Select Committee on Culture, Media and Sport Appendices to the Minutes of Evidence


Supplementary memorandum submitted by the National Consumer Council


  Consumers need to be confident that their interests are properly represented in this fast-changing and complex sector, and so we very much welcome the proposal to establish a Communications Consumer Panel. To be able to do its job properly, the Panel will require economic, financial and social expertise to analyse developments, identify the implications and lobby for the consumer interest. It must be well-informed, expert and connected into consumers' views and experiences. It will need its own staff, and to operate at arms-length independently from OFCOM. The Panel's constitution—or terms of reference—should be set out in statute in the forthcoming communications legislation.

  To be effective the Panel will need to:

    —  Focus on representing domestic consumers' interests (and those of small businesses) with a specific brief to represent the interests of disadvantaged consumers.

    —  Have a broad remit to cover all issues of relevance to consumers. It will need to be able to deal with content as well as service delivery matters from the consumer standpoint. The reason for this is that access is crucial for consumers but a key question is: access to what? The consumer interest covers choice, diversity and quality of services as well as how they are delivered and on what financial basis. The market cannot be relied on to offer affordable and universal access to diverse and high quality broadcasting. Public service broadcasting is therefore critical to consumers' interests, especially the interests of disadvantaged consumers.

  The Panel will also need to:

    —  Reflect national and regional interests and other aspects of the diversity of consumers' interests.

    —  Be independent of OFCOM (to the side, not subservient to the regulator); with sufficient resources to do its job. It should set its own agenda and have the freedom to promote its views on behalf of the consumer interest.

    —  Have legal standing to represent consumers' interests not only to OFCOM but also to other relevant regulators, Government departments, Parliamentary Committees, the industry, the European Commission, and other international bodies.

    —  Operate openly and accountably.


  Consumers' interests should be at the heart of OFCOM:

    —  Its Board members should include at least one person with direct consumer expertise/experience.

    —  OFCOM should have a dedicated consumer affairs department or unit to drive forward the consumer agenda within OFCOM. Training will be of crucial importance for the culture of the organisation. Consumer impact assessments should be a routine aspect of its work, especially when consulting on policy options.

    —  A formal Memorandum of Understanding will be needed between OFCOM and the Consumer Panel to codify their relationship, ensure co-operation and enshrine their respective independence. There should be public consultation on the draft memorandum.

    —  OFCOM will need to be well connected into information on consumers' needs and experiences, and should liaise with the Consumer Panel on forward work programmes, including co-operation on consumer research.

  OFCOM should have duties to ensure openness and public accountability for its activities, including a duty to give reasons for decisions, and to publish consumer impact assessments. The Communications Consumer Panel should be able to scrutinise OFCOM's work and audit its performance. The Panel should, therefore, have a duty to report annually on the effectiveness of OFCOM's policies in fulfilling its consumer-related objectives (in a similar way to the Financial Services Consumer Panel).

  It will be important to ensure full input from consumer representatives towards establishing OFCOM. The National Consumer Council now runs the Communications Consumer Forum. This is an NCC initiative to bring together consumer representatives across broadcasting and telecommunications to discuss common issues. Periodically the Forum members meet officials collectively, and this route therefore offers a practical and direct way for civil servants and regulators to discuss matters relating to OFCOM—and the Communications Consumer Panel — with consumer representatives.


  We recognise the need to avoid being over-prescriptive about public service broadcasting (PSB). Flexibility and risk-taking are essential for innovation and diversity. As the Culture, Media and Sport Committee said in its report on the Communications White Paper, PSB is a constantly changing phenomenon. However, basic principles or criteria are required to set an overarching framework for PSB, to clarify the role of the various PSB broadcasters, and to help decide whether new services or broadcasters can be defined as PSB. Such clarity will be particularly vital in the run-up to the review of the BBC's Charter in 2006. It would be sensible for that review to take place within the context of a clearer PSB framework.

  A framework for PSB should be based on consumer needs. As we stated in our report on PSB: "A system of public service broadcasting is required which is universally accessible and affordable, which informs, educates and entertains, and which meets other consumer criteria of choice, information, fairness, redress and representation." (Tuning In To Consumers, NCC, 1999).

  With regard to content regulation, we welcome the flexibility of the new arrangements proposed in the Communications White Paper. However, it is crucial that the companies' statements of programme policy do not become a mere public relations exercise. Without setting down a rigid set of rules, it will be necessary to foster high standards and consistency across PSB broadcasters in areas such as the criteria for assessing performance, and the process for drawing up the statements, which should include consumer consultation. OFCOM should draw up good practice guidelines, building on experience gained from the first rounds of publication and review of programme policy statements.

  There will need to be room for independent consumer commentary on the adequacy of the processes. Industry will, of course, be in close and regular touch with OFCOM. But it would be helpful for the industry to be required 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 "nuclear" 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 require adequate arrangements for dealing with content regulation, possibly through a Content Board as a sub-committee of the OFCOM Board. Whatever arrangements are put in place, there should be close liaison with the Consumer Panel especially over PSB issues. Overall, OFCOM will need to ensure that it stays in touch with consumers' views but also recognises the diversity and subjectivity of views on content.


  Digital switchover will mean that people have to replace or convert all television sets and videos. The issue of TV equipment in multiple-occupation institutions, such as residential homes and prisons, also has to be addressed. Around 100 million items will need to be converted in total—this is an approximate figure but it is clear that it will be a very large number.

  We understand that the Digital TV Group is trying to work with retailers to produce a quality mark and code of practice on selling digital equipment—retailers would sign up to advising on all digital platforms, do installation and aerial checks, or list aerial installers. Consumers will need to know how to find out which retailers have signed up to any codes of practice, and what the codes require the retailers to do.

  In terms of a switchover date, in our view the government must adhere to its tests of availability and affordability, and resist any pressure to dilute the tests. Switchover should be test driven, not date driven.


    —  The government should clarify what it means by universal internet access: does this mean from home or in the local community? How is the government's goal of universal internet access to be realised? Should it be based on a phased programme with priority for disadvantaged groups (such as people with disabilities or those living in remote areas)?

    —  The government also needs to make clear how it sees the role of broadband, narrowband and radio-based technologies, as well as that of digital TV, in delivering the goal of universal internet access.

    —  Public policies on digital TV, internet access, and e-government need to be coherent and co-ordinated, and seen to be so.

    —  If broadband is seen as crucial by government and therefore part of public policy, the Government should explore how it can be rolled out in all areas.

    —  The affordability and attractiveness of services and equipment, ease-of-use, and availability of interesting applications will all be key to future internet take-up.

8 April 2002

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