Joint Committee on The Draft Communications Bill Appendices to the Minutes of Evidence


APPENDIX 4

Memorandum submitted by Professor Steven Barnett and Professor Jean Seaton, University of Westminster

1.  INTRODUCTION

  1.i  We are submitting this evidence as independent academics and commentators on media policy at the University of Westminster. Steven Barnett is professor of communications and has written books on the BBC, on media and politics, and television and sport. Jean Seaton is professor of media history and has written books on media policy and on television journalism; she has just taken over from Lord Briggs as official BBC historian. We are not affiliated to nor have any relationship with any media institution or organisation.

  1.ii  We have divided our evidence on the draft Communications Bill into five sections. First, our reactions to the proposals on ownership; second, the role of the content board; third, the Bill's approach to and enforcement of public service broadcasting; fourth, the relationship between the BBC and OFCOM; and finally, the provisions for safeguarding news and current affairs coverage.

2.  OWNERSHIP

  2.i  The decision to open up commercial broadcasting to takeovers by foreign companies—and thereby make Britain one of the most liberal communications regime in the world—carries with it substantial risks for British broadcasting. It is perhaps worth remembering that our television advertising market, at around £3 billion, is small relative to the American market and that we have so far been successful in marshalling that revenue to ensure there is a place for quality, diversity and innovation on our commercial channels. We challenge the explicit statement of the government that "consolidation in the TV industry will benefit consumers and companies alike". On the contrary, evidence from around the world suggests that the more intense the competition for advertising revenue, the less room there is for diversity and innovation in the schedules.

  2.ii  Advertising revenue is dictated by GDP, independent of the performance of commercial channels. Since the advertising "cake" cannot be increased by inward investors, it is difficult to see the attraction of British television licences unless investors can exploit their own back catalogues or create programmes which have more global attraction. Either way, there will be a tendency to dilute the volume of original production aimed at British audiences. It will require a tough and determined content regulation regime to withstand the growing corporate pressures toward homogenisation, and we can see no obvious benefits for the core cultural and democratic benefits, which free-to-air broadcasting can deliver.

  2.iii  The relaxation of cross-ownership restrictions are potentially even more damaging for two reasons. First, the consolidation, which will inevitably follow (and which is the industrial rationale for this deregulatory approach) will reduce still further the plurality of voices essential for a healthy democracy. While the government recognises the uniquely important role of the media in this respect, it appears impervious to the natural consequences of its emphasis on a primarily competition-based approach to ownership.

  2.iv  Second, allowing major newspaper proprietors to own Channel Five offers significant opportunities for cross promotion of media products and exploitation of editorial space to denigrate any regulatory attempts to impose fines or onerous public service obligations. While, again, this may be a legitimate business and competition objective, we do not believe it is in the public interest. It is worth remembering that Channel Five was created with very weak public service objectives, primarily to create more competition in the airtime market. It is now established, and with determined cross-media support could expect to overtake ITV as the country's most popular TV channel. We are particularly concerned about the impact on the independent and commercially funded Channel Four, whose revenue is likely to be squeezed between two international corporate players one of whom will be able to use their newspaper holdings to leverage support for its terrestrial channel.

  2.v  We would therefore like to see the so-called "20-20" rule reinstated, preventing any newspaper owner with more than 20 per cent of the national market from having more than a 20 per cent stake in any terrestrial commercial TV service. The argument that "convergence" is breaking down the barriers between screen and print has no basis in empirical evidence: newspapers and television are still the mass media, which between them carry the burden of democratic communication for the vast majority of electors. Their ownership should remain separate.

  2.vi  We are also concerned about the scope for abuse of fair competition afforded to owners of television platforms who are also content providers. The success of the digital satellite platform is laudable, but gives BSkyB inordinate power over terms of access to its encryption and subscriber management systems, to the benefit of its own Sky channels. The current enquiry by the OFT demonstrates how slowly the wheels of competition law can turn, and the urgent need for ex ante rather than post hoc regulation. Some kind of regime, which separates platform ownership from content provision should be written into the Bill.

3.  THE CONTENT BOARD AND CONSUMER PANEL

  3.i  We welcome the introduction of a Content Board within the OFCOM structure. Indeed, given the deregulatory aims of the government, the Content Board will be fundamental to ensuring that quality, diversity, innovation and public service aspirations are still central to British broadcasting. We see it as the guardian of broadcasting's democratic and creative ambition, and it will need substantial power within OFCOM to withstand the natural tendency of consolidation and unfettered competition to move content in the other direction.

  3.ii  We are therefore concerned that the draft Bill only requires that the Content Board should have a "significant influence" on the main body. Since the Board will effectively be the defender of public service values within the commercial terrestrial sector and will embody the guiding principles of the current ITC, we would like to see a more directional relationship. There should be an unambiguous expectation that Content Board decisions are accepted and implemented unless the main board has exceptional reasons for overriding them.

  3.iii  We also welcome the separation of responsibilities between the Content Board and Consumer Panel, and do not wish to see the Panel given an advisory role on content issues. The Panel will be customer focussed and will have an important and independent role to play on service delivery issues such as pricing, access, and fair competition. The more inchoate area of content regulation requires a different expertise and perspective, which lies outside the natural purview of consumer protection bodies.

