this should also be the case for the BBC Governors. Even if the transfer of their responsibilities to OFCOM does not actually take place until further down the line because of the timing of the BBC Charter renewal process, the Board of Governors should be included in order to establish a foundation for a more cohesive regulatory structure (we discuss the BBC's regulation in more detail below).


Government objectives

  A critical task for Government is to define OFCOM's objectives to ensure that it delivers on the communications white paper welcome objectives relating to access to high quality and diverse services, and safeguarding the interests of consumers and citizens.

  The Towers Perrin report (OFCOM Scoping Project, October 2001) stated that OFCOM's regulatory objectives are now seen as falling under five headings:

      a.  furthering the interests of consumers;

      b.  encouraging dynamic and competitive markets;

      c.  securing the continuing availability of high quality broadcasting content;

      d.  protecting the interests of citizens; and

      e.  encouraging efficiency and innovation in the management of radio spectrum.

  We recognise that OFCOM will have to balance a number of objectives, and it should have a duty to explain how it has done so when making decisions. However, we consider it would assist in clarifying OFCOM's core mission if there were to be fewer objectives and the relationship between them made clearer. In particular, promotion of competition should be seen as a means to an end, rather than an end in itself. Competition is often beneficial to consumers, delivering new services and additional choice. But other regulatory actions are often necessary to protect consumers' interests. In our view, OFCOM's objectives should be framed within a hierarchy so that the protection of consumers' interests is the over-arching objective.

  Tough regulatory action is often required to ensure that markets become and remain effectively competitive, and to protect consumers' interests where there is market failure. Many consumer benefits have come from regulated competition, rather than unfettered competition, for example, from regulatory controls on energy, and on telecommunications prices. There is a continuing need in the telecommunications market for the regulator to pursue initiatives to foster effective competition, and to ensure universal service. Regulation will need to be retained where necessary to protect consumers' interests, to promote effective competition, and to meet public policy goals, for instance, on public service broadcasting.

  We strongly support the proposal to bring together economic and content regulation. There are overlaps between economic and content issues, and this rightly lies behind the logic of a unified regulatory authority. It is vital however to get the balance right. Neither should be dominated by the other, and this should be reflected in the objectives of OFCOM and the choice of board members. Arrangements to help the OFCOM Board deal with content matters should be located within OFCOM, through its sub-committee structures - that is, under the Board's responsibility rather than alongside it. It will also be vital to ensure that the Board includes members with expertise in looking at issues from a consumer perspective.

  OFCOM's objectives and duties should reflect the welcome emphasis in the white paper upon ensuring universal access for consumers to a good choice of high quality services. But what new services should this involve? And how should they be made available?

  OFCOM should have a particular duty to take account of the interests of disadvantaged groups of consumers, in line with other regulators, such as OFCOM and Postcomm. In this sector, it is important that communications technologies help to combat—rather than exacerbate - social exclusion. This is particularly relevant to those consumers on low incomes and those living in rural areas, and for access to the networks—for example, digital broadcasting and mobile phones.

The Communications Consumer Panel

  Consumers need a stronger voice in the communications sector to ensure their interests are effectively represented to decision-makers and industry. We therefore welcomed the government's white paper commitment to establish a Communications Consumer Panel. We now look forward to further detail to ensure it can effectively and independently represent the consumer interest.

  The key terms of reference of the Panel should be set out in statute in the draft Communications Bill. The Panel will need to be adequately resourced, and capable of engaging with, and influencing, the full range of stakeholders. The Panel's independence from OFCOM should be made clear. The Panel must be a partisan advocate, setting its own agenda and promoting its views on behalf of the consumer interest.

  Access is important, but the question is: access to what? The consumer interest covers the choice and quality of services, as well as how they are delivered. The government should clarify that content issues will come within the Panel's remit where there is a consumer interest. Moreover, if the Panel is to do its job of articulating consumers' concerns effectively across the communications sector, it must cover all the key players—including the BBC as the major public service broadcaster.

  The Communications Bill should specify the role and functions of the Communications Consumer Panel and ensure that it will have the remit, legal standing, duties and resources to represent consumers' interests effectively.

