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


APPENDIX 9

Memorandum submitted by the Campaign for Quality Television Ltd

  The Campaign for Quality Television was set up in 1988 to express the concern of programme makers about the then proposed de-regularisation of television. Over the next two years it played an important role in ameliorating some of the worst excesses of the 1990 Broadcasting Act. Its efforts are widely credited with having led to both the quality threshold and exceptional circumstances clauses in the Act. These allowed the Independent Television Commission to draft licences setting higher standards than would otherwise have been imposed. After the passage of the Act, it was decided to rest the Campaign, to avoid the risk of exhaustion. In 1995, with so many important developments taking place in British broadcasting, it was decided to relaunch the Campaign. In 1998 it published two reports Serious Documentaries on ITV, and The Purposes of Broadcasting, and in 1999 published A Shrinking Iceberg Slowly Travelling South research which looked at the changing pressures of broadcasting and the impact on programmes.

  The Campaign's aims are to:

    —  promote public service television, choice and quality for all viewers in the United Kingdom. Recent developments in television have been driven by a narrowly financial agenda and the role it plays in informing and educating people from all sectors of society is being largely ignored

    —  ensure that efforts are made in an era of rapid technical advance, to match the new breadth of choice with a true breadth of quality

    —  ensure that public service television is adequately funded

    —  persuade legislators towards policies which are creative and imaginative and which treat the viewers as partners in the enterprise of television rather than sources of revenue

    —  promote public debate about television.

THE DRAFT COMMUNICATIONS BILL AND PUBLIC SERVICE BROADCASTING

  The new draft Communications Bill stresses the promotion of public service broadcasting in a bid to maintain the distinction and diversity of British broadcasting in the twenty-first Century but it is not carried through in concrete proposals.

  The Bill contains powerful contradictions which will frustrate public service broadcasting, unless amended. The Bill has all the appearances of reflecting the demands of the most powerful, conflicting lobbying groups—saying yes to each of the loudest voices, a position which is unlikely to give the public a better quality broadcasting service in the future.

Example one

  Key policies outlined in the Bill, particularly PSB, are dependent on the effectiveness of the proposed new single regulator for enforcement. Yet the largest broadcaster is largely exempt from the scrutiny of the regulator. This reflects giving way to pressure from the BBC, makes a nonsense of a single regulator. Most recent concerns about the BBC relate to the exploitation of its monopoly position and its tendency to use licence funds for commercial ends, drifting away from PSB. The new regulator will be in a weak position to counter this and will have little standing with other broadcasters when they see the BBC continuing weak outdated in house regulation.

Example two

  The Bill endorses the formation of one ITV based in London, and intends to encourage global ambition, and the amalgamation of the London advertising market. This reflects giving way to pressure from ITV. There is no recognition of the effect on the nations and regions, a crucial aspect of PSB. This is the creation of another monopoly and the exchanging of a regional structure based in and serving the regions, for a metropolitan one, which has a purely commercial purpose and is bound to further diminish this PSB aspect of ITV. It may be argued that one ITV is essential for other reasons but that should lead to the proposal of alternative policies for the broadcasting of regional programmes and the production of network programmes from the regions. These are conspicuously absent. Today there are 10 national channels—all in and reflecting London.

Example three

  The Bill's reassessment of PSB has done nothing to improve the existing position and nothing to address the controversial issue of fair competition surrounding PSB. The Bill simply assumes that the five existing main terrestrial broadcasters will continue to have varying degrees of public service commitment underlining the status quo. There is no recognition of a changing broadcasting ecology; no recognition that broadcasters with little or no PSB commitments have and do trade unfairly against those which have a more distinct remit. Channel Five, for example, which has the lightest PSB requirements has been able to run pornography, sport and old films against the PSB slots on C4 and ITV to great commercial advantage. Similarly Sky, which has no PSB has been able to do the same thing against the BBC and ITV. This causes the main terrestrials to seek to evade or dilute their PSB position (which is quite easy)—hence the upsurge of explicit sex on C4. This raises a dilemma. Should there be less PSB on the commercial channels in order that they compete more fairly against C5 and Sky. But this would not only reduce PSB but crucially drive the BBC downmarket. Alternatively should some measure of PSB should be introduced for Sky and C5, now that they are very profitable, to even the playing field. The Bill's proposal to sit in the middle with its hands over its eyes is no solution but does reflect successful lobbying from C5 and Sky.

