Select Committee on Culture, Media and Sport Memoranda

Memorandum submitted by the Department for Culture, Media & Sport and the Department for Trade and Industry


1. The Department for Culture, Media and Sport and the Department for Trade and Industry have joint responsibility for Government policy on communications.

2. In December 2000 the two Departments published a White Paper, A New Future for Communications. That White Paper set out the Government's proposals for future regulation of the increasingly convergent communications sector. This memorandum outlines the work that has been done since the White Paper, both to take forward those specific proposals and to further the Government's broader policy aims. Particular attention is paid to those issues in which the Committee expressed an interest: public service broadcasting; digital broadcasting and analogue TV switch-off; media ownership; internet access; broadband networks; technological developments in the protection of privacy; and the balance struck between intellectual property rights and individual 'fair use' of broadcast or internet material.

3. The White Paper set out the overall objectives of Government policy, which have not changed since.


4. The Queen's speech announced that the Government would publish, during this session of Parliament, a draft Communications Bill which would give effect to the proposals set out in the White Paper. The Government plans to publish the Communications Bill in draft in the Spring of 2002. This will allow both for a full public consultation on the detail of the draft and for pre-legislative scrutiny by a joint Committee of both Houses of Parliament prior to introduction of the Bill, as soon as Parliamentary time can be found.

5. The pace of change in communications markets is unpredictable. Nevertheless, change is happening, and the need for legislation remains clear. As technology develops, markets fragment and evolve, and public expectations and attitudes change, it is increasingly important to take a strategic view across the communications sector. The Government needs to build a regulatory framework that can adapt to the market as it evolves, and allows scope to roll back regulation where it is no longer needed, particularly where competition can take the place of regulatory intervention.

6. Whilst the timing of the Bill's passage cannot be precisely predicted, it is reasonable to hope that, if it is introduced early in the Session, it might have completed all of its stages and have received Royal Assent by the end of the 2002-2003 Session.

7. In the meantime, the Office of Communications Bill was introduced into the House of Lords on 12 July. This Bill sets up OFCOM without giving it any regulatory powers, allowing work to begin on developing the structure of, and making appointments to, the new converged regulator. This should allow OFCOM to get going quickly after Royal Assent is given to the Main Bill. The OFCOM Bill completed its Lords stages on 13 December and was introduced into the House of Commons the same day. The Bill had its Second Reading in the Commons on 14 January. The Government hopes to obtain Royal Assent to this Bill by the end of March 2002.

Appointments to OFCOM

8. The Chairman and non-executive members of OFCOM will be appointed jointly by the Secretary of State for Trade and Industry and the Secretary of State for Culture, Media and Sport . These members of OFCOM will then be responsible for appointing the Chief Executive (subject to the approval of the Secretaries of State) and any other executive members.

9. The appointment of the Chairman and non-executive members will be done in accordance with the procedures laid down in the Code of Practice of the Office of the Commissioner of Public Appointments (OCPA). The Government will start this process following the OFCOM Bill's Second Reading in the House of Commons. This would enable the appointment of a Chair by the Spring, with the rest of the non-executives in post soon after. The executive appointments will take longer since the non-executives will need to be in post in order to begin that process. The entire OFCOM Board should be in place by the end of the 2002.

What can OFCOM do pending the Communications Bill?

10. Whilst the OFCOM Bill creates OFCOM, it confers no regulatory function on it at this stage. OFCOM's job will simply be to prepare to receive future regulatory functions, as well as assets and liabilities from the five current regulators (Oftel, the Independent Television Commission, the Broadcasting Standards Commission, the Radio Authority and the Radiocommunications Agency (part of the DTI)). This means that OFCOM and the existing regulators will be able to work closely together, while the Communications Bill is under consideration, to ensure that OFCOM is positioned to take on its regulatory responsibilities once the legislation comes into force.