Public service broadcasting

  The expansion of spectrum through digital technologies offers the chance to expand public service broadcasting provision. The consumer need for public service broadcasting remains constant but the market alone cannot be relied on to offer affordable and universal access to diverse and high quality broadcasting. The National Consumer Council commended the communications white paper's emphasis on universal access to public service broadcasting (PSB). So we now have expectations that the forthcoming Communications Bill will deliver on this vision.

  We note the previous recommendations of three general principles by the Culture, Media and Sport Committee (A new Future for Communications, Second Report, Volume 1, Report and proceedings of the Committee, March 2001) to guide the future provision of public service broadcasting that were not fully reflected in the white paper, paraphrased here:

    —  While the BBC, ITV, Channel 4 and Channel 5 will continue to produce considerable public service content for the foreseeable future, it does not follow that their output can be equated with public service broadcasting.

    —  The current position of "privileged broadcasters" (PSB broadcasters) brings with it very considerable costs, and these costs should be transparently identified and continuously assessed.

    —  The focus in future should be on ensuring the provision of public service content from whatever source is most appropriate rather than on protecting the privileges of certain broadcasters for their own sake.

  We welcome the Committee's recognition of the need for fuller exploration of the principles which should underpin the PSB framework, and we agree with the Committee's comment in the same report that "public service broadcasting is a constantly changing phenomenon." However, we consider that more clarity is required about what content (in broad terms) should be universally available in the new context. An overall picture of the evolving PSB sector needs to be developed, setting out what should be universally available to consumers on a free-to-air basis across the different PSB channels.

  We are not recommending a list of detailed types of content to be provided by each PSB broadcaster. What is needed, however, is a clearer vision from which a framework can be developed for PSB in the digital era so that it is possible to see in broad terms where the various broadcasters fit within the jigsaw. This should set out the obligations of the different broadcasters, the funding they are allocated to fulfil them, and ensure they are properly accountable for their performance. The framework should be flexible, leaving room for new entrants in the provision of PSB, in the context of the increased capacity made possible by digital technology.

  The Government should set out a vision for the future of PSB, so leading a debate about how it should be delivered and funded in the digital era, with particular emphasis on the role of the BBC.


  As the key public service broadcaster, it is illogical and runs counter to the consumer interest to exclude positive content regulation of the BBC from the remit of the new communications regulator. The white paper put forward a convincing case for a single regulatory authority for communications. Yet the Government's current proposals retain more than one regulator: OFCOM and the BBC's Board of Governors. Two largely unconnected streams of regulation are not in the consumer interest and against the logic of streamlining the regulatory structure.

  It is generally accepted that independence is a prerequisite for effective regulation. But the BBC is largely self-regulated by a part-time Board of Governors—serviced by BBC-appointed staff—that also sets the BBC's overall strategy and appoints its senior management. According to the Standing Orders of the Board:

    The Governors' role is in certain respects analogous to that of the Board of a public company, since they oversee the discharge of executive functions by the Director General and his staff. In other respects their role is analogous to that of a regulator; ensuring that the BBC acts in accordance with the obligations placed on it by the Charter, by the Agreement and by Statute

  (The Board's Standing Orders, BBC web site, June 2000).

  A public company would be hard pressed to persuade the outside world that it was acceptable for its own board of directors to have the dual functions of regulating the company and setting its strategy. As a publicly funded body, the BBC should be independently accountable for its performance within the wider framework of public service broadcasting.

  External regulation of the BBC should not endanger its independence:

  OFCOM would not interfere in detailed scheduling or editorial decisions. Also, not all broadcasters would need to be regulated identically. OFCOM would regulate the BBC, like all broadcasters, according to their particular role and remit. Its decisions will need to be justifiable in the light of its objectives, centring on the interests of consumers.

  We note the Culture, Media and Sport Committee's previous comment:

    We find it absurd to suggest that Parliament's role in reviewing the BBC's status would somehow be diminished if the BBC were subject to equal treatment with other broadcasters in legislation that will doubtless be subject to extended and detailed consideration by both Houses of Parliament. We recommend that the House of Commons be given a full opportunity early in the next Parliament to consider the future regulation and governance of the BBC as part of the process leading to enactment of the new regulatory regime.

