Joint Committee on The Draft Communications Bill Minutes of Evidence


Examination of Witnesses (Questions 548 - 559)

THURSDAY 20 JUNE 2002

MR CLIVE JONES AND MR MICK DESMOND

Chairman

  548. I apologise for the delay but I cannot pretend it was unanticipated.

  (Mr Jones) I have never known Greg not overrun!

  549. I will start the questioning as Anne Picking has had to leave the room. The Bill does not specify whether the Content Board will be an executive or advisory body. Would it be fair to say you would prefer it as an advisory body with key regulatory decisions to the main board? This is obviously a follow-on from the questions Anne Picking asked the BBC.
  (Mr Jones) No, Chairman, I do not think so. It would be right and proper for the Content Board to be reasonably self-sufficient and we feel it will be more than capable look after day-to-day decisions on content issues. I think it is vital they have clearly defined roles. There will be a relatively small OFCOM Board and I would have thought it is right and proper that they concentrate on the key strategic issues whereas the Content Board deals with programme detail. I think Greg touched on this, we do not want two regulators, therefore it is vital the Content Board stays in close touch with the main OFCOM Board. I would have thought if there were very big key issues like a change in the remit of a particular channel and a major change in the programming policy of Channel 3 or Channel 4 or Channel 5, I would have thought that would be referred for a final decision to the main OFCOM Board, but if it were a simple programme issue, a Brasseye I would see that being settled by the Content Board, not bogging down the main OFCOM Board. One final point on that, there is also a risk that the Consumer Panel and the Content Board overlap, and again I think there needs to be a very clear definition of roles. I would have thought the Consumer Panel should stick to issues like pricing, access, genuine consumer issues, whereas programme matters, channel policy, programme remits, stay within the Content Board. So clear delineation, co-operation between each, but each having clearly defined roles.

Mr Grogan

  550. On Tier 3 regulation and particularly the obligations on regional programming, in your submission you highlight the fact these have strengthened slightly in terms of statutory regulations though many of the statutory provisions regarding regional programming and regional news and so on are in fact in the licensing agreements anyway. Is this something that you are comfortable with, Tier 3 regarding regional programming? Is it something which you think gives you a premium in the market or is it something which, as some would fear, would loosen and relax in years to come as you consolidate?
  (Mr Desmond) I think broadly we are comfortable. We feel comfortable that you have to protect and maintain public service broadcasting and a clear part of that for us is regionalism and our obligations to the regions and regional output. We have one concern which is specific to Clause 193 in the Bill, that effectively OFCOM will have the power to ensure appropriate investment is undertaken in different parts of the UK. As you are probably well aware, in our recent Charter agreed with the ITC in terms of nations and regions, we are already committed to this, and in fact already produce more than 50 per cent of our network output outside London. We vehemently believe that ITV is very much about ITV regionally broadcasting to the nation as opposed to London broadcasting to the nation, and we are very proud of that, but it very much has to be on a meritocracy basis. There is a huge regional commitment there, in fact we would like to see Channel 4 and potentially Channel 5 get up to the mark as their originating production increases. Turning specifically to regionalism itself, if we have been guilty of anything it is not shouting enough about what we do within the regions. Part of our recent agreement with the ITC is that we have strengthened our regional output. We still transmit over 6,000 hours of regional programming and in many of our regions we transmit more than BBC1 and BBC2 combined on a regional basis. We also transmit 27 different versions of local news within our regions and are committed to further investment to regionalism in peak. I think the key thing is that the Bill provides broadly the right degree of statutory protection and the right degree of flexibility and I think we are happy with that. If we were to leave you with one point it is that our commitment to regionalism is as strong as ever but regional ITV will not be protected by being set in aspic.

