Joint Committee on The Draft Communications Bill Minutes of Evidence


Memorandum submitted by Associated Newspapers Limited

  1.  Associated Newspapers Limited ("Associated") is part of the DMGT Plc group. It is a leading UK newspaper publisher, whose titles include the Daily Mail, The Mail on Sunday, the Evening Standard and Metro. It also has significant Internet interests including ukplus.co.uk, thisislondon.co.uk and femail.co.uk.

  2.  This submission addresses the elements of the proposed legislation relating to newspaper ownership. DGMT is making a separate submission concerning radio ownership, cross-media ownership, Teletext and the nominated news provider for Channels 3 and 4.

  3.  Overall, Associated welcomes the Government's intention to introduce a lighter-touch to the regulation of UK media. Its success will depend on the practical details of the legislation. We have therefore considered the provisions set out in the Draft Bill in that light.

  4.  Associated agrees with several of the specific changes to existing law, but is concerned that the draft provisions on newspaper mergers are in some respects more complex than the existing regime. There is particular concern that the new Exceptional Public Interest test (EPI) introduces new elements of subjectivity, uncertainty and regulatory overlap into the procedures.

  5.  Associated endorses the proposals to:

    —  remove the requirement for the Secretary of State's prior consent to newspaper transfers;

    —  place newspapers proprietors and non-proprietors on an equal footing;

    —  remove criminal sanctions against purporting to transfer a title without consent, or breaching a condition of consent; and

    —  introduce de minimis provisions which will entirely remove the smallest newspapers from regulation.

  6.  It is regrettable that the full details of the new provisions are not available for discussion in this consultation process. The outline provisions which are published, however, offer a process for newspaper mergers which disappoints by failing to follow through the legislation's broad objective of producing a "streamlined and less burdensome regime". We do not think that the cause of de-regulation is well served by procedures which are more complex than the current regime in that they:

    —  involve more parties;

    —  fail properly to define the exact limits and roles of each party;

    —  fail to describe or define the central concept of plurality;

    —  involve potentially more stages;

    —  at present prescribe no time limits for each stage;

    —  introduce new elements of uncertainty and subjectivity with regard to the powers of the Secretary of State.

  7.  The competition test required by the Enterprise Bill seems relatively straightforward in its intent and application. The issue of plurality concerns and the related desire for procedures to "protect the additional public interest involved" give rise to a series of proposals (paragraphs 9.7.4 to 9.7.7 in the Policy Document) which are both opaque and confusing. In particular:

  7.1  The roles of the Secretary of State , OFT, OFCOM and the Competition Commission in raising, advising and deciding on EPI cases are far from clearly defined.

  7.2  The powers of the Secretary of State in paragraph 9.7.7 are too wide-ranging, and open to an unacceptable degree of subjectivity. Although she will not be able to dispute the findings of the OFT and the Competition Commission on competition-related public interest issues, she may override them by virtue of having the "final decision" on EPI issues "where plurality issues justify this course of action". She will apply an overall public interest test "that will take account of both plurality and competition."

  7.3  The concept of "plurality of views in the Press" on which these powers in part reside is nowhere described or defined in the proposals. The application of the Secretary of State's "final decision" could therefore be entirely arbitrary and political in character. At lower levels, it is impossible to see how the OFT could properly identify a plurality issue (9.7.5), how the Competition Commission could examine EPI issues based on plurality concerns (9.7.6), or how OFCOM could advise on EPI (9.7.7), without an open, consistent and commonly understood definition of plurality.

  7.4  Even with a clear definition of plurality as the basis of a public interest test, the proposals lack clarity as to the exact point at which EPI considerations would be introduced. Would this be at both referral and scrutiny stages? At what stage and with whom might the Secretary of State raise EPI concerns?

  7.5  There is no promise of transparency in regulatory judgments and advice in these issues, nor any indication of the overall timetables that might operate.

  7.6  We are not persuaded that OFCOM (whose staff will be largely drawn from the existing regulatory cultures of the ITC and OFTEL) has any expertise to offer in making judgements about newspapers, which unlike broadcasters are unlicensed, and whose freedom of expression is exercised without external regulation of content.

  7.7  We are opposed to the idea of Citizens' Juries being invoked to advise on issues relating to the ownership of local newspapers (9.7.6). The process of selection would be fraught with difficulty. Whom are they presumed to represent? What is their understanding of the issues? What are their prejudices? What weight would be given to their advice? Would their conclusions be published, and open if necessary to correction?

8.  CONCLUSION

  Associated believes that the draft legislation, while going some way to rationalise the regime for newspaper mergers, is defective in several key respects:

    —  too many regulatory bodies are involved. The resultant framework is therefore overly and unnecessarily complex;

    —  the exact roles and responsibilities of OFT, OFCOM, Competition Commission and Government remain unclear. There is consequently a real danger of parties and issues being bounced between competing regulators;

    —  there is no definition of the critical concept of plurality in newspaper ownership, itself part of the EPI concept; and

    —  the Secretary of State retains a power to override other regulators in making the final determination of EPI issues.

  Associated believes that it is essential that these elements of confusion be clarified. The overall regulatory complexity would be much simplified were OFCOM, currently playing an ill-defined consultative role, to be removed from the framework altogether. Similarly, much uncertainty could be removed were the Secretary of State to have no regulatory "casting vote" on EPI issues. Politics would also be removed from an area where political involvement is no longer appropriate.

June 2002


 
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