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Damages Bill [H.L.]

The Lord Chancellor: My Lords, I beg leave to introduce a Bill to make new provision in relation to damages for personal injury, including injury resulting in death. I beg to move that this Bill be now read a first time.

Moved, That the Bill be now read a first time.-- (The Lord Chancellor.)

On Question, Bill read a first time, and to be printed.

Edinburgh Assay Office Order Confirmation Bill

Read a third time, and passed.

Broadcasting Bill [H.L.]

3.33 p.m.

The Parliamentary Under-Secretary of State, Department of National Heritage (Lord Inglewood): My Lords, I beg to move that the House do now again resolve itself into Committee on this Bill.

Moved, That the House do now again resolve itself into Committee.--(Lord Inglewood.)

On Question, Motion agreed to.

House in Committee accordingly.

[The CHAIRMAN OF COMMITTEES in the Chair.]

Lord Inglewood moved Amendment No. 64:


After Clause 25, insert the following new clause--

The S4C digital service

(".--(1) If the Welsh Authority provide S4C Digital, it shall be their duty--

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(a) to provide it as a public service for disseminating information, education and entertainment,
(b) to ensure that all the programmes in Welsh which are broadcast on S4C are broadcast on S4C Digital at the same time,
(c) to ensure that the programmes which are broadcast on S4C Digital but not on S4C maintain--
(i) a high general standard in all respects (and, in particular, in respect of their content and quality), and
(ii) a wide range in their subject matter, having regard both to the programmes as a whole and also to the days of the week on which, and the times of the day at which the programmes are broadcast.
(2) Sections 57(4), 58(5), 59, 60 and 64 of the 1990 Act shall apply in relation to S4C Digital as they apply in relation to S4C.
(3) In this section "programme" does not include an advertisement.").

The noble Lord said: Before I speak to the amendment, the noble Lord, Lord Prys-Davies, wishes to draw a matter to the attention of the Committee.

Lord Prys-Davies: I invite the Minister to agree that there is an omission from subsection (2) of the new clause. I should like to think that it is inadvertent. I believe there should be reference to Section 58(1) of the 1990 Act, which is a key section for S4C.

Lord Inglewood: I am most grateful to the noble Lord. It is no part of our proposals to affect a change to the policies introduced by that provision in the new digital era. Therefore, perhaps I may at an appropriate time introduce a relevant amendment, probably on Report. I beg to move the amendment.

Lord Prys-Davies: I am grateful to the noble Lord for that reply.

On Question, amendment agreed to.

Lord Inglewood moved Amendment No. 65:


After Clause 25, insert the following new clause--

Advertisements included in qualifying services

(". Where an independent analogue broadcaster other than the Welsh Authority includes in a qualifying service advertisements which are not included in the corresponding analogue service (within the meaning of section 2(2)), sections 8 and 9 of the 1990 Act shall have effect as if the provision of the advertisements constituted the provision of a service licensed under Part I of the 1990 Act.").

On Question, amendment agreed to.

Lord Thomson of Monifieth moved Amendment No. 66:


After Clause 25, insert the following new clause--
("Subscriber management and subscriber authorisation services

Subscriber management and subscriber authorisation services

.--(1) An application for a licence to provide a subscriber management service or a subscriber authorisation service (in this Part referred to as a "subscriber management licence" or a "subscriber authorisation licence") shall--
(a) be made in such manner as the Commission may determine, and
(b) be accompanied by such fee (if any) as they may determine.

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(2) At any time after receiving such an application and before determining it, the commission may require the applicant to furnish such additional information as they may consider necessary for the purpose of considering the application.
(3) Any information to be furnished to the Commission under this section shall, if they so require, be in such form or verified in such manner as they may specify.
(4) Where an application for a subscriber management licence or a subscriber authorisation licence is made to the Commission in accordance with the provisions of this section, they shall grant the licence unless precluded from doing so by section 3(3)(a) or 5(1).
(5) Licences under the 1990 Act to provide--
(a) local delivery services,
(b) prescribed diffusion services, or
(c) other diffusion services,
shall be taken to authorise the provision of subscriber management services and subscriber authorisation services in so far as they relate to the provision of those licensed services.").

The noble Lord said: In moving the amendment perhaps I may speak to the amendments associated with it and refer the Committee also to Amendment No. 14 which I withdrew on Tuesday in the interests of a more coherent debate on this important issue today. My name is also associated, as is that of the noble Lord, Lord Donoughue, with Amendment No. 187, to be moved by the noble Viscount, Lord Astor.

The amendments have the same purpose; namely, to establish here and now a system of licensing and regulation for conditional access and encryption for analogue cable and satellite broadcasting. The difference is that the chosen regulator in the amendment I am moving is the Independent Television Commission; the chosen regulator in that to be moved by the noble Viscount, Lord Astor, is the Department of Trade and Industry. I prefer the ITC as the regulator for reasons that I shall attempt to give in a moment. However, what is important about both amendments is the principle of getting the system in place in the course of this legislation. It was because the noble Viscount was much more efficient and tabled his amendment much more quickly that I put my name to that amendment. In the immortal words, on which I was brought up, of the famous Clydeside MP, Jimmy Maxton, "If you can't ride two horses at the same time, then you're no good in this bloody circus." I apologise to the Committee for putting my name to two amendments with a slight, but not insignificant, difference between them.