    (A new Future for Communications, para. 129, Second Report, Volume 1, Report and proceedings of the Committee, March 2001)

    We agree. We strongly recommend that the draft Communications Bill incorporates the BBC fully within OFCOM's remit.

  In the regrettable absence of the BBC being brought within OFCOM in the Commmunications Bill, there are other measures which could result in a more coherent framework for PSB than we have at present. We were encouraged by Baroness Blackstone's statement in the House of Lords (Hansard, Column 1271, 29 October 2001,) that:

    The aim is to treat all broadcasters in a similar manner . . . Broadly speaking, the BBC will be subject to the same degree of standard-setting and monitoring as all the other public service broadcasters for each of the three tiers regulated by OFCOM . . . (the BBC's) position will be brought much closer than it has been to that of other broadcasters.

  Interim measures should be introduced to make the current system more transparent and accountable. There needs to be more detailed scrutiny of the way the Governors fulfil their regulatory role but, in order for that to take place, clear information is needed on how they carry out and separate their regulatory and management functions.

  The Governors should be required by the Secretary of State to differentiate clearly between regulatory and non-executive management activities, and report on them. The Department for Culture, Media and Sport should devise a set of criteria and audit procedure for assessing the effectiveness of the Governors' regulatory performance, building on good practice elsewhere and with open consultation. The government should set out ways in which regulation of the BBC can be aligned more closely with that of other broadcasters in the run-up to the Charter Review.

Content regulation

  Commercial public service broadcasters are to be given more freedom to regulate themselves on their qualitative public service remits but it is crucial that the companies' statements of programme policy are meaningful. Without setting down a rigid set of rules, it will be necessary to foster high standards and consistency across PSB broadcasters—including the BBC—in areas such as criteria for assessing performance, and the process for drawing up the statements including consumer consultation. OFCOM should draw up good practice guidelines covering these statements to ensure their overall coherence to help formulate an overall picture of PSB. They should therefore include the timetable for publication and overall presentation.

  The recent move away from "box-ticking" and "clock-watching" regulation of PSB is sensible. However, the proposed three-tier regulatory structure should be based on robust co-regulatory arrangements. Greater regulatory flexibility should not lead to less effective regulation or to consumer detriment. Broadcasters" obligations must be clear, measurable and lend themselves to outside scrutiny, and OFCOM will need a range of powers and sanctions at its disposal.

  It would also be useful for the broadcasters to discuss jointly their approaches to drawing up the programme statements and performance assessments from time to time, and there will need to be room for independent consumer commentary on the adequacy of the processes. They will, of course, be in close and regular touch with OFCOM. But it might also be helpful to require the industry to meet annually to discuss these matters with each other and with OFCOM and consumer representative organisations.

  If performance against obligations is unsatisfactory, OFCOM will need a range of sanctions, beyond the rather extreme option of licence revocation, which should be laid down in statute and available to OFCOM as reserve powers. To ensure transparent and accountable regulation, OFCOM should set out its criteria to determine when its backstop powers might need to be enforced.

  OFCOM will be expected to report periodically on key cross industry PSB issues. All licensed broadcasters—including the BBC—should be formally required to take account of these observations in drawing up their annual statements, and report on how they have done so. OFCOM should also advise the Secretary of State on how the Governors are carrying out their duty to regulate the BBC effectively. The advice should be published.

Analogue TV switch-off

  The Government's recently published Digital TV Action Plan (Department for Culture, Media and Sport and the Department of Trade and Industry, December 2001), while a welcome first step, was a long way short of a coherent and comprehensive strategy for achieving digital switchover. Fundamental questions still need to be addressed about government's public policy goals, universal access, the future of digital terrestrial television (DTT), and fostering effective competition and key consumer protection issues.

  Switching off the analogue TV signal is of huge significance to consumers. New and exciting choices could become available in the digital era. But there is a risk that some consumers could lose out in a complex and evolving marketplace.

  The Government's current strategy relies heavily on a market-led, voluntary conversion to digital. Commercial effort and consumer uptake of digital has been concentrated on pay-TV. Indeed, many consumers possibly equate digital television with pay-TV.