Example four

  The Bill proposes to relax ownership rules substantially though not completely. While this may be thought good for investment (and again reflects lobbying from Sky) it contains remarkable anomalies and nothing for PSB. Looked at in context it will be the fourth successive relaxation in ownership rules in little over a decade and it isn't easy to discern great benefits for the viewer. New monopolies have been created, ITV has been dismembered and retreated to London, Sky is being given greater access to ownership of the British Media without its parent company paying any taxes. But the ownership question is a disturbing one-way street. American companies such as News International will be able to buy C5 but British companies cannot buy American broadcasters. European broadcasters will be able to buy ITV but it is exceptionally difficult to buy the principal French or German broadcasters. This and much else in the draft Bill reflects the strength and thinking of the Department of Trade; the weakness and lack of experience of the Department for Culture Media and Sport.

IMPORTANT ELEMENTS MISSING FROM THE BILL

Example one

  Other significant things which might do much for competition and for range and diversity of content are missing from the Bill. There is no recognition that in the consolidation of the new monopolies in television there has been a collapse in the diversity of access points for commissioning in broadcasting. There has been much anxiety about a reduction in range and diversity of output but no recognition that if the points of input are narrowed this will be the result. Fifteen years ago there were dozens of commissioning points, many of them outside London. It led to a rich plurality and a much greater diversity and breadth of achievement than is seen today. Now there are in reality only a handful of commissioners, all in London. Even senior "commissioning" executives must get the personal approval of their controller for almost any commission, an approval which is usually dictated by the scheduler searching for ratings. This is one of the most significant threats to PSB and the answer may be to give the new regulator clear instructions to further plurality of access. OFCOM's central objectives might include the job of "monitoring, maintaining and increasing" the number of independent commissioning points across the full range of output of the five main terrestrial channels.

  It is worth noting that the BBC created an effective Independent Commissioning Group. This proved very successful and independents won a substantial proportion of BBC output and provided many of the Corporation's winning programmes when allowed to compete with in house staff on equal terms. Despite that, the new Director General chose, in order to favour in-house staff, to dismantle this effective new commissioning point in what can only be described as a move to protectionism.

Example two

  Secondly parts of broadcasting, notably ITV, (and potentially Channel Four and Channel 5) were periodically refreshed by a review of the franchises. This helped maintain public service standards, removed poor performers and brought in new blood. Another failing of the 1990 Broadcasting Act, reinforced by this proposed Bill, has been the granting of franchises virtually in perpetuity. They were granted in 1992 for 20 years (rather than five to seven) with a review point at 10 years. In practice they are very difficult to lose, almost impossible to win with the obvious consequences.

Example three

  Commercial public service broadcasters need, if they are to meet proper public service demands, reasonably stable and secure income (it being, of course, the fear of losing such income which makes franchise renewal such a potent weapon). There is not only no recognition of this in the Bill, but there an emphasis on increasing (often unfair) competition in an already cut-throat industry. In other words the Bill pushes in the opposite direction—commercial broadcasters will be obliged to put even more emphasis on maximising ratings and profits at the expense of PSB—if they are to protect themselves against hostile takeovers.

Example four

  The proposal of a Content Board within OFCOM is a positive aspect of the Bill but it currently lacks a clear definition and role. We would support the proposals of PUBLIC VOICE (of which the Campaign is a part) and draw particular attention to clauses 7.8, 7.10 and 7.13 of their paper relating to the Board.