4.  PUBLIC SERVICE BROADCASTING

  4.i  We welcome the government's recognition of PSB's "profound importance for our democracy and cultural identity", but are concerned that this might be construed as an unduly paternalistic definition. We are therefore pleased that a more specific Public Service Broadcasting Remit has been spelt out by the government, against which the performance of all public service broadcasters can be measured.

  4.ii  We are concerned, however, that the "specific requirements" laid down for each channel are too vague and leave too much room for highly profitable and well resourced broadcasters to reduce their commitment to more expensive programming. In particular, we believe that the only obligation on channel 5 to produce "a range of high quality and diverse programming" is too light for a free-to-air channel with access to 80 per cent of the population.

  4.iii  We would therefore like to see OFCOM placed under an obligation to increase the investment and diversity obligations of all commercial channels to ensure that their production of original content is consistent with their changing revenues. The notion of inward investment only makes sense if the multinational corporations being invited to the British table are obliged to invest significantly in original production above the EU 50 per cent quota and above the 65 per cent (ITV) or 55 per cent (Channel 5) quotas currently laid down by the ITC. This may require statutory guidance to ensure that the interests of viewers and listeners are put before commercial interests.

5.  OFCOM AND THE BBC

  5.i  We believe the government is right to maintain the BBC's history of independence rather than subject it to OFCOM's governance in respect of tier 3 obligations. The BBC has always occupied a unique space between the market and the state, and its survival as a healthy and vibrant organisation at the heart of British cultural life is attributable to its freedom to manoeuvre with minimum interference either from government or from commercial competitors—while being mindful of the influence of both. We believe the government's position is correct for three reasons.

  5.ii  First, as competition in broadcasting intensifies, a reduction in the BBC's share of viewing and listening offers an easy route for commercial operators to increase their revenue. Given the duty on OFCOM to encourage competition and to safeguard the interests of its licensees as well as the public interest, it will face inexorable pressure to force the BBC to withdraw from areas in which the BBC competes with commercial broadcasters. It would also become difficult for OFCOM to resist interfering with strategic BBC decisions—such as moving the peak-time news—which have potentially negative repercussions for commercial rivals. This concept of "regulatory capture" is well established in other industries.

  5.iii  Second, in the interests of pluralism, it cannot be right to subject the whole of British broadcasting to the oversight of one group of government-appointed individuals (who as it is will wield extraordinary power over our communications industry). Given the choice between one body or two charged with defining and looking after the public interest, democracy is surely better served by having two.

  5.iv  Third, as a body funded by a compulsory levy set by Parliament, it is constitutionally right that the BBC should be accountable to Parliament rather than a regulator established to oversee the commercial sector. Concerns about whether BBC governors are sufficiently independent of BBC management are currently being addressed by the BBC itself. If Parliament remains unhappy about these arrangements, it should seek to make changes itself rather than impose on the BBC a regime, which will inevitably seek to reduce its activities.

  5.v  Some have argued that being regulated by OFCOM will afford the BBC protection from government interference, especially in the light of recent government decisions about new BBC digital services. This misunderstands the nature and history of government influence over the BBC. By virtue of its public funding and the government appointment of BBC governors, there has always been some government pressure, which the BBC has been obliged to accommodate or resist. Government decisions on new services (as with the allocation of BBC2 in the 1960s) are not new, are rightfully exercised by government, and will not be required again for many years. This argument therefore has no force.

  5.vi  The government has asked for views on whether fines should be levied on the BBC by OFCOM as on commercial broadcasters. We regard it as counter-productive—and frankly a bizarre idea—that licence payers' money should be spent on fines rather than programmes. If Parliament believes that the BBC has not been fulfilling the terms of its agreement without good reason, it should be able to enforce fulfilment by warning and if necessary replacing the governors.

6.  SAFEGUARDING NEWS AND CURRENT AFFAIRS

  6.i  We welcome the importance placed on news and current affairs in the Bill. We further welcome retention of the nominated news provider system for ITV and the continued restriction on ownership of ITV's news provider by a single corporation. Particularly important is the new duty on OFCOM to ensure that the news provider has "adequate financial support" to perform its task. We believe these measures will help to preserve the editorial integrity of ITN (or any successor) and ensure a well-resourced and high quality competitor to the BBC.

  6.ii  No similar restrictions apply to Channel 5, except a new power for the Secretary of State to introduce a nominated provider system when Channel 5 "has gained a significant share of the free-to-air TV audience". This is vague and arbitrary, and leaves what might be a very delicate political decision in the hands of government (if, for example, Channel 5 is owned by a newspaper proprietor who might be expected to object vehemently—through his newspapers —to any order to drop his own news channel). We see no reason why the nominated news provider system should not be imposed on Channel 5 whatever its share. At the very least, the discretion to order a change of news providers for Channel 5 should be in the hands of OFCOM and not the Secretary of State.

  6.iii  We are concerned that there appears to be no provision in the Bill for a "sufficiency" of news in commercial services. At the moment, OFCOM will have the power to ensure that there are frequent bulletins and some in peak-time, but no power to ensure that adequate time is allocated in peak-time to what might become a less profitable area of programming. We strongly urge that such a requirement be instated.

June 2002


 
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