11. OFCOM will be able to identify and establish the structure that will allow it in due course to do its job as a converged regulator across the Communications sector. It will be able to develop and implement plans for the full range of detailed transitional issues, including human resources, premises, finance, information systems and transfers of functions, assets and liabilities. OFCOM is likely to want to start the process of consultation with stakeholders on the way that full codes, licences and authorisations will be established and applied. Where appropriate it may want to appoint advisory bodies, though this may fall to existing regulators, whose powers to engage in such activity will be substantially broader than those of OFCOM as established under the OFCOM Bill.

12. OFCOM will not be engaging in any regulatory activity in this interim phase, and will not be able to interfere with the existing regulatory regimes, which will remain the sole responsibility of the existing regulators. Its sole function will be to prepare to take on the role of a regulator once that role has been determined by parliament.

13. The OFCOM Bill will allow key appointments to be made, accommodation and employment issues to be addressed, and the transfer of documents and data to be undertaken where necessary and appropriate. All of this will lead to OFCOM being in a position to take on its regulatory activities much sooner than would have been the case without the paving legislation. The Government will ensure that Parliament is fully informed of progress in creating OFCOM and preparing the Communications Bill.


14. The Communications Bill will be a substantial and complex piece of legislation, designed to create a flexible and responsive regulatory regime for a dynamic market. It is therefore essential that the legislation should be carefully considered. For this reason, following the publication of the Communications White Paper in December 2000 and the round of consultation that followed it, the Government plans to publish the draft Bill in the Spring for a further round of consultation. This public consultation process will allow the whole of the industry and consumers and citizens to look at the detail of our proposals and consider their impact.

15. In addition to this, the Government will be inviting Parliament to establish a joint Committee of both Houses, to undertake pre-legislative scrutiny of the draft Bill. This will ensure that the Bill is thoroughly ready for introduction by the beginning of the next session, if Parliamentary time can then be found.

Timing of the Bill

16. Many expected legislation this session, which might have enabled OFCOM to be formally up and running by the end of 2002. However, it is now clear that OFCOM will not be in a position to assume regulation of the communications sector before mid 2003 at the earliest; if legislation is secured in the 2002/03 session.

17. However, the Government believes that the introduction of the Office of Communications Bill will speed up the implementation of the main Bill's provisions. Much the same timetable on appointments to OFCOM applies as would had the Communications Bill been introduced this session. That is to say the full Board would not have been in place any sooner than we will have on our current timetable.

18. Both OFCOM and the existing regulators will be able to work together to plan the practical aspects of the move as they would have done had the full legislation been introduced earlier. Consequently, the Government hopes that when the Communications Bill is passed OFCOM will quickly be in a position to take on its regulatory responsibilities. It is important not to underestimate the practical difficulties involved in merging five organisations with differing legal status, from five different sites and with five very different cultures into one converged unit. Given these difficulties, even if the Communications Bill had been introduced in this session it would have been reasonable to expect a long lead time from the passing of the legislation to OFCOM being ready to start regulating as it dealt with all the practical issues.

19. The second implication of not taking the Bill in this session is that more time has been available internally to work on the drafting of the Bill, and the Bill can be published in draft in the Spring for further public consultation and pre-legislative scrutiny.

20. The Government believes that if more time and trouble is taken to prepare this complex legislation properly then the final result will be that OFCOM will be up and running without significant delay.

EC Directives : 1999 Review

21. Seven measures comprise the new regulatory framework for electronic communications networks and services arising from the European Commission's 1999 communications review. Of these, five (Framework, Access, Authorisation and Universal Service Directives and the Spectrum Decision) have now been agreed between the European Parliament and the Council and are expected to enter into force later this month or early in February. They are required to be implemented 15 months later, i.e. in May 2003 at the latest.

22. It cannot be certain that the Communications Bill will have completed its passage through Parliament by that point. The measures may therefore have to be implemented by secondary legislation under the European Communities Act 1972, in advance of the enactment of the Bill.