BACKGROUND

  The relative weakness of PSB in the draft Bill owes much to its recent history. The real assault on it began in the 1980s led by Margaret Thatcher and Rupert Murdoch. Although Mrs. Thatcher failed in her bid to secure advertising on the BBC, her subsequent legislation, the 1990 Broadcasting Act severely weakened the public service role of ITV, which in turn made it harder to sustain on the BBC. Murdoch made his position clear in his 1989 Edinburgh Lecture in which he envisaged a role for the BBC similar to PBS in the United States (about seven per cent of the market) and he unashamedly used his newspapers to further a partisan campaign designed to enhance his commercial interests in broadcasting.

  This drive against PSB continued long after Mrs. Thatcher left office, eg the franchise for C5 was awarded in the mid-1990s on the same basis as the ITV franchises although the system was widely discredited, a fact acknowledged by Mrs. Thatcher herself. It was only with a change of Government in 1997 with Chris Smith as Secretary of State at the DCMS that a more balanced view was taken. He began to steady PSB after it had been undermined for more than a decade.

  Smith encouraged a clearer PSB mandate for Channel Four and leant against the BBC's drift down the commercial road but that is as far as it went. As the prospect of new legislation grew closer the attacks renewed, usually self-serving. Richard Eyre, chief executive of ITV pronounced PSB "dead"; the Conservatives promised to privatise Channel Four (which would effectively end its PSB role) and perhaps most astonishing, Michael Jackson, chief executive of C4 attacked PSB as "drained of all purpose and meaning" and "a redundant piece of voodoo". The fact that Jackson had spent all C4's money, left it in debt and off-course, and was leaving for a new career in America, may have affected his judgement. But the more serious inference was that he simply did not, despite years at the BBC, understand PSB. Remarkably no senior figure from broadcasting or government effectively countered Jackson.

  In the period leading up to the present draft Bill there have been constant calls to produce a new updated definition of PSB. The drafters have done their best, but they appear to have gone round in a circle.

  The new version (Annex B) contains many, though not all, of the original principles of PSB and the general aspirations expressed are very similar. There is a reason for the difficulty. There was no need to redefine PSB, merely a need to defend it. It is after all, contrary to what Michael Jackson asserts, a timeless concept, which a society has or doesn't have in greater or lesser degree. It is based on eight principles, which distinguish it from a purely commercial system or from a state system of broadcasting.

  It is notable that the draft Bill's version, while wide ranging, fails to reflect three important principles critical to PSB

  1.  That a PSB system recognises citizens, not merely consumers, and that they have responsibilities as well as rights.

  2.  That the system seeks to cater for substantial minorities as well as majorities in the television audience.

  3.  That the system should be independent, particularly of political and commercial interests.

  The Campaign for Quality Television would argue that PSB has been substantially weakened in Britain in the past 15 years and that this draft Bill, as it stands, will continue that trend. It contains specific proposals designed to enhance commercial interests and generally a lack of proposals designed to enhance the principles of PSB, only sentiments. But it need not be so. It is perfectly possible to tangibly improve PSB, as Chris Smith demonstrated with the re-writing of Channel Four's remit. .

  But it will require specific proposals to reconcile the above contradictions and include the above exclusions if the Bill is to achieve what it claims to aspire to.

June 2002

Annex

THE DRAFT COMMUNICATIONS BILL AND THE NATIONS AND REGIONS

Introduction

  Two thirds of the population of Britain live in the English regions—more than forty million tax and licence payers.

  But these people have been shamefully neglected by broadcasters for the last ten years. And despite brave words from the Government, the new broadcasting Bill will do nothing to remedy that situation. On the contrary it is very likely to increase media concentration in, and on London.

  Before the 1990 Broadcasting Act the principal commitment to fairly reporting and reflecting the rest of Britain came from ITV which had companies with headquarters in their respective regions. The BBC made a contribution but it was always a poor second with 80 per cent of its spend in London and a very limited range of regional production. Channel Four made no regional programmes and a limited number of network programmes from the regions. Generally broadcasting institutions were heavily concentrated in London.