  But pay-TV is unlikely to drive digital switchover in all UK households. Progress has been made, but most consumers who have switched were existing subscribers to satellite or cable analogue services. Many consumers indicate that they are unable to afford, or are disinterested in, opting for digital TV (see, for example, Turn on, tune in, switched off: consumer attitudes to digital TV, Consumers' Association, March 2001, and Digital decisions: viewer choice and digital television, report by the Viewer's Panel, Department for Culture, Media and Sport, December 2001). It seems unlikely that the current digital offering will attract sufficient consumers to allow switchover, so the government needs to clarify how it intends to meet its goal.

  The Prime Minister recently described the projected date of switchover between 2006 and 2010 as "achievable" (speech at the Confederation of British Industry's National Conference, November 2001). We are uncertain how this will be achieved in current circumstances. The Digital Action Plan restated that switchover will take place "when—and only when—the two tests of availability and affordability are met." Although the tests could be more clearly defined, they are nevertheless very welcome. Switchover should be test driven, not date driven. The government should resist any pressure that may build to dilute the tests in order to fulfil the target timetable.

  Cost will be an absolute barrier for some consumers and government may need to offer a range of financial incentives or other mechanisms—such as free set-top boxes to ensure access for all to PSB. Certainly, an affordable and attractive free-to-air, non-subscription based option must be widely available. It is unacceptable to switch-off analogue in the absence of this choice.

  It is argued that DTT adds to consumer choice, is the least disruptive option, and could reach near-universal coverage. The Government may regard the platform as key to developing a compelling offering for the many consumers resisting digital, and vital in ensuring consumers have access to free-to-air public service channels. If so, there are some significant issues to be addressed. The first of these relates to equipment. The integrated digital television set is one means of accessing free-to-air content without subscribing. But massive reductions in the price would be necessary to make this a mass-market proposition. A cheap, stand-alone set-top box, distinct from current commercial offerings, may be a better option.

  Measures to improve the reach and quality of the signal are absolutely necessary. More significant initiatives with public resource implications may be required. But is this is good use of public finance? Alternatively, if DTT is not critical to government strategy, the government will need to outline how other platforms could deliver the public policy goals.

  The majority of viewers continue to rely on analogue services. The introduction of new services should not adversely affect investment or scheduling for analogue services. Nor should broadcasters be pressured to migrate content—particularly PSB—to digital channels leaving only poor quality programming for analogue viewers.

  The pull of new content should encourage consumers to switch to digital, not the push of reductions in the quality of analogue content. Consumers must not feel compelled to switch to digital because it is regarded as a technological advance—they should conclude for themselves whether it is an attractive and affordable proposition. The Digital TV Action Plan emphasises the role of the BBC in promoting digital. We urge caution in altering the BBC's function from one of content provider to promoter of digital. Viewers, especially those who are poorly informed or vulnerable to exploitation, may be rushed into switching if they misunderstand the promotional messages.

  We are disturbed that the government proposes to investigate the transition to exclusive sales of integrated digital TVs. A move to exclusive sales is unnecessary and contrary to consumer interests because of the serious restriction in choice. Consumers should have the option of purchasing an analogue television set, which they may wish to supplement with a set-top box.

  It remains to be seen to what extent the Government's proposed Digital Television Project will ensure that consumers' interests are seen as paramount in the delivery of the Digital Action Plan. The National Consumer Council has been invited to be represented on the Stakeholders' Group and the Market Preparation Group, being set up by government, which we welcome. But we remain concerned about the balance between industry and consumer interests.

Consumer information

  Consumers are confronted by a fast changing market in communications equipment and services. The digital era offers extra choice to consumers, but it also brings added complexity. Government, industry and regulators have roles in ensuring that consumers are confident to make the right decisions: being armed with the right facts, in the right format and from a credible source.

  Until recently there was one means of delivery and a handful of channel choices. Now consumers choosing a new television set, are faced with a multitude of decisions on platforms, providers and programming packages. But there is evidence that the quality of retailer advice is patchy at best. Last year (June 2001) the National Consumer Council commissioned a small mystery shopping exercise to test the quality of information and advice offered when buying digital television services.