23. Of the remaining two measures, the Government has never intended to implement the proposed Communications Data Protection Directive through the Communications Bill; rather, it intends to update the existing Telecommunications (Data Protection and Privacy) Regulations 1999, again under the European Communities Act. The Competition Directive — a Commission measure, not subject to negotiation in the European Parliament and the Council — should not require specific implementation as it relates primarily to the abolition of special and exclusive rights that no longer exist in the UK.


24. Since the Communications White Paper, there has been further consultation on the extent to which the Bill should reform media ownership rules. There have also been notable developments in some policy areas that are outside the direct scope of the Bill:

Digital Broadcasting: Development and promotion of digital television

The Digital Action Plan

25. The Government set out its initiatives to promote digital television in the White Paper: Opportunity for all in a world of change, published on 13 February; one of which was to develop a comprehensive action plan to maximise the benefits of digital television. Details of other initiatives are set out in Annex A.

26. On 20 December, the Government issued The Digital Television Action Plan following consultations with industry and consumer groups. The Plan sets out a series of actions which need to be undertaken to ensure the switchover from analogue to digital television takes place; to identify who should lead on those issues and to set target dates for delivery. The streams of activities in the plan will be carried out through a number of dedicated groups. A Market Preparation Group will develop and co-ordinate a strategy to manage the process of raising the awareness and knowledge of digital television in both industry and the public. The Government will keep under review the timing of any Government led information campaign.

27. On 18 December, in response to the condition set by the Secretary of State for Culture, Media and Sport in granting approval for new BBC services, the BBC published their plan for the promotion of digital services.

28. On 10 January, DCMS published an information leaflet to inform local authorities and landlords on how they can upgrade existing distribution systems in blocks of flats to digital operation.

29. On 11 December, the Government launched a three month consultation on the management of terrestrial TV signals. The consultation seeks comments on the amount of spectrum which should be allocated to digital tv in the future. The consultation also invites comments on whether there should be a minimum level of geographical coverage of the multiplexes operated by the BBC and by ITV and Channel 4. The Paper also asks for comments on the extent to which future planning of spectrum should take account of the provision of local services.

Section 33 - the progress towards analogue tv switch-off

30. At present, a third or 8m of UK households have access to digital television. Under the provisions of Section 33 of the Broadcasting Act 1996, the Secretary of State is required to keep under review the development of digital terrestrial television, the availability of the existing analogue services in digital form and the possession of digital receiving equipment, in order to decide when analogue services might be switched off. In December, the Secretary of State wrote to the ITC and the BBC to ask for a report on these matters as required by Section 33.

31. The Viewers' Panel Report published on 28 December will form part of a wider consultation of viewers.

Development and Promotion of Digital Radio

Digital Services

32. The Radio Authority advise that commercial national digital radio services now cover over 80% of households. Commercial local digital radio services cover between 40% and 50% of households and the Authority continues to advertise new multiplexes, working towards a target of 80% in the current phase.

33. BBC national digital radio services currently cover 65% of the UK population. They aim for that figure to rise to 70% by September 2002, around 80% by the end of 2003, and hit 85% in early 2004. The BBC's five new digital services should help to drive the uptake of digital radio.

Digital technology

34. Digital Radio Development Bureau (DRDB) is a joint venture between BBC radio and commercial radio multiplex operators, formed in April 2001. The DRDB aims to increase the take up of digital radio in the UK through consistent and effective marketing, acting to co-ordinate the work of manufacturers, retailers and broadcasters.

35. To celebrate the 100th Anniversary of Marconi's successful wireless transmission across the Atlantic, in December 2001 the DRDB and the UK manufacturer VideoLogic produced a limited number of special edition portable digital radios at a price of £99. The radios went on sale for one day only at eight selected independent electrical retailers, and the offer was promoted on local and national radio. All sets were sold within thirty minutes of the shops opening.

