Memorandum submitted by Scottish Media
We would urge that the timetable for the forthcoming
Communications legislation does not slip further into 2002. We
are concerned that key areas of broadcasting, in urgent need of
reform, are not being addressed and that neither are other crucial
policy areas that fall outside the scope of the legislation, such
as digital switchover. The Government must ensure that sufficient
resources are deployed to deal with these important issues.
It is imperative that a level regulatory playing
field is created for Public Service Broadcasters (PSBs). This
should include the BBC as the leading PSB. Therefore responsibility
for the BBC within Tier 3 should be extended to OFCOM.
The introduction of self-regulation in relation
to Public Service Broadcasting is welcomed, as is the aim to develop
a common framework for all PSBs. However, the definition of PSB
requirements should vary according to the broadcaster. In this
matter, one size does not fit all and the commercial PSBs should
not be subject to the same requirements as the BBC who should
continue to provide the benchmark within the UK.
With reference to media ownership regulation,
SMG will shortly submit a response to the Government's most recent
consultation paper. A cross-media strategy can produce significant
creative and commercial synergies for media owners and allow the
achievement of scale whilst protecting plurality of voice for
consumers. We remain convinced that, in order to achieve the Government's
aim of creating the most dynamic and creative media market in
the world, UK media companies must be allowed to achieve sufficient
scale to compete not only with each other, but also with their
European and global counterparts. This will enable media owners
to invest sufficiently in new content and infrastructure, ensuring
that the UK media market retains its reputation for high quality
and independent content backed by extensive and appropriate consumer
We welcome the Government's Digital Action Plan
but would urge that it be progressed rapidly. We would advocate
the publication of a timetable and a plan detailing how switchover
is to be achieved. This is of particular relevance to Scotland
given its topography and number of remote communities.
1.0 DRAFT COMMUNICATIONS
THE OFCOM PAVING
1.0.1 We welcome the Culture, Media and
Sport Committee's inquiry into the prospects for a draft Bill
on Communications and a range of related issues.
1.0.2 Whilst understanding the need to delay
the timetable of the Bill due to other demands on Parliamentary
time, we would hope that there is no further delay to the timetable
outlined by the Secretary of State in the Government's Response
to the second report from the Culture, Media and Sport Committee
Session 2000-01, i.e. the publication of a draft Communications
Bill in the Spring of 2002.
1.0.3 Having embarked on a process of major
reform, which has sparked both expectation and uncertainty, Government
must carry it through and deliver an effective and reformed regulatory
regime as quickly as possible.
1.0.4 We are concerned that decisions on
key broadcasting-specific areas in need of urgent reform are being
delayed by the complexity of the "OFCOM project" and
that limited resources are available to focus on key policy areas
that lie outside the scope of the legislation. An example of the
former is that of ITV licence payments, the re-opening of negotiations
for which is prevented under the current legislation. The current
payments are based on the assumption of three per cent constant
growth in revenue throughout the 10 years of the licence whereas,
in fact, revenue is significantly lower than the base year on
which the value of the licence was set and is unlikely to achieve
2000 levels for some years to come. Other key areas of policy
affected include digital switchover, the timetable for which is
not expected to be included in the draft Communications Bill.
The general view is that the scale and complexity of the Communications
Bill process has consumed a disproportionate amount of the relatively
limited resources available within the DCMS and DTI.
1.0.5 With regard to significant issues
raised by the Paving Bill, the most significant, in our view,
is that OFCOM should have greater regulatory responsibility for
the BBC. It does not make sense to create a single regulator without
giving that regulator comprehensive regulatory oversight of the
entire broadcasting industry. The BBC's recent overt commercialism
is having a profound effect on the broadcasting ecology in the
UK and it is invidious that the same degree of freedom accorded
to the BBC is not extended to the other Public Service Broadcasters
(PSBs). The Government should ensure that a level regulatory playing
field is created for all UK PSBs.