  551. One other thing which is not set in aspic according to the Bill we have before us is the ownership provisions and we have already heard a little this morning about various views on relaxation of the ownership restrictions on Channel 5 and Channel 3 and so on. I would invite you to give your views on that and also on the specific proposal about separating pay-per-view rights, subscription rights, to programming from free-to-air terrestrial rights, and whether OFCOM should have a role along those lines. How would you respond?
  (Mr Desmond) We fundamentally agree with Greg's comments. Certainly if ownership were to change, and let's take the scenario where BSkyB could buy Channel 5, it would fundamentally change the ecology of public service broadcasting. Certainly on rights for sport and major movies, where again we agree with Greg, and the whole issue of being able to use the pay channel of what is paid for by rights into the free-to-air environment, you can see a fundamental shift in terms of how that competes against other terrestrial broadcasters, and that is an issue which we would fear. It is right and proper that should be looked at in the forthcoming Bill and be part of that Bill.
  (Mr Jones) Are we happy that ITV companies could be taken over by non-European owners? I think generally we are quite relaxed about it. The important thing about ITV is the duties and obligations placed upon it by the Bill in terms of its regional duties, its commitment to original production, its commitment to regional production outside London, its commitment to news. All those things actually protect ITV and what ITV is all about. Who owns it is neither here nor there. As long as it is well funded and we can continue to fund the programme service, we are relaxed about it. As for the thought that an American owner would come in and ITV would be awash with American programmes, well, it would not be, because what they would do is come in and destroy the business they have just bought. American programmes do not play a major role in the ITV schedule. What plays in ITV is original drama, original entertainment, original documentaries. You will not find on BBC1 or ITV very many American programmes other than films. It is unlikely we would play Friends or ER in peak time because it does not give you big, mass volume audiences, we want 6, 7, 8 million, whereas West Wing only gets a couple of million. That sort of high quality drama is great for Channel 4, great for BBC2, but it is not right for ITV, our viewers want to watch original production.

Paul Farrelly

  552. Clive, what you said about ownership does not surprise me because throughout the evidence we have received we have tended to find those companies which are commercially owned tended to be very relaxed about, shall we say, if not downright agreeing with, relaxation of ownership rules because it would on one view allow the owners to realise their investments, such as that of Channel 5. Channel 4, on the other hand, has made an extensive submission on the potential effect on production and other aspects of the UK television economy of unlimited foreign ownership. Can I ask the question in a slightly different way. What evidence is there that particularly US or Canadian or Australian ownership of Channel 3 or Channel 5 would, and I quote the Secretary of State, encourage innovation, allow the UK to benefit rapidly from the ideas of technological developments, or indeed help to give our industry the edge? What evidence is there for those statements?
  (Mr Jones) You should really ask the Secretary of State rather than me but I would say a number of things. We are dealing, as I said, with a hypothetical situation here. We have been able to be taken over since 1992 by European broadcasters and nobody has done it yet and there is no indication that TF1 or anybody else is interested in buying ITV. There has been major consolidation in ITV and it is now dominated by our two companies. Has that changed the basic nature of ITV or changed our regional commitments? Has it meant any of our 27 regional news services having been closed down? Has it meant we have cut back on regionalism? Has it meant that Coronation Street has moved from Manchester to just outside Sevenoaks, or Emmerdale has moved to Scotland, or Taggart or Rebus have ceased to be made in Glasgow? No, it has not, because it is down to the licences and it is down to the regulator to ensure we stick to our licences. Would American ownership re-invigorate ITV? It could. America is one of the most vibrant and creative film and television environments in the world, they do make very good television programmes and very good movies, there is a host of creative talent there and they are willing to invest in creativity, but there is no guarantee one way or the other that they could come in and improve ITV or improve Channel 5. The real protection for viewers, the real protection for the Government, is I think in the licences and in the provisions of the Bill to define the service. If that is done properly, whoever owns the companies or whoever owns one single ITV, the nature of the service would be underpinned by the Bill and by the history.

  553. In summary, would you both agree there is actually no evidence therefore that we would have a more innovative and better television industry in this country were that to happen?
  (Mr Desmond) I would endorse what Clive has said, I do not think there would be. ITV already competes against the best of American programming which is screened on Channel 4, Channel 5 and satellite, and we know what drives our audience performance, which is strong originated drama, strong originated entertainment and factual programmes, and we also know that derives the revenue which we take from the market place. I think anybody coming in and fundamentally changing that shape and mix of programming would have a huge financial horror show. I really support what Clive has said.
  (Mr Jones) Would we welcome the creative brains behind 24 or West Wing or Friends or ER helping us to make better programmes for ITV? Too damn right we would.

