Memorandum submitted by the Satellite
and Cable Broadcasters' Group
This submission is a distillation of the views
of the members of the Satellite and Cable Broadcasters' Group
named in the Annex. While this paper represents a broad consensus
about most issues, individual companies may have expanded on certain
points in their own supplementary submissions.
1.1 The Satellite and Cable Broadcasters'
Group (SCBG) comprises the major satellite and cable broadcasters
licensed in the UK by the ITC, and currently represents more than
100 channels. It acts as a forum for members to discuss issues
of a legislative, regulatory and public affairs nature. Our members
together broadcast hundreds of thousands of hours of programming
each year, employ tens of thousands of people throughout Europe,
and invest hundreds of millions in the British audio-visual industries.
SCBG members have long been at the cutting edge of innovative
new services in the UK, continually pushing the development of
the range of new media, interactive and digital offerings for
1.2 Our members are major stakeholders in
digital broadcasting who have driven the take-up of digital services
and are principal contributors to the new broadcasting landscape.
When Government and Parliament consider the legislative and regulatory
framework the focus should not just be on the traditional terrestrial
broadcasters but on the need to promote a diverse and distinctive
range of service providers.
1.3 Many of our member companies broadcast
not only to domestic audiences but to continental Europe and beyond.
They are significant international businesses that have established
themselves here to benefit from the UK's regulatory environment
and the skills base of the UK audiovisual industry.
1.4 The Government states "it is essential
that the UK reinforces its position as one of the most attractive
places for communications companies to do business [Introduction
to policy paper]". If this objective is to be met then this
Bill and OFCOM must ensure that the promised light-touch, deregulatory
approach is delivered and that our industry is allowed to prosper
2.1 The SCBG welcomes the establishment
of OFCOM as the replacement to the current regulators and the
general duties of OFCOM as set out in the Bill.
2.2 In the "General duties of OFCOM"
we believe that an additional duty should be for the regulator
to secure, as far as practicable, that the regulatory framework
encourages the development and growth of communications industries.
This is more than a matter of promoting competition, it is a recognition
that the UK is home to a great number of successful businesses
who have benefited from the Government's encouragement of new
services. We believe this best achieved through the lightest touch/co-regulatory
2.3 We welcome the commitment to a more
light touch and co-regulatory approach that recognises that mature
businesses must be able to operate free from onerous day-to-day
interventions from regulatory authorities. However, we are concerned
that some aspects of OFCOM's functions, for example in relation
to employment or media literacy, could easily become onerous obligations
on license holders.
2.4We would wish to see OFCOM explicitly recognise
that it intends, where possible under EU law, to progressively
withdraw from regulation where this is judged to be outmoded or
inappropriate. We welcome the duty to secure light touch regulation.
Our view is that a light touch co-regulatory approach will require,
in the future, more effective co-operation and consultation between
OFCOM and industry to jointly identify inappropriate or unjustified
2.5 We are concerned that because of its
size and complexity OFCOM may quickly become a slow-moving and
unwieldy body. We believe that as part of its requirement to be
deregulatory and to progressively withdraw from regulation, its
licensing and funding mechanisms should be developed in such a
way that they consistently drive down the costs of regulation.
2.6 We understand the Government's objective
in establishing a consumer panel and its role in providing a consumer
viewpoint to OFCOM. Our concern is the underlying assumption that
the consumer voice is currently unheard or misunderstood while
the industry viewpoint often prevails. It is often the case that
regulators do not fully recognise the economic consequences of
regulation and therefore OFCOM will need as much dialogue with
industry as with consumers. This may require the establishment
of formal industry advisory bodies or other mechanisms to review
OFCOM's regulatory proposals with a view to assessing the potential
for unintended effects. Equally we believe that the consumer panel
would benefit from understanding industry's concerns before it
makes its views known to OFCOM.
2.7 It is our strongly held view that the
regulation of the BBCincluding determining whether it is
achieving its public service objectivesshould fall within
the remit of OFCOM. It seems to us anomalous, particularly in
matters relating to competition, product placement and undue prominence,
and programme standards that the dominant player in the UK media
market should in any way fall outside the remit of OFCOM. It is
not adequate to argue that "backstop" powers lie with
the Secretary of State and Parliament through Charter renewal
when these powers can in reality only be exercised every ten years.
