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


APPENDIX 5

Memorandum submitted by the British Internet Publishers' Alliance (BIPA)

  The British Internet Publishers' Alliance represents the interests of commercial Internet publishers who are committed to ensuring a free and competitive Internet environment. BIPA will in due course be submitting written evidence to the Committee concerning issues of fairness and market distortion on the Internet. There are however a number of broader issues of practice and principle, concerning the impact of new BBC services, which may be pertinent to raise with some of your early invited witnesses, most notably the ITC and the OFT.

  With respect to the ITC, on the current question of approval for the new digital BBC3 Channel, the Commission has become involved for the first time in representing the interests of commercial broadcasters, who feel that the BBC's proposals will make heavy inroads into their income. The ITC put together research for Tessa Jowell on the commercial impact, which it assesses at £25 million per annum, against the BBC submission figure of £4 million.

  The wider questions are relevant to the areas of the draft Bill which relate to the application of competition policy to the BBC's broadcasting channels, as well as their Internet services. These include:

  1.  Compared with the requirements of commercial broadcast licences, are the current criteria for approvals for new BBC services sufficiently clear, and adequately open to public examination and comment?

  2.  The ITC has become involved in assisting the DCMS assessment of the market impact of the new BBC digital television channel BBC-3:

    —  does the ITC think that OFCOM might have a similarly useful role in advising the Secretary of State on the broader sector implications of all new BBC services?

    —  given the BBC-3 discussions, is such an involvement now necessary in view of the impact of BBC services on commercial competitors?

  3.  If OFCOM is not to have this input, can increasingly complex judgements of commercial impact be handled effectively by either departmental civil servants or the BBC Governors?

  4.  Should OFCOM have a professional role in monitoring whether or not the BBC meets the remit of particular service approvals? Again, if not OFCOM, have departmental officials or BBC Governors the necessary resources (and in the latter case the manifest impartiality) to fulfil this function?

  5.  Should OFCOM be specifically empowered to apply competition policy to the BBC, or at least to advise the Secretary of State on competition related issues?

  With respect to the Office of Fair Trading (OFT) the core issue is the degree to which it (or after the enactment of the Bill, OFCOM too) has adequate power to ensure that the BBC's Fair Trading Commitments are adequate in themselves, are fully transparent, and are subject to effective scrutiny and (where necessary) appropriate sanctions.

  Where the private sector has referred concerns about unfair competition to the OFT, there appears to have been a reluctance to act. Consequently, the BBC maintains an apparent record of fair play. In our evidence to the Committee we will provide more of the details of this, but in the meantime the key question is whether the structure of self-regulation is sufficient for an increasingly complex market. Key questions include:

  A.  How often have questions concerning the market effect of BBC services been referred to the OFT?

  B.  Does OFT treat issues concerning the BBC in the same manner as those concerning purely commercial organisations?

  C.  The BBC is required to comply with its Royal Charter and Agreement, and to observe its Fair Trading Commitment. Do these in any way replace or reduce the impact of general competition law on the BBC, or the willingness of OFT to apply it?

  D.  New BBC services are approved by the Secretary of State for Media Culture and Sport. Does OFT believe that these approvals are:

    (a)  conducted with proper regard to their impact on fair trading, and

    (b)  sufficiently precise and public in their terms?

  E.  If the special status of the BBC protects it from the full rigours of competition law, does this—should this—apply to all BBC activities of whatever kind and scale, even if not directly related to broadcasting?

  F.  What specific competition powers should OFCOM be able to exercise in these areas?

  G.  DCMS has commissioned an enquiry into BBC News 24 by Richard Lambert. Is such a one-off enquiry a sufficient test of the delivery of the BBC's agreements on this service, and its effect on the market?

May 2002


 
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