Office of Communications Bill [Lords]

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Dr. Howells: I have listened fascinated to the hon. Lady's life story. I wonder what she had for lunch on the day that she failed her exams.

There is no change to the White Paper proposals. The OFT and Ofcom will both have powers and individual cases will be handled by one or the other, which is what happens in every single regulatory regime. There will be administrative arrangements to ensure that the best-placed authority handles a case, as there are now between the OFT and Oftel. I hope that that resolves the hon. Lady's dilemma.

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Miss McIntosh: No, it does not. I imagine that by Tuesday I will have a plethora of further correspondence on this matter. When the Competition Act 1998 was passed, many hon. Members expressed concern about the granting of concurrent powers. I am not sure whether the Minister is saying that the position that he described arose as a result of the 1998 Act, because one of its purposes was to inscribe and introduce into UK law articles 85 and 86 and others of the treaty of Rome. Many hon. Members were concerned about the granting of concurrent powers in terms of whether the sector regulators were equipped to apply the powers and of the dangers of fragmentation of interpretation.

Many people take the view that concurrent powers are a good idea in theory, and I am sure that the Minister could wax lyrical for hours about that. However, in practice they are good only if they are granted to a body that is established and equipped to act as a competition authority. From what we have heard today, Ofcom is neither equipped nor destined to be primarily a competition authority. It is a regulator in many areas, but competition should not be its primary responsibility. Working within a closely defined legal framework and under the overall strategic direction of the OFT is unacceptable.

Despite the various merits of the structure that is being proposed for Ofcom for other purposes, NTL, for one, has grave doubts about whether it is appropriate as a competition authority. It is also perplexed that the Towers Perrin report does not appear to have considered the basic template, at least in respect Ofcom's economic regulation functions, for the structure of a successful competition authority. It is appropriate to ask some searching questions, and amendments Nos. 61 and 62 are probing amendments about the extent to which, given the proposed structure, concurrent powers are appropriate.

Paul Farrelly: I am sure that the hon. Lady, as an experienced competition lawyer, agrees that there is a great distinction between a duty of promoting a competitive environment and one of deciding specific questions of ownership. When Ofcom is considered in the light of the main communications Bill, I hope that the questions of cross-media ownership will remain with the OFT, so that Ofcom is not burdened or diluted by scoundrels from the print media like myself. That would stray Ofcom from its purpose.

I hope that the hon. Lady will not only make that distinction, but correct the hon. Member for Lichfield, who said that Ofcom would necessarily have responsibility for questions of cross-media ownership. If the hon. Lady will not correct him, perhaps she should send him for correction.

4.15 pm

Miss McIntosh: I am not going to intervene on the private grief between two hon. Members.

The first point that the hon. Gentleman made was valid. If I were a competition lawyer, I would not know who was the competition authority: Ofcom or the Office of Fair Trading. I question the extent to which concurrent powers are appropriate for the proposed structure. How will the powers be shared,

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and who will have the last word? As a minimum, this paving Bill should create a duty to liaise with the Director General of Fair Trading in order to ensure that a coherent structure to deal with competition law is high on the list of priorities. The Bill will not do that without the amendments.

To be an effective competition authority, Ofcom must work with the OFT to develop proposals for the exercise of concurrent powers under the Competition Act 1998, for the reasons cited by the hon. Member for Newcastle-under-Lyme (Paul Farrelly). During the passage of the 1998 Act, questions were not answered. There was debate on the granting of concurrent powers to sector regulators. Ultimately, those powers were granted, but concern was raised that that should not lead to forum shopping or fragmentation of the regime for enforcing competition law.

Ofcom's primary function should not be that of a competition authority. Of those who will serve on the board, or as chair, deputy chair or chief executive, no one has agreed with our proposal that one of them should be a lawyer or an economist, or should have experience of competition matters. The hon. Gentleman also failed to support the amendment that would ensure that someone should have knowledge of competition policy in relation to media ownership.

Paul Farrelly: Concurrent powers strengthen the hand of competition. Forum shopping is not a necessary result of two bodies having powers. The body best placed to determine a particular question would do so.

Miss McIntosh: I still believe that the Competition Act 1998 will lead to forum shopping. There was general agreement in all parties about that. We are the poorer for not having present a DTI team, who might have had better memories.

Michael Fabricant: I was listening to the interesting remarks made by the hon. Member for Newcastle-under-Lyme, who has already, in his short parliamentary career, made an important impact in Staffordshire and his constituency. He may have misunderstood the intention of the White Paper. From page 41 onwards, it details the role of Ofcom in cross-media ownership. Whether that is part of Ofcom's role is another matter, but the Government clearly feel that it is.

Miss McIntosh: That supports my argument. Competition policy must be clearly recognised as primus inter pares if it is going to be effectively discharged by multiple bodies. That logic is followed by the Competition Act 1998, which reserves key policy-making functions to the Office of Fair Trading. We need to know that the Government have that in mind, that they will specify that Ofcom will be responsible only for certain competition aspects and that others will be remain with the OFT.