36. Goodmans have announced they will launch five new products featuring digital radio (also known as digital audio broadcasting, or DAB) in the spring 2002. The products will include a personal radio/CD player(walkman style), a portable radio/CD player, a DVD player/radio, a DAB tuner and a car radio/CD player. All five products will be available in the price range between £99 and £199.

37. The prices of chips is decreasing, giving manufacturers the incentive to invest in DAB. For example, a hand-held portable radio proto-type is now being evaluated by a number of manufacturers and will come to market later this year. DRDB estimate that by the end of 2002 there will be 200,000 digital radio products in consumers homes.


BBC new services

38. On 13 September, the Secretary of State gave the BBC approval to launch new digital services:

  • Two new television channels for children - one aimed at children aged 6-13, another for six year olds.

  • BBC4 - a television service intended to create a 'forum for debate' covering news and current affairs, philosophy, science, history, art, performance, music and film.

  • Five new digital radio services, including a black music channel and an Asian network.

39. The approval was subject to conditions, including commitments to high quality, interactivity and the use of home-grown talent and productions. It gives the BBC the opportunity to create new programmes which educate and inform as well as entertain. Overall, the new channels should attract a wider range of viewers to all digital services. BBC3, a proposed replacement for BBC Choice, targeted at younger people was not approved as it was not clear that the proposal was truly distinctive. However the BBC submitted a new BBC3 application on 4 December, which will be considered in accordance with the published criteria for BBC new services.


40. The degree of regulation of the BBC by OFCOM was a particular subject of debate before and during the White Paper consultation. There will be time to debate the issues in more detail when the draft Communications Bill is published.

41. The Government remains committed to the policy set out in the White Paper. OFCOM will have an important role in relation to the BBC. The new three-tier structure of regulation will be generally deregulatory and will apply to all broadcasters. The BBC will largely be subject to the same degree of external standard setting and monitoring as all other public service broadcasters for each of the three tiers regulated by OFCOM. The aim is to create a more level playing field and it is an integral part of the new system to extend the involvement of the external regulator in the BBC, while increasing the self-regulation of all other broadcasters.

42. The Government's policy is a balanced one, ensuring the BBC maintains its independence and relationship with the Secretary of State and Parliament, while bringing it within the overall regulatory structure.

43. The BBC's obligations will be imposed principally by way of amendments to the BBC Agreement. The draft Communications Bill and details of the proposed amendments to the BBC Agreement will both be published in the Spring.

44. The BBC's role in the proposed new regulatory structure is set out in more detail in the briefing and table attached at Annex B

Media Ownership

45. The Communications White Paper made fewer firm proposals on the reform of media ownership rules than it did in other areas, but this subject generated a large number of responses during the consultation period.

46. Having considered these responses, on 26 November 2001 DCMS and DTI published a further paper, Consultation on Media Ownership Rules, which set out in more detail the key principles that the Government believes must lie behind any reform, and put forward some firm proposals and options for change. The consultation period ends on 25 January. Full proposals on all aspects of media ownership will then be included in the draft Communications Bill later in the year. The Government's key principles may be summarised as follows:

47. Media ownership rules exist to retain the balance of different media viewpoints that make democracy work, but they must also promote the most competitive market possible for the benefit of both industry and consumers.

48. The existing rules are outdated: they are not flexible enough to respond to the rapid change we have seen in media markets; they appear inconsistent and directed at particular areas of the media industries.

49. Given the possibilities of new technologies and new services to offer consumers a greater choice there may be less need for ownership rules in the future. In light of this the Government is determined to be as deregulatory as possible, and to consider different methods of regulation in the future. However, legislation must address the present situation, where most people engage with the media in its traditional forms, and media ownership rules remain the best way of doing this.

50. Competition law alone is not sufficient. It can address issues of concentration, efficiency and choice, but it cannot guarantee that a significant number of different media voices will continue to be heard, and cannot address concerns over editorial freedom or community voice.