1.0.6 We welcome the Government's intention
to introduce self- regulation of broadcasters. ITV companies will
have the responsibility of issuing statements of programme policy
that will become the benchmark against which self-regulation would
be measured. Backstop powers to ensure that these responsibilities
are met would rest with OFCOM. However, Public Service requirements
will differ between broadcasters, with those of the BBC ranking
highest. Those of other broadcasters should be governed by a general
Public Service description within which broadcasters would define
their requirements in accordance with the framework outlined above.
ITV's requirements will mainly be news and current affairs, regionality
and original production, a significant proportion of which will
come from outside London. However, OFCOM must have sufficient
power to ensure that broadcasters who fall short on promises or
remit are held to account. This should apply equally to the BBC.
2.0 CROSS MEDIA
2.0.1 We concur with the Government's view
that the question of who owns our newspapers, television and radio
is vital to democracy and that a framework for media ownership
which protects plurality and diversity needs to be structured
in a way conducive to creating the most competitive market for
UK media businesses, while allowing companies to grow and to benefit
from the creative and commercial dividends that can flow from
2.0.2 We therefore welcome the extensive
consultation on cross-media ownership and SMG will shortly be
submitting a response to Government detailing the company's proposals.
2.0.3 UK media are the envy of the world.
The quality and diversity of content presents the highest standards
of information, entertainment and debate to UK viewers, listeners
and readers. Meanwhile, the range of media owners and plurality
of voice reflected in that content helps to ensure that democracy
is protected and freedom of speech maintained.
2.0.4 However, this is achieved against
a background of one of the most regulated media environments in
the world: an environment in which regulations are inconsistent
across different media, are based on outdated views of the media
world and which actively constrain the development of UK media
2.0.5 SMG, is a successful and ambitious
UK media company, has a unique cross media profile in terrestrial
television, radio, newspapers, magazines, outdoor and cinema advertising
(see Annex). We recognise the value of our media's independent
voice and are committed to editorial independence. We further
understand the need to invest in high quality infrastructure and
content in order to compete for the attention of our viewers,
listeners and readers.
2.0.6 We believe that for the Government
to achieve its aim of creating the most dynamic and creative media
market in the world, that UK media companies must be allowed to
achieve sufficient scale to compete not only with each other,
but also with their European and global counterparts. Only with
scale can media owners invest sufficiently in new content and
infrastructure, thereby ensuring that the UK media market retains
its reputation for high quality and independent content backed
by extensive and appropriate consumer choice.
2.0.7 It is our fundamental view that UK
competition law is sufficient to protect the interests of consumers
in an environment in which technological advances are providing
an increasing range of consumer choice and lowering barriers to
2.0.8 However, we note the objections expressed
in the Government's consultation paper, specifically that using
revenue measurement alone was a rather blunt instrument. In the
interim period, we have carried out a significant amount of analysis
and desk research and developed our proposal further. Our alternative
cross media ownership regulatory proposal, which will be submitted
in response to the most recent consultation document, takes into
account Government's wish to retain some level of control over
plurality of ownership whilst allowing UK companies to grow in
scale and to benefit from cross-media synergies.
2.0.9 SMG undertakes to supply a copy of
our proposal on cross-media ownership regulation to the Committee
upon its publication.
3.0 DIGITAL POLICY
3.0.1 We welcome the Government's recently
circulated Digital Action Plan and would hope for rapid implementation.
In particular, we believe that the Government needs to set a clear
target date for switchover that will give certainty to both industry
and consumers. The Government has now said that switchover by
2006 is unlikely and expectations are now being set at 2010. This
is disappointing and should be reviewed. The investment in digital
is significant and this decision will result in broadcasters carrying
the costs of two transmission systems for longer.
3.0.2 Government also needs to produce a
detailed plan setting out how switchover will be achieved. This
should include working with the Digital Broadcasting Group on
Spectrum Planning, with the RCA and on planning the conversion
of the transmitter network from analogue to digital, in particular
in rural areas. It should also include working with equipment
manufacturers for the early introduction of affordable IDTVs.
This is of paramount importance for consumers and the industry
in Scotland where the topography makes universality of access
expensive and difficult to achieve.