My amendments follow that logic, and seek to strengthen the commitment to establishing Ofcom as a viable competition authority in its own right. The Director General of Fair Trading will also be able to put his input and experience into organising the OFT following the introduction of the Competition Act

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1998. We cannot let the Ofcom go through as it is without that point taken on board.

Amendment No. 61 refers to

    any proposals by the Secretary of State for the conferring on OFCOM of any functions relating to the promotion of open and competitive markets.

That was the wish that was so forcefully expressed by the Select Committee on Culture, Media and Sport, and enthusiastically endorsed by the Government in their official response.

Amendment No. 62 refers to

    including co-operating with the Office of Fair Trading on matters relating to the promotion of open and competitive markets.

I have some difficulty in understanding why the Government have backed down on specifying, as I believe they should, where there is a conflict. It should not be Ofcom that resolves things case by case, but the OFT.

Competition policy has the specific aim of preserving the long-term interest of consumers, viewers, citizens and the whole industry. That can be done by promoting open and competitive markets that deliver choice, low prices, quality of service, a wide variety of content and content of good taste and decency. Where competition is not fully effective, adopting appropriate regulatory measures to ensure a high level of consumer protection, competition and a wide variety of content, including content of high quality, should be the preserve of the competition authority. It should also maintain a variety of public expression and maintain accepted community standards and content that balance freedom of speech against the need to protect from harmful or offensive material, and ensuring appropriate protection of fairness and privacy.

The Bill should include a specific task that states that Ofcom's duty is to promote open and competitive markets for broadband services, including broadband access. The Bill should not be allowed to remain silent on the relationship between Ofcom and the OFT, particular on matters that relate to the promotion of open and competitive markets. The Bill cannot remain silent because it is not helpful to competition lawyers and other advisers out there who want to ensure that the industry follows best practice.

Angela Watkinson: The Select Committee report states:

    Fostering competition is the first step to promoting plurality in the media

and says that there is a continuing need for backstop powers to underpin plurality of ownership, and of views in the media. The essence of the amendment is those backstop powers.

Miss McIntosh: I am most grateful to my hon. Friend. Her comment is extremely helpful, emphasises what we are seeking to do and adds power to the arguments behind the amendments. It shows that there is little daylight between us and the Select Committee with its distinguished Members such as my hon. Friend the Member for Lichfield and the right hon. Member for Manchester, Gorton (Mr. Kaufman). We are all in the same boat, paddling in the same direction

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and we are getting no support or prevailing wind from the Government.

In the Towers Perrin report, there is a very helpful example of what competition activities are expected to stop and what are expected to start under Ofcom. Those expected to stop include

    Deregulation activity flowing from market and non-market reviews following new EU Communications Directives.

Presumably, that will be a good thing. It is less regulation so will pass the principle of light touch. Examples of activities expected to start under Ofcom are in precisely that area that forms the context for the amendments. The first involves:

    Competition Act (and certain sections of Fair Trading Act) concurrent powers extension to broadcasting.

I am not seeking to blame the responsible Department—it might not be the Minister's Department, but the DTI—but there is a gap here that we must plug. The general understanding is that the Bill will introduce concurrent powers that will be extended to broadcasting, and we are informed of that in the report. It cannot do that if we do not know precisely where Ofcom will be applying the Competition Act 1998 and—news to me—certain sections of the Fair Trading Act 1973 and where the OFT will have that responsibility. It is an impossible position in which to place practising lawyers and economic advisors, if the Government do not take the opportunity to advise us of what they intend.

A second example of an activity expected to start under Ofcom is

    Competition work associated with spectrum trading operations.

Again, that is a new ball game, a whole new area opening up, and we still do not know precisely how Ofcom and its structure will serve that activity. A third activity expected to start under Ofcom is

    Completing implementation of EU Communications Directives and carrying out ongoing regulatory work . . . on market reviews.

Those three activities are expected to start under Ofcom. We are told that the sole function of this Bill is to prepare Ofcom for those new activities and for its regulatory role, but we are not told what competition role it is to play nor how its structure will equip it to play that role. I believe that we cannot let the Bill go through without accepting amendments Nos. 61 and 62.

I urge the Minister to use this opportunity to confer on Ofcom any functions relating to the promotion of open and competitive markets, as I and various outside bodies have urged him to do. There was a groundswell of support to that effect from both sides of the House when the Competition Act 1998 was enacted. The very distinguished, highly regarded, well-informed, well-respected Select Committee on Culture, Media and Sport also urge that. The gap might be an oversight, but we must plug it. There must be a specific reference to co-operation between Ofcom and the OFT on matters relating to the promotion of open and competitive markets.

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Knowing how open-minded, independent-minded and free-spirited this particular Minister is, I see no problem in his acquiescing with my generous invitation to support amendments Nos. 61 and 62, if not amendment No. 39 as well.

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