51. The Government's core aims are:

  • to retain a diversity of content from a plurality of sources;
  • to promote competition;
  • to be flexible in allowing legislation to adapt to changing market conditions;
  • to provide as much predictability as we can for business.


52. The Government wishes to ensure that the benefits of the Internet are made available to every citizen. In March 2000 the Prime Minister made a commitment that all those who want it should have access to the Internet by 2005, and in September 2000 the E-Minister and e-Envoy set out a comprehensive strategy for achieving universal access. The Government remains committed to the goal of universal Internet access. This is a matter being taken forward by the Devolved Administrations, and good progress is being made:

  • In England there are currently around 2,100 UK online centres (6,000 by the end of 2002) where you can access the Internet. These centres are being set up in high-street shops, village halls, schools, libraries and also in dedicated mobile centres. Information on local centres can be found at or by phoning 0800-77-1234.

  • The Government is on target to have all schools and libraries online by the end of 2002. More than 60 per cent of libraries are currently online along with 97 per cent of schools.

  • Initiatives such as Wired Up Communities - £10m for 7 pilot schemes - is putting the Internet directly into the homes of people from the most disadvantaged communities.

  • Recent DfES research shows that since the launch of the Computers for Teachers scheme 73.4% of teachers are now confident in the use of ICT.

  • By October last year 24,000 low cost recycled PCs had been delivered to low income families as part of the Computers Within Reach initiative.

53. Wales has committed funds to implement the People's Network in libraries. This will allow the number of terminals in public libraries to increase from 200 to approximately 2000 by the end of 2002.

54. Scotland currently has 223 learndirect Scotland learning centres in place across the country with a target of establishing 300 learning centres by the 31st of March 2002. A proportion of the New Opportunities Fund has also been committed to implement the People's Network in libraries across Scotland, providing access to the Internet. In addition to this the Scottish Executive is launching a £5 million programme in January 2002 aimed at creating over 1000 new access points in a wide range of venues accessible by the public.

55. Northern Ireland is developing its libraries to be public Internet access points and electronic information and learning centres. Implementation is planned to be completed by the end of 2003.

56. Recent mapping research estimates that by the end of 2002 nearly 99% of households in England will be within 5 miles of a public Internet access point, 95% within 3 miles and 78% within 1 mile. Comparable figures are not available for the Devolved Administrations.

57. 39% of homes in the UK are online, with 53% having accessed the Internet at home, work, or at a public Internet access point. An additional 3 million households have had Internet access since March 2000, up 11%. These increases have been encouraged by some of the lowest Internet access prices in the world, and the availability of flat-rate Internet access packages. Over the last year, users have been spending an additional two hours per week online.

58. People are beginning to trust the Internet. There has been a 41% increase in adults buying online - 2.3 million more than last year. 2 million more are using Internet financial services, including online banking (up by 45%). To increase the public's confidence in the Internet, the Government has also developed a number of initiatives to deal with crime on the internet. Foremost amongst these has been:

  • establishment of the National Hi-Tech Crime Unit;
  • launch of a campaign to deal with child protection on the internet; and
  • comprehensive information on how to shop safely online, and how to seek redress if fraud occurs.

59. Phase two of the UK online campaign was approved by Ministers in September and started in November with a 500 TVR 40" TV burst of a new TV advertisement, 'Revolution', featuring a mixture of celebrities such as Stephen Fry and Jenny Powell and ordinary people. UK online was the first Government campaign to run on the Sky Interactive platform, whereby consumers could either get more information on UK online via their TV screens or send off for an information pack. This was well received, with a response rate that led Sky to judge it 'one of the best campaigns ever' to have run. A second TV burst is currently running, having started on 7th January. In addition to the TV support, a single UK online freephone number (0800 77 1234) was launched that people could contact for further information about any part of UK online, from locating their nearest UK online centre to finding out more about UK online for business. A campaign website was also developed for more 'web savvy' consumers. The TV is also supported by PR activity, including over 70 interviews with local radio stations featuring Jenny Powell and the UK online 'Internet Guru', local press competitions and the launch of the UK online celebrity ambassadors to gain additional media awareness.