The role of the Governors of the BBC should be refocused to deal
with internal management and value for money rather than on regulatory
2.8 We welcome the commitment for OFCOM
to be open and transparent in its dealings with the public and
industry. Within the usual constraints relating to commercial
confidentiality OFCOM board papers, minutes and even meetings
should be open to the public. This would parallel the successful
approach taken by the Food Standards Agency in holding all its
meetings in public. This degree of transparency should also be
applied to the Content Board, the Consumer Panel and the BBC Governors.
2.9 It will be important for OFCOM to establish
effective working relationships with other non-statutory regulators
such as ICSTIS and the ASA. We remain concerned that in some areas
such as the use of premium rate telephony there will continue
to be parallel codes operating between OFCOM and others. OFCOM
will not be judged to be effective if in some areas "double
jeopardy" continues to operate.
2.10 While we welcome the proposal that
OFCOM should have a duty to promote media literacy we do not think
that Clause 10 of the draft Bill is designed to achieve that end.
Our reading of this section is that OFCOM is being given significant
new powers to develop rating and filtering technologies the introduction
of which could ultimately have substantial costs to broadcasters.
While it is important that consumers are informed about such technologies
no formal powers for their introduction should be put in place
without significant further debate.
3. ACCESS ISSUES
3.1 We are concerned that the current privileges
and proposed extension of the privileges granted through must
carry, must offer and due prominence continue to distort an effective
3.2 When these issues were last debated
by Parliament, multi-channel television was still in its relative
infancy and the argument was accepted by many that the public
service channels could lose out to new entrants. Experience has
shown that this was not the case and that existing channelsand
in particular the BBCcan more than hold their own.
3.3 Before any additional privileges are
granted to the public service broadcasterswho have consistently
argued that they require "top billing"there is
a need to re-examine whether there is any need either for the
must carry or due prominence rules.
3.4 We firmly believe that access should
be offered on the accepted principles of Fair, Reasonable and
Non-Discriminatory Basis. We support the view of OFTEL in its
recent publication on the pricing of conditional access and related
issues that there are no special reasons why public service broadcasters
should be treated differently to any other broadcasters. We see
no reason why if public service broadcasters move into established
areas such as children's broadcasting that their new channels
should have prominence over existing channels that have invested
considerable effort and resources into establishing their position
in the market.
3.5 This issue is particularly important
in those circumstances where new public service channels are offered
free of charge to platforms and as a result the services offered
by commercial providers are "demoted" or removed from
the channel line up because of their financial cost to the platform
4. SPECTRUM MANAGEMENT
4.1 We are very concerned at the implications
of the introduction of "Recognised Spectrum Access"
(RSA) which will be an additional layer of licensing, an additional
tax and an additional regulatory burden on broadcasters.
4.2 Satellite broadcasting is among the
most economically efficient use of spectrum and there is no evidence
to suggest that a charging regime is likely to lead to any efficiency
4.3 It is important to recognise that the
spectrum used by satellite broadcasters in the UK is allocated
under international agreements administered by the International
Telecommunications Union (ITU) and are not within the control
of the Radiocommunications Agency. It is therefore difficult to
understand how OFCOM will be expected to operate the RSA system
and it is by no means clear who will be expected to pay for spectrum
4.4 The argument that RSA would provide
enhanced security for satellite operators by protecting their
spectrum space would not appear to apply to direct-to-home satellite
broadcasting and broadcast to cable head-ends for subsequent distribution
to cable networks. SCBG members have operated for many years with
no significant interference problems and we do not anticipate
any such problems in the future.
4.5 We are also concerned that this could
encourage similar regimes to be introduced across the European
Union. The EU Television Without Frontiers Directive allows UK
based companies to broadcast without constraint across the European
Union. The introduction of RSA regimes in other countries might
be used as a method of preventing such broadcasts or pricing companies
out of the market. The implications of this for those of our members
broadcasting across several territories are as far reaching as
they are unwelcome.
5. ACCESS FOR
5.1 Satellite and cable broadcasters, unlike
the traditional public service broadcasters, receive no public
subsidy either in the form of licence fee income or access to
scarce terrestrial spectrum. However, this has not prevented satellite
and cable channels from voluntarily providing access services
across many channels.
5.2 We believe that the best approach to
this issue is for the current voluntary arrangements to continue.
If the Government wishes to accelerate the growth in this provision
it would be appropriate for these new public service obligations
to be given financial support.
5.3 We believe that in drawing up the code
relating to provision for the deaf and visually impaired OFCOM
must have regard to the particular characteristics of the satellite
and cable sector.
5.4 The sector has made huge investments
in the development of digital television; in many cases with low
levels of return or even liquidation. With the advent of digital
television and the growth in the number of channels many companies
have found audience shares and revenues decreasing leaving little
scope for additional expenditure on services.