  Since the 1990 Act the position has greatly changed and to the detriment of the regions. Much of this is because of the effect of the Act on ITV. It took a great deal of programme money out of the system, encouraged the companies to eat each other and witnessed a general retreat to London.

  Typical is Granada Television, once a beacon in the North of England. Granada brought the north of England alive on its screens, brought a non-metropolitan perspective to the news; a more non-conformist approach to current affairs and drama; and it tapped the vast writing, comic and entertainment talent of the north. All this created new cultural industries and helped reflect what the north could produce to a wider world.

The position today

  Today Granada controls seven ITV franchises, but all now from London. Its commitment to and presence in Newcastle, Leeds, Carlisle, Liverpool, Manchester, Southampton and Norwich is a shadow of what existed in the mid-1980s. On the ground the production of regional programmes are commonly made with budgets that are a quarter of those more than a decade ago.

  There has been some compensation in an improvement in the BBC and C4's commitment to the regions. But it is quite limited. In 1993 the BBC recognised that it could not continue to take a licence fee, 80 per cent of which came from outside London and spend 80 per cent of it in London. The BBC resolved to increase its regional spend to 33 per cent. Nearly a decade later the percentage spend has risen but not to the one third claimed by the BBC. Unfortunately their figures have consistently included tranches of programmes still made in or from London and even programmes made in the Irish Republic.

  Channel Four too, with a rewritten licence, committed itself to 30 per cent of its production from outside the M25 by 2002. It is unclear whether the target is being met given that again the figures included a proportion of programmes made in London, but not as pronounced as the BBC. Again Channel Four takes a very high proportion of its revenue from the regions and has most of its viewers there but the culture of its programmes remains rooted in a SW1 mentality.

  In 1996 there was an opportunity to break the mould and set up a new channel—Channel Five—outside of London but again the broadcasting establishment took the easy route. Channel Five has had little affinity (and no licence commitment) to the regions. It aspires to a mere 10 per cent of production from outside London. During the late 80s and 90s various new broadcasters arrived, Sky, Discovery, A&E—all are based in London.

  All this is significant not only because of the obvious economic and employment benefits of a broadcasting presence. The production of regional programmes and of network programmes from the regions permits other critical things that conventional industries do not provide. Television provides the majority of news and information; television educates; it promotes democracy and provides some of the cement that binds society together. It is not just an economic activity.

  As television has drifted more to the metropolis in what is already the most centralised state in Western Europe, the people in the English regions have felt penalised. It isn't merely that job opportunities are lost and skilled personnel drift away but whole regions are under-reported both to themselves and to the wider world; they feel under-represented politically; unreflected culturally compared with what was true before the 1990 Act.

The proposed new legislation

  Now, with the imminence of new broadcasting legislation the position is changing again—and again further to the disadvantage of the regions. The new draft Communications Bill is committed to one ITV company, the end of the federal system and the amalgamation of the London advertising market. A government spokesperson has said that this will not affect ITV's commitments to the regions. Unfortunately that is simply not true.

  The ITV federal structure was created on a regional basis to fulfil commitments in and from the regions. The new ITV will be based in London with a global ambition. While it is possible that a super ITV company may compete in New York, Sydney and Hong Kong it is just silly of the Government to believe that the same company will devote the same money and good people to fulfil the regional role for which it is no longer designed and for which it has no commercial imperative. Not much energy will be spent in Newcastle, Nottingham or Liverpool.

  Nor is there any encouragement in the new "regional charter" agreed this month between ITV and the ITC. It permits a reduction in the range of regional programmes and a substantial reduction in hours in exchange for an increase in spend on the remaining programmes that is less than current spend—in effect a large cut in volume and a small cut in value. The charter also states that ITV will have a target of network production from the regions, which is substantially below what it currently produces.

  It seems equally unrealistic to imagine that the BBC or C4 could fill the vacuum. Channel Four has already indicated that it cannot do better than 30 per cent for the next few years. The BBC after a decade of effort, has never truly met its target in network programmes from the regions and still produces less than half of ITV's output in regional programmes.