  We uncovered vast differences in the quality of information and advice offered on digital television. There were many examples of incomplete, misleading and inaccurate observations made about a number of issues that are important to consumers when making decisions on digital. In particular, shop assistants conveyed inaccurate information about the scheduled date of analogue switch-off. Incomplete and highly partisan advice was offered about the digital platform choices available to consumers. In addition, most assistants gave no indication of the possible need for aerial upgrades or video problems. The research suggests that consumers are having to make choices without the benefit of the full facts. There is a clear risk of consumers being confused, or even potentially misled into making the wrong decisions.

  A long-term, public information strategy is still missing from the Digital TV Action Plan. The Government should take the lead in co-ordinating an information campaign with the support of consumer organisations. But any information campaign must have a clear aim to increase knowledge rather than sales.

  In addition, training for retail staff should be a priority. The proposed review of national training plans (Department for Culture, Media and Sport and the Department of Trade and Industry, Digital TV Action Plan, December 2001) could be helpful, but resources are necessary to make them effective. Unless more is invested in training staff, misleading practices may lead to investigations by trading standards officers or even the Office of Fair Trading (OFT).

  Looking ahead, the new OFCOM should have a role in ensuring consumers are equipped to get the best out of a fast evolving market. The anticipated Communications Bill should include a duty on OFCOM to ensure provision of clear information to consumers. The government should require OFCOM to pursue initiatives that improve the financial and technical skills of consumers, aiding their confidence when negotiating the digital environment. This is similar to the Financial Services Authority's role in providing information and skills for consumers in that complex, evolving sector.

Implications for regulation

  We also need to consider the future of economic regulation in a post-switchover marketplace. Digital cable is likely to continue to be unavailable in many parts of the country. Latest figures (October 2001) show that the number of homes passed by cable companies in the UK totalled just over 12.5 million, only about half of the total number of households (Independent Television Commission, ITC Cable Statistics, December 2001). It is highly unlikely that there will be any further significant roll-out of infrastructure. If there were no viable DTT alternative, digital satellite could be the only option available to many consumers, and therefore has implications for analogue switch-off. Will the Government remain committed to switchover in such circumstances?

  If so, measures to ensure easy and affordable access to PSB on remaining platforms would be critical. But in the absence of a fully competitive pay-TV market, proactive regulation may also become necessary to protect consumers from potential abuse of market power. In this context we await the outcome of the OFT's inquiry into BSkyB with interest. Firm action will be necessary on behalf of millions of consumers if the OFT confirms its provisional decision that BSkyB has behaved anti-competitively.


  To be effective, the Government's overall strategy on electronic communications needs streamlining and clarification. Various initiatives on digital, internet, broadband and e-government do not appear to be clearly connected. For example, there are mixed messages about whether digital television is intended to play a major role in delivering universal internet access. Digital television has a limited capacity to do this and, in any case, it is unclear how many households will be willing or able to pay.

  We also favour greater exploration of issues relating to consumers' needs—such as cost,—and the development of appropriate applications and skills. The Independent Television Commission's Go Digital digital neighbourhood pilot project (announced August 2001) may shed some light on these issues but research into consumer needs and willingness to use and to pay for advanced digital services will need to be ongoing.

  Given the public policy benefits in providing universal internet access, which will be essential to the effectiveness of the e-government strategy, there is an argument for the government to put more resources into developing a more effective infrastructure for delivering reliable internet access. We discuss this below, under broadband.

  We believe universal internet access can provide benefits to consumers. But there are problems relating to, for example, online personal privacy and data protection, identification and security, as well as payment methods. Consumers need to have the means to go online if they wish but also, they need to feel confident of adequate protection and confidentiality too.

  We would urge the Government to clarify what its goal of universal internet access by 2005 means (A new Future for Communications). Is it access in every home or in the local community? Should particular groups be prioritised, such as those with mobility problems or those in rural areas? If so, how should this be achieved?


  The Government needs to be clearer about what it considers to be the role of broadband services in delivering universal internet access and the potential benefits for domestic consumers. The recent report from the Broadband Stakeholder Group (Report and Strategic Recommendations, November 2001) and the Government's subsequent response (Office of the e-envoy, UK online broadband strategy, December 2001) to it contained some helpful initiatives designed to boost public sector demand and content development. But there is vagueness about whether broadband is regarded as a mass consumer proposition and, if so, how this is to be achieved.