60. In addition to activity generated solely by UK online on of the other successful aspects has been Partnership activity, such as that featuring Age Concern and Abbey National, whereby over 55s were given free Internet taster sessions at Age Concern centres throughout England. The campaign has been at the top end of expectations generated by modelling tools, with over 67,000 requests for further information and 1.5 million website hits to date, which makes it the most successful UK online campaign aimed at the general public.

61. Information and communication technologies are transforming economies and societies around the world. The UK has the capability to be a global leader in this new knowledge economy, bringing wealth and new opportunity for all of us. The 2001 UK online Annual Report ( sets out the demanding programme of action that the Government will be taking over the next year and beyond to ensure that the UK continues to remain at the forefront of the knowledge economy and the benefits of the Internet are available to those who want it.




62. In February 2001, the Government published UK online: the broadband future. This accompanied the Opportunity for All White Paper produced by DTI and DfES. These reports set a new target — "For the UK to have the most extensive and competitive broadband market in the G7 by 2005".

Progress to date

63. The UK online: the broadband future report committed the Government to establish a Broadband Stakeholder Group (BSG) to develop a detailed strategy for meeting our target. In December 2001, the Group presented their first report to e-Commerce Minister, Douglas Alexander.

64. In parallel to this report, Government published its own Broadband strategy (see below) as part of the 2001 UK online Annual Report. This also included a detailed response to each of the recommendations put forward by the BSG.

Additional progress

65. A £30 million fund has been created to allow Regional Development Agencies (RDAs) and Devolved Administrations to develop schemes for extending broadband networks to a wider group of customers than those who would appear immediately to be commercially attractive. All fund holders have developed action plans in consultation with central government, covering a range of projects to start early in 2002.

66. BT has rolled-out its ADSL service over the traditional copper loop to 1000 exchanges covering 60% of homes and businesses. Oftel has required BT to offer its wholesale ADSL product to other operators and service providers on the same terms as to its own retail arm. The number of end users of ADSL is now over 120,000 - a five-fold increase since the end of last year.

67. BT reduced its wholesale DSL price by £5 per month in July and has recently announced half-price installation through to the end of 2001. The advent of self-install DSL modems could reduce costs permanently.

68. The local loop unbundling framework is now in place and whilst take-up has been slow due to the economic climate, LLU has already started to have an impact on prices.

69. Cable companies are providing competition, and cover 50% of homes. Cable take-up has risen 550% since last year - there are now 170,000 cable users. NTL's price is now among the lowest in the OECD and Telewest reduced its price by 25% earlier in the year.

70. The Government has released spectrum to support 3G mobile and broadband fixed wireless services. Licences for FWA services covering 60% of the population have been issued. A number of companies are also developing satellite broadband services.

71. The Countryside Agency is carrying out research including current and likely future access to broadband services and an audit of public/private sector demand as part of its 'healthchecks' on 140 market towns. Internal audits of 9 market towns have been carried out and results fed into a demand aggregation study.

72. This accompanies a rolling programme of research by Analysys. With the Broadband Stakeholder Group it has devised a 'dashboard' of six indicators to measure the UK's position against the rest of the G7 in respect of competitiveness, extensiveness and take-up.

Where do we stand?

73. Market extensiveness: 66% of the population is now covered by an affordable broadband technology (cable or ADSL, and shortly Fixed Wireless Access). This is comparable with the G7 - ahead of France, but behind Canada and Germany. Satellite holds the potential for rollout in rural areas. The UK has a good addressable market: many consumers have already bought into flat-rate, ISDN and iDTV packages.

74. Market competitiveness: Many consumers have a choice of packages (40% of the population approx.). BT now has competition for its DSL services from Freeserve and Iomart. The first unbundled local loops are now operational and there are signs that this is beginning to impact on price. Overall, the UK is 4th in the G7 and has Europe's most competitive broadband market. With continued infrastructure and retail competition set to rise, combined with increased availability, take-up of broadband services should follow suit.

