Select Committee on Culture, Media and Sport Fourth Report


The Culture, Media and Sport Committee has agreed to the following Report:



1. The electronic communications sector is always described as "fast-moving". Technological innovation, relative market strength and consumer take up of new products can transform the sector radically in a mater of months. Perhaps the only certainty is uncertainty. The pace of development is swift but shifts in direction seem even quicker: for example the sudden explosion in text-messaging in the UK and the disappearance of WAP[1] into a technological cul-de-sac. Today's confidently predicted next stage is tomorrow's forgotten catch-phrase.

2. Against this background our Report looks at the progress of the Government's key plans for the communications sector: most especially its plans for a new regulator, the Office of Communications; the promotion of digital broadcasting (with switch-off of the analogue signal as the ultimate goal); and support for the roll-out of broadband—higher speed Internet services. Regulatory reform, in the full establishment of the Office of Communications (OFCOM) is intended to play a pivotal role in achieving further progress with the switch-over to digital TV and the roll-out of broadband. A draft Bill defining the duties and powers of OFCOM[2] is expected shortly, early May 2002, and more consultation and scrutiny will be then be undertaken. Unless the legislation setting out the duties and powers of OFCOM is to be out-of-date before Royal Assent, it must not seek to codify rigidly the sector, but must concentrate on identifying firm principles and objectives and offering a pragmatic and flexible approach to implementing them.

3. We set out below a list of the other key conclusions and recommendations appearing in the main body of this Report.


  • Unless the legislation setting out the duties and powers of OFCOM is to be out-of-date before Royal Assent, it must not seek to codify rigidly the sector, but must concentrate on identifying firm principles and objectives and offering a pragmatic and flexible approach to implementing them. (Paragraph 2).

  • We look forward to the publication of the draft of the substantive Communications Bill in line with the Government's revised timetable. It would be extremely damaging to the sector's interests for this timetable to slip any further. In similar vein, we look forward to the early publication of the promised draft clauses on media ownership so that thorough pre-legislative scrutiny can take place of the Government's decisions on these important issues. (Paragraph 18)


  • We note that, under the provisions of the Office of Telecommunications Act 2002, the Secretary of State has the freedom to increase the size of the OFCOM board to allow regional, national and sectoral representation. We believe it could be a mistake to do this. The experience of the US Federal Communications Commission, whose senior staff we met in Washington during the course of this inquiry, suggests that a small executive body functions most effectively. (Paragraph 24)

  • We agree that OFCOM, as a matter of course, must be able to call upon appropriate expertise; but we believe that a convergent sector needs a regulator with a genuinely integrated decision­making body at its head. (Paragraph 25)

  • We regard the proposed Communications Consumer Panel as an important "plug" which may need a designated "socket" on the OFCOM board in the form of one or more members with special responsibility to represent the interests of all consumers (including those with disabilities). In addition to particular representation on the OFCOM Board we agree with the National Consumer Council that the Office should have a dedicated consumer affairs unit to pursue the consumer agenda within the organisation. (Paragraph 27)

  • We recommend that the final Communications Bill sets out specific requirements with regard to the openness and transparency of the conduct of OFCOM, including that its board should meet in public unless issues of commercial confidentiality make this inappropriate. (Paragraph 28)

  • We recommend that OFCOM be under a statutory duty regularly to review its rules, regulations and its requirements for statistical returns from businesses, with a view to deregulation where possible. (Paragraph 29)

  • We recommend that the final Communications Bill contains a duty on the Chairman of the OFCOM Board to submit an annual report on OFCOM's activities, expenditure and achievements to Parliament. The Chairman and Chief Executive of OFCOM would then be subject to the same examination by this Committee, on the basis of that report, as has become the practice with the Chairman and Director-General of the BBC and that Corporation's report and accounts. (Paragraph 31)


  • We recommend that, in addition to the other reforms in train, the BBC Governors hold their meetings in public and that their openness and transparency be equivalent to the approach we have suggested for OFCOM. (Paragraph 38)