5.5 We would be very concerned if OFCOM
were to introduce new requirements without regard to the ability
of all broadcasters to meet these obligations.
5.6 The Explanatory Notes on the Bill and
the Regulatory Impact Assessment both refer to OFCOM having regard
to "the likely benefit" and the "cost and difficulty"
of providing subtitling, sign language and audio description.
However, the Bill itself does not contain any criteria for exemptions
beyond stating that in drawing up the code OFCOM should consider
what programmes should be included. We strongly believe that the
Bill should include the ability to exempt whole channels.
5.7 Furthermore, we believe that the code
should include provision for channels to make applications for
exemptions from these requirements. The code should also include
a defined transparent process by which exemptions will be considered
including a clear list of the factors that will be taken into
5.8 With regard to the "cost and difficulty"
criteria it is important that OFCOM is given the flexibility to
deal with technological difficulties. A lesson should be learned
from Digital Terrestrial Television where requirements to broadcast
audio description were met by broadcasters, at considerable expense,
despite the lack of suitable receivers for the visually impaired.
5.9 We believe that the Regulatory Impact
Assessment underestimates the number of channels that would be
affected by these requirements. The RIA estimates that satellite
and cable will broadcast approximately 325,000 hours next year.
This equates to only 37 24-hour channels while we know that the
ITC licences nearly 400 services.
5.10 We can only assume that the Government
intends that no international channelsie those broadcasting
from the UK but aimed mostly at overseas audiencesare to
be included in the requirements. We believe that this should be
made explicit in the Bill.
6.1 We have already stated our belief that
it will be important for OFCOM and, in particular, the Content
Board to be light touch and deregulatory in its approach. We welcome
the tiering approach and the commitment to the introduction of
a degree of co-regulation, which is explicit in the policy paper
but unfortunately not reflected in the Bill itself.
6.2 We are concerned that the draft Bill
continues to prescribe detailed regulation above that required
under EU broadcasting law and that OFCOM's discretion and ability
to withdraw from regulation will be fettered from the outset.
6.3 OFCOM will inherit the existing Codes
of the BSC and the ITC. Until those Codes are reviewed and revised
the situation of double jeopardy will continue to operate. This
issue could be partially resolved through an explicit commitment
in the Bill that OFCOM will introduce its new Standards Code within
a set period of time.
6.4 We remain concerned that OFCOM retains
the role of "judge, jury and executioner" in all aspects
of content regulation. There is, as yet, no indication of how
an independent appeal mechanism will operate. It is essential
that regulated industries have access to an impartial independent
appeals process, particularly where penalties can reach up to
5 per cent of qualifying revenues.
6.5 We do not believe that it is appropriate
for OFCOM to have prescriptive powers in relation to equal opportunities
or training. All companies already have duties in relation to
equality, which are laid down in employment legislation. There
appears to be no justification for the communications industry
to be treated any differently from any other sector of the economy.
Likewise we see no justification for OFCOM to have powers to prescribe
levels of training in any industry. These requirements are contrary
to OFCOM's "duty to secure light touch regulation."
6.6 We have already stated our view that
the regulation of the BBC should fall within the remit of OFCOM.
We strongly believe that this should include fairness and privacy
matters and the approval of new services.
6.7 We have been concerned that public service
broadcasters with specific remits to provide distinctive services
are continuing to move into markets occupied by commercial broadcasters.
We welcome the requirement that OFCOM will need to be satisfied
that new ventures by Channel 4 must not jeopardise its core statutory
purpose and must operate at arm's length. We believe that where
any broadcaster is granted privileged access to the airwaves in
return for public service obligations then it must be ensured
that their associated operations are not allowed to distort the
7.1 We do not wish to make any detailed
comments on the ownership aspects of the Bill but we welcome the
Government's explicit recognition that the UK has an important
global role in the communications industry and that international
companies and investment have an important role to play in its
8.1 The approach set out in the Draft Communications
Bill promises significant improvements in the regulatory structure
and environment for broadcasting in the United Kingdom. However,
there are a number of areas in the draft legislation in which
the Government has failed to "let go" of its control
over the industry. We continue to be more closely regulated than
many other sectors of the economy and we believe that even more
should be done to reduce regulatory burdens and to allow the communications
industry to flourish to the benefit of everyone: consumers, industry
The Chinese Channel
Discovery Networks Europe
MTV Networks Europe
National Geographic Channel
Paramount Comedy Channel
Sci-Fi Channel Europe
The Travel Channel
Turner Broadcasting System Europe