The Government's strategy

75. There is no 'magic bullet' which will deliver a step change in broadband roll-out and use in the UK. Instead, we need to stimulate a virtuous circle in which demand and supply grow in parallel, each reinforcing each other. Market players will be the main drivers of this, but Government can influence the pace of change.

76. To help set this virtuous circle in motion, we need first to stimulate adoption of narrowband Internet, as a key first step on the ladder. In addition we need to:

  • Intensify competition in broadband markets, by:

  • Continuing to drive forward competition at all levels, including through competitive access to BT's local loop, and fair access and interconnection to BT's wholesale DSL and leased line services

  • Making more radio spectrum available, opening up the possibility of more competition from broadband wireless services.

  • Drive up demand for broadband, by:

  • Using tax incentives to stimulate teleworking, and small business investment in broadband access equipment

  • Working with the broadband supply industry to facilitate an industry-wide collaborative campaign to promote the benefits of broadband

  • Providing more encouragement to SMEs to adopt broadband, via the £66 million UK online for business programme, including through a web-based guide to broadband availability for SMEs and a network of demonstrators of practical applications

  • Stimulate production of new broadband content and applications, by:

  • Intensifying marketing of the R&D tax credit as a driver for R&D in the broadband content sector

  • Ensuring that wherever applicable business support schemes across DTI meet the needs of, and are effectively marketed to, the digital content sector.

  • Stimulating pilots which test different commercial models around broadband content and facilitate the development of innovative ideas where the market is not yet mature enough to do so itself.

  • Embedding broadband in the delivery of key public services (for example through Curriculum Online and Culture Online)

  • Establishing a partnership with NESTA to promote blue-skies research in public sector broadband applications, focusing initially on broadband learning.

  • Facilitate broadband roll-out in rural areas, by:

  • Encouraging infrastructure sharing by industry to reduce the cost of rollout.

  • Facilitating satellite broadband deployment, with a fast-track, on-line licensing regime and a review of planning regulations for satellite terminals

  • Using more effective procurement of the public sector's broadband requirements to improve value for money and in particular to drive broadband into rural areas. Action on this includes a regional pilot for a new Broadband Brokerage Service, which will allow companies, public sector organisations, communities and individuals to register their interest in pursuing broadband, and then broker aggregated solutions once a pattern of demand for a particular area has reached critical mass.


77. The Patent Office is responsible for Intellectual Property (Copyright, Designs, Patents and Trade Marks) in the UK.

78. Technical protection measures (TPM) for copyright material (such as electronic books, CDs and DVDs) are currently being developed and applied in order to give right holders more effective control over unauthorised access to, and copying of, their works, especially when broadcast or made available online.

79. Legal protection for TPM has been a feature of UK copyright law since 1989, and will be strengthened as a result of an adopted EC Directive on copyright and related rights in the information society (2001/29/EC) which is to be transposed into national law by 22 December 2002.

80. The provisions in the Directive are based upon corresponding articles in two new treaties in the copyright field which were agreed in 1996 under the auspices of the World Intellectual Property Organisation (WIPO). This general agreement of the international community to outlaw unauthorised circumvention of technical measures used by right owners to protect their material against illegal copying is an important step in ensuring the continuing protection of copyright material in the digital age.

81. The copyright Directive was the subject of long and careful deliberations during the process leading up to its adoption, both in the EU Council of Ministers and the European Parliament, and seeks to strike a fair balance between the interests of right owners and those of legitimate users of protected material. The aim in negotiations has been to maintain those exceptions to copyright that currently exist in UK law, including that which

 allows the recording of broadcast material for later viewing (time-shifting). The final form of the Directive is such that viewers' and listeners' existing expectations in this area can continue to be met.