  554. You do not need to be taken over by them?
  (Mr Jones) I do not know, it might help to pay them a great deal of money.

Chairman

  555. Are you suggesting then, as I think you are, that the underlying rationale which the Secretary of State offers for the Bill is an interesting assertion rather than any form of clear fact?
  (Mr Jones) Yes, because it cannot be proven. It cannot be proven in the present environment so, yes, it has to be an assertion.

Nick Harvey

  556. You argue that OFCOM should have no locus in scheduling matters, which are best left to the judgment of the broadcaster. I suppose in a sense, you would, wouldn't you, after the history of ITC and news programming. But is it not the case that OFCOM must take an intelligent and well-informed view on the impact scheduling can make on the success or otherwise of delivering the public service remit?
  (Mr Desmond) I think in broad terms we have no issue that OFCOM obviously has a clear view in scheduling matters, in terms of range, diversity and our commitment to regionalism. It is when it gets down to very specific scheduling issues and the fact OFCOM could come back at the end of the year and say, "We think ITV should have played Programme X in Position Y". I think really it should be down to the broadcaster, understanding its remit, understandings its obligations, to schedule to best effect whilst maintaining those obligations.

  557. So what sort of observations or instructions would it be reasonable for OFCOM to make?
  (Mr Jones) The Bill says, and it is a Tier 2 requirement on us which would be supervised by OFCOM, that we will carry news, current affairs, regional programmes and regional in peak news, which is a perfectly reasonable thing to do, but this is supposed to be about light touch regulation. I do not think it is light touch regulation for a group of regulators, most of whom would have no experience of television scheduling whatsoever, to tell experienced television people who spend a fortune each and every day, each and every month, on researching audiences to understand what they need and want at particular times, where to put a particular television programme. It is intriguing that Greg came back from Australia and decided to move the news and he did it, yet we had months and months of negotiation with our regulator about moving our news. There is a general requirement on us to do high quality, national and international news in the peak and to do current affairs in peak in a schedule of range and diversity, with children's programmes, drama, entertainment and information. I think it is for the people running channels in a light touch regime to put that together.

  558. Is that what you think the Bill will give you?
  (Mr Jones) I thought that was the policy aim behind it. I think by and large, yes. I think there is a reasonable balance within the Bill. Some things are over-prescriptive, which we have described in our evidence, but generally, yes, we are relatively content with it.

Lord McNally

  559. Andrew Neil at the Social Market Foundation debate at BAFTA yesterday described ITV as "a badly managed basket case". Indeed, there is some suspicion that your friend, Greg, would gladly in the future just slog it out with BSkyB and Channel 5 and see you pushed to the margins. In those circumstances, are you worried at all that the clause in the Bill actually puts an extra public service remit on ITV? Would you like a more flexible public service remit? Would you like a public service remit tied to audience share?
  (Mr Desmond) Broadly speaking, we are reasonably happy with the remit providing the light touch is applied to it. In terms of the reference to basket case, ITV has been through a very difficult time in terms of its core business, we have been through the worst advertising recession in living memory from our perspective, and have come up against the BBC which is now dramatically well funded and therefore there is an imbalance in the system which may well take some time to even out in the way the levy implications on our licences are currently configured. In terms of the remit itself, and changes to it, we think OFCOM should have the power to look at the economic landscape and take a judgmental decision both in terms of what is happening to the economy, what is happening in terms of the performance within the broadcasting environment, but it should be judgmental as opposed to formulaic. It is really up to us, if we believe there is a case for change, to come forward with a very clear proposition, or indeed if we believe another broadcaster should be making basic changes or should have changes forced upon them, then we should bring that case forward. So we do believe it is a proper role for OFCOM rather than the Secretary of State.


 
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