  • We are seriously dissatisfied with the present procedures for approving new BBC services. We therefore recommend that the approval of such services should be the subject of published statutory advice from OFCOM to Ministers. (Paragraph 42)

  • We believe that the final Communications Bill will need to make provision for clear ex ante rules ensuring genuinely open access to ensure genuinely open competition in the sector. In particular we believe that rules establishing must-carry status for the free-to-air public service broadcasters on satellite, as well as full, timely and open disclosure of the technical standards in all set-top boxes, will be important. (Paragraph 50)

  • We believe that consideration should now be given to the Government conducting analyses of the costs and benefits, and market impact, of providing free digital set-top boxes to enable analogue switch-off to be achieved. (Paragraph 56)

  • While we would welcome the wide availability of such boxes—as it would mean that television viewers can view free-to-air digital channels without having to pay subscription fees for other services that they do not wish to take up—we are concerned, as we set out below, that the potential for the provision of digital television and Internet access to converge is not lost. (Paragraph 57)

  • In the light of the recent offer for sale of ITV Digital by its administrators it is the responsibility of Government to act to ensure that availability of the free-to-air channels on a digital terrestrial platform. This is the result of the importance Government attaches to healthy competition between the three existing digital platforms to achieve progress towards digital switch-over in the time-scale envisaged. We look to the Government to accept this responsibility and to take speedily whatever action is necessary. We believe that there are significant lessons to be learned from this episode and we will return to it. (Paragraph 60)

  • We believe that local and community TV and radio has the potential to contribute to the social, economic and political development of local areas. Our predecessors referred to the opportunity to exploit the potential offered by local television based on a more imaginative approach to public service broadcasting.[3] We reiterate that view. (Paragraph 62).

  • In its reply to this report the Government must set out its conclusions on the outturn of the Access Radio pilot schemes for a tier of not­for­profit community radio services (and provide detail on what has happened to them in the interim between initial licence and new legislation). (Paragraph 63)

  • We recommend that the Government assess the Community Media Association's scheme for two tiers of licence for local broadcasting (not-for-profit and commercial) and set out its conclusions in its reply to this report. This must be accompanied by a statement of its policy on the provision of secure and commercially viable licences for the development of digital broadcasting of local and community services and their place, if any, within the ecology of public service broadcasting across the UK. (Paragraph 64)

  • As we have discussed above, the Government has a stated aim of ensuring universal access to the Internet by 2005. The potential for interactive digital TV to be used to gain access to the Internet would be a major boost in meeting this target. However, it is not at all plain sailing. We have already witnessed the failure of the much heralded WAP technology for mobile phones, delays to the development of 3G services (the third generation of mobile telephone technology). If the take up of digital television does falter as a result of ITV Digital's failure, and a cheaper and non-interactive set-top box comes into vogue, then a major opportunity to achieve progress with an important Government target may have been wasted. (Paragraph 66)

  • We urge the Government to seek early incorporation of the EU Copyright Directive into UK law. (Paragraph 70)

  • We recommend that Oftel, and OFCOM when it takes over the responsibilities of Oftel in due course, should take serious note of criticisms of its effectiveness in establishing a competitive UK market for broadband and follow up with remedial action—taking account of the proposal to require BT's network to stand on its own as a distinct business. (Paragraph 74)

  • We believe that the case for particular restrictions on media, or cross­media, ownership in any sector is now out­dated. We would be happy to rest on the developing competition regime and the vast amount of information and the many voices available through the Internet. (Paragraph 84)

1   Wireless Application Protocol (see Glossary of Terms annexed to this Report) for connecting mobile telephones to the Internet. Back

2   The Office of Communications (OFCOM) was established as a shell organisation in March 2002 by paving legislation: The Office of Communications Act 2002. Back

3   CWP, paragraph 106 Back

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 1 May 2002