82. In particular, since national exceptions to rights could be rendered useless if TPM were applied indiscriminately, the Directive provides that Member States can take action to ensure that users can generally still benefit from such exceptions. Moreover, it is recognised that we are in a period of fairly rapid technological change, and the Directive also provides for a review mechanism, including further examination of the impact of TPM on lawful uses of protected material.


83. Privacy Enhancement Technologies (PETs) are intended to assist in safeguarding the privacy of those using electronic media such as the Internet. This is usually taken to cover various consumer interests such as lack of knowledge about data sharing, the availability of informed choice about techniques such as consumer profiling and the avoidance of exposure to loss of control and possible identity theft.

84. This is a new area and there is no agreed consensus on what technologies should be included in this grouping. There are overlaps in respect of authentication technologies in that the need to be certain of the identity of the person being dealt with overlaps with technologies such as digital signatures and there is a very strong overlap with security technologies (information can be protected from unwelcome access for a number of reasons including privacy). Cryptography-based technologies are also used to protect intellectual property rights.

85. Using recent work by the OECD, the Government notes the following technological developments in relation to privacy protection:

  • Cookie managers or blockers

  • While there is considerable uncertainty about the nature of the threat posed by cookies, consumer concern is reflected by the availability of a number of products which allow the management or simply the wholesale rejection of cookies.

  • Ad Blockers

  • These work in a similar way and allow the user the opportunity to block the delivery of on-line advertising.

  • Cryptographic technologies

  • These fall into two categories: one — usually referred to as "encryption" — allows data to be digitally scrambled for secure storage or transmission. The other is the basis of digital signatures which allow greater certainty about the identity of the transacting parties. Encryption technologies have not been widely adopted by individual users to date. Digital signatures are being encouraged by the Government through creating a framework (the Electronic Communications Act 2000) and through the increasing use of such technologies in eGovernment transactions.

  • Anonymisers

  • These are web-based applications which act as intermediaries between users and web sites and thus prevent the web site identifying the user's IP address. They also offer anonymous e-mail services. We have no data on the up-take of such services.

  • Platform for Privacy Preferences Project (P3P)

  • This is a World Wide Web Consortium project to develop an XML-based method for users to establish parameters on the release of personal data in web transactions and for web sites to respect those privacy preferences. If the site is P3P compliant, a consumer should be able to visit knowing that information will only flow subject to parameters which he or she has set. This project is gaining momentum.

  • Privacy networks

  • These are web-based services which go beyond the simple approach of anonymisers. They act more like ISPs where the account name is a pseudonym and the information relayed to web-sites is strictly controlled and cookies and other personalised services are stored at the privacy network server rather than on the user's computer. This service has attractions in that it allows most of the advantages of personalisation of services without compromising personal privacy. We have no data on the use of these networks.

  • Information brokers

  • These services - sometimes referred to as infomediaries - track consumer surfing and on-line purchasing habits and then act for the vendor in compiling tailored information on on-line opportunities thus obviating the need for the user to personally trawl through web-sites. This results in the service provider storing significant personal information and the necessity of trust by the individual that that information will not be misused.

  • Proxy servers and firewalls

  • These technologies sit between the user and the internet and allow the user to control access to his browser. They were designed for security purposes - to control hacking attacks etc - and are somewhat limited in their ability to control the flow of personal information.

Government promotion of PETs

86. For the most part, the Government believes the market should decide which privacy tools are most suitable. It is supporting the development of PETs as part of its innovation programme (such as the Managing Information Programme). The Office of the Information Commissioner also take an interest in and support the use of appropriate technologies for consumers to protect their personally identifiable information. The Government works in various multilateral organisations — such as the OECD — where information on such technologies is exchanged.

87. DTI and the Office of the eEnvoy are promoting information security, including compliance with the regulatory requirements imposed by the Data Protection Act and European legislation, through various channels. In particular, the Government is promoting the value of authentication and firewall technologies.

January 2002

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