  Government decision-making on broadband, for example on any need for fiscal or other incentives, would be aided by more clarity about the overall public policy goals, especially in relation to domestic consumers' interests. Public investment may be justified, particularly to reach consumers on low incomes, or in remote areas, who are otherwise unlikely to have affordable broadband access. On the other hand, this may be unnecessary if public policy objectives relating to internet access could be achieved through targeting resources on narrowband initiatives. A clearer focus is required on the demand side options.

  The Government should make clear its views on the respective roles of broadband and narrowband in achieving its universal internet access target. High prices are an obvious reason for the poor take-up that currently characterises the British broadband market. Measures to spur competition are vital. As local loop unbundling illustrates, this sometimes requires more proactive and targeted regulation. The industry is clearly divided on the history and implications of the local loop unbundling experience. We believe an independent and authoritative investigation is needed—possibly carried out by the National Audit Office—to identify the regulatory lessons to be learned as the market develops further.

  Proper independent evaluation should be carried out and published into the experiences of those UK online centres, and their role in aiding take-up by disadvantaged consumers.


    —  We urge the Government to include the Communications Bill in the Queen's Speech this autumn. The Government should publish a draft Bill this spring to allow time for consultation, as well as pre-legislative scrutiny in Parliament.


    —  OFCOM's objectives should be framed within a hierarchy, with the protection of consumers' interests as the overarching aim. It should have a duty to take account of the interests of disadvantaged consumers. OFCOM's structures—for example, appropriate sub-committees—should enable it to deal effectively with content matters. The Board membership should include individuals with expertise in consumer issues.

    —  To fulfil the objective of more streamlined regulation in communications, OFCOM's remit should encompass the regulation of the BBC. Ideally this should be included in the forthcoming Communications Bill. The current OFCOM Bill should require the BBC Board of Governors and OFCOM, alongside other regulators, to prepare for the transfer of regulatory functions to OFCOM. In the absence of the BBC being regulated by OFCOM, the Government should require the BBC Board of Governors to differentiate clearly between their regulatory and management functions. The government should devise criteria for assessing its effectiveness.

Communications Consumer Panel

    —  The Communications Bill should specify the Communications Consumer Panel's role and functions as an independent advocate of the consumer interest, covering key players in the communications sector, including the BBC.

Public service broadcasting

    —  The Government should lead a debate on the vision for public service broadcasting (PSB) in the digital era to see how different broadcasters fit into the overall picture. A framework can then be established to include the obligations of different broadcasters and their funding.

    —  To ensure overall coherence in PSB, OFCOM should produce good practice guidelines for public service broadcasters—including the BBC—on how to produce their statements of programme policy and performance reports. Broadcasters should discuss their PSB statements with interested parties annually, including consumer organisations. OFCOM should have a range of powers to enable it to act if broadcasters' performance is inadequate.

    —  All licensed broadcasters should be required to take account of OFCOM's observations on key cross-industry PSB issues. OFCOM should advise the Secretary of State on the way the BBC Governors are carrying out their regulatory function.

Digital switchover

    —  We urge the Government to adhere firmly to their current tests for digital switchover. However, the Government should define them more clearly and give more detail about how they should be achieved.

    —  The Government should take the lead in co-ordinating a public information campaign to ensure consumers are confident to make informed decisions about what digital equipment and services they should buy to meet their needs. More could be done to ensure that retail staff are adequately trained so that consumers are provided with accurate information. In addition, OFCOM should have a duty to promote consumer skills and information in this sector.

Universal internet access

    —  The Government should clarify what is meant by its goal of universal internet access by 2005, especially in relation to domestic consumers and disadvantaged consumers. The role of the different technologies should be clarified. Independent evaluation of the experiences of UK online centres, and of related pilot projects, should be carried out and published, including use by disadvantaged consumers.

  Other NCC publications

  Boxed in on digital? The consumer interest in digital switchover (PD92/01)

  Plugging in the panel: representing consumers in communications (policy briefing PD57/01 and policy discussion paper PD59/01)

  A new future for communications (white paper response PD12K01 and summary of our response PD15K01)

  Remotely in control: consumers and the communications revolution (PD56/00)

15 January 2002

previous page contents next page

House of Commons home page Parliament home page House of Lords home page search page enquiries index

© Parliamentary copyright 2002
Prepared 5 April 2002