  Once ITV becomes a single metropolitan company with a global outlook it seems inevitable that the network of regional stations will be rationalised. Politicians may argue that licence commitments do not permit this. But this is another misunderstanding.

  The whole purpose of the merger is to take out costs (£65 million has been mentioned for starters)—and there are no licence commitments to keep the large regional centres that previously made network programmes; only facilities for a minimum of regional programmes.

  In other words Granada's Manchester Quay Street site, worth hundreds of millions to developers, could be exchanged for an out of town business shed and still fulfil licence commitments. The fringes of the site have in fact already been sold. In any event licence commitments are periodically renegotiated.

  So how can the new legislation fulfil the support it claims to give to public service broadcasting and to the regions. The politicians' rhetoric is strong but the specifics are vague. A range of options exist though none seem to be being considered.

The distribution of viewers

  First it is important to remember the distribution of viewers. They pay the licence fee; they pay for advertising and they are the customers watching the programmes; they are also the citizens being informed, educated and entertained.

  Less than 10 million live in London which receives an overwhelming proportion of broadcasting spend and attention. 10 million live in Scotland, Wales and Northern Ireland, which while leagues behind London, do have some commitments and do have two minor broadcasters. The 41 neglected millions in the English regions do not have a single broadcaster.

Proposals

  A radical shift in policy is required if the whole nation is to be effectively served. The following non-exclusive list could be considered:

  1.  One or two of the many London broadcasters' channels could be moved to other parts of Britain. The four main terrestrial broadcasters now have some ten channels between them all in inner London. A real impact would be made by basing say BBC-2 in the North. The BBC is supposed to be the pre-eminent public service broadcaster; it has the most channels and yet it remains a heavily metropolitan organisation. The opposition would be ferocious but anything less is really tinkering.

  2.  The two principal public service broadcasters, the BBC and C4 could be required by licence or charter commitments to increase their commitment to the regions but this would need to be a structural change otherwise, as already indicated it will not happen in practice.

  3.  Public service requirements including the regions could be extended to other channels such as C5. That would have the added benefit of ensuring fairer competition and end the situation where C5 and Sky can unfairly take advantage of the other three terrestrial channels because they carry little or no public service requirements.

  4.  A number of small, restricted service licences have developed supplying local services in some regions. But they operate under extremely limited conditions. There are proposals for putting these services on a much stronger footing so that an effective local television network may develop.

  5.  Digital broadcasting presents another possibility. A new channel using either a digital frequency or a section of analogue (after switchover) could be based in a northern city and used for the production of regional programmes and network programmes from the regions. If ITV's regional programmes were transferred to this new channel, ITV would make two great financial gains. It would no longer have the cost of regional production and it would free up lucrative airtime on ITV for profitable network production. In exchange for these gains ITV could help fund, on a tapering basis, a new consortium dedicated to launching the new channel in the regions.

Conclusion

  So much turns on the prevailing climate:

  It is only a few years ago that, for example, ATV that held the Midlands franchise sought to keep the bulk of its production at Teddington, London. Although it had offices in Birmingham in the West Midlands, it greatly neglected the East Midlands. Eventually the IBA forced the company to restructure, to close Teddington and to open in Nottingham on the grounds that if the company wished to make money from the region and to serve its viewers (as it said it did) then they must be there to do it.

  Similarly later Channel Four could have been set up in the regions as could Channel Five. Either would have had a much more distinctive character contributing to broadcasting rather than duplicating the London scene. They were not because most broadcasting people were in London to start with and it was convenient for them. Executive preference mattered far more than either their customers or their markets.

  None of these thoughts, or anything that will deliver for the vast majority of the population who live in the English regions, is reflected in the draft Broadcasting Bill, only policies that are likely to lead to a further consolidation on London, a further repetition of channels and programmes, and a further drift of the audience away from television.


 
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Prepared 5 August 2002