For the benefit of Members who do not follow these matters in the detail they no doubt deserve, conditional access is simply the smart card technology which enables cable or satellite subscribers to have access to the programme provider of their choice. At present in Britain conditional access is dominated by a company that is part of the Murdoch organisation while BSkyB, which is also closely associated with the Murdoch organisation, dominates the world of satellite broadcasting.

I freely concede that both activities reflect the enterprise and risk-taking of the Murdoch organisation. I have no dispute at all with that. However, as I remarked at Second Reading:


    "On any principle of competition law it seems wrong that there is no public control where a programme provider is also the gatekeeper and can control access to other programme providers who compete with him".

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That is the principle with which we are dealing this afternoon. I was much encouraged in that the Minister appeared to recognise that very clearly at Second Reading. He said:


    "Providers of the encryption technology and subscription management services should not be able to abuse their position as 'gatekeepers'. We [the Government] intend, through licensing, to ensure that they do not discriminate unduly between broadcasters or multiplex providers and that they do not unreasonably refuse access to their services".--[Official Report, 16/1/96; col. 472.].

I was encouraged by those words but discouraged and battered by the fact that the Minister should confine that ringing declaration of principle in relation to competition law to future digital broadcasting, and so far has refused to apply it to present analogue broadcasting. I hope that he may be persuaded this afternoon to change his mind on that matter.

I also hope that the Minister will look again at the case for the ITC being the appropriate regulator rather than the DTI. I prefer the ITC because it is the statutory body established under the Broadcasting Act 1990 to license and regulate broadcast television in the United Kingdom--that is, other than the BBC and the S4C services--with particular regard to the content, range and terms upon which programmes are provided to viewers. Subscription television is undoubtedly a growth area. The relationship between broadcasters and providers of conditional access and subscriber management services will have an important bearing on the content, range and terms upon which those services are offered to viewers. Those are essentially broadcasting matters that come properly within the scope of broadcasting legislation and very much within the scope of the ITC's responsibilities and expertise.

Secondly, the ITC already has a statutory duty in relation to fair and effective competition. Those powers extend to the provision of conditional access and subscriber management services by its licensees. The problem is that the existing statutory provisions can be avoided by licensees ensuring that the provision of conditional access services is located in separate corporate entities even within a single group of companies. There are a number of matters of avoidance for the purposes of legislation in regard to broadcasting that we shall be dealing with in this Committee stage.

Therefore, what is required is not another regulatory system which will overlap with the ITC's existing powers and give rise to double jeopardy, but an extension of the Broadcasting Act powers to close that loophole. The ITC has all the necessary experience and can proceed quickly and economically without charge to a complainant and would not need to incur the costs and delay which might be involved if the parties had to seek recourse to law under other procedures. Moreover, the ITC is accustomed to working with other regulators, notably the OFT, the MMC and Oftel, wherever there are overlapping issues.

For all those reasons, I commend these amendments to the Committee. The proposed amendments would replace the Government's proposals which involve

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DTI licensing and Oftel regulation and would extend them to analogue satellite and cable for which, if there is a case for the digital broadcasting of the future, there is equally a very strong case for the analogue broadcasting of the present. I beg to move.

3.45 p.m.

Lord Donoughue: I support the amendment of the noble Lord, Lord Thomson. I remind the Committee that my name is also on Amendment No. 187 which will be moved by the noble Viscount, Lord Astor. I look forward very much to supporting him on that amendment. I accept that there are minor differences. There is an emphasis on analogue in the one amendment and on digital in the Bill here. This amendment is under the digital umbrella and we seek to extend to analogue. Like my noble friend Lord Thomson--history, I think, allows me to call him my noble friend--I propose to ride those two horses comfortably. I worked for a while for the late Lord Wilson who often rode three horses. So I have no problem there at all.

Our purpose in this amendment, as has been said, is basically to regulate conditional access systems on a fair, reasonable and non-discriminatory basis. The fundamental problem currently is that one operator of conditional access systems at present has the dominant so-called gatekeeper position in the analogue satellite market. We want to ensure that in this Bill nobody is in that dominant gatekeeper position, either in digital in the future where, I may say, we are broadly comfortable with the DTI's separate proposals, or now. We are concerned to open up the present analogue control to freer access. That is the main concern of our amendment. We are taking the opportunity when discussing digital to extend it to analogue.

The problem of gatekeeper dominance will grow more acute because with digital--whether digital terrestrial or digital satellite, I may say, with the growth of cable--it will be the subscription method and the pay-per-view method that will be the growth area. Those need the smart card--the key to unscramble the broadcast at the receiving end--and also a subscriber management system, basically to document, collect subscriptions and decide who has right to access.

Yet, in that future, inevitably there will be only a few conditional access providers, perhaps only two or, as now, only one. But whoever has that dominant gatekeeper position controlling access is in a position with high potential for abuse. That requires regulation. As I said, we start with digital but move to analogue because the gatekeeping arguments apply there also.

Gatekeeping is technologically neutral. It offers control whatever the technological system. It is neutral between analogue and digital and we must deal with both. Our amendments introduce that licensing for the keys to decode receivers and for the subscriber management systems to provide fair and effective competition requirements and to secure the necessary open access. It is the same for analogue as for digital. As I said, on digital we are very much in line with the DTI.

8 Feb 1996 : Column 344

My noble friend raised the question of who licenses. That is a very important argument taking place between the ITC and Oftel. I share my noble friend's sympathy with the ITC. We feel that they understand broadcasting and its separate values; so we should be very happy to have it. The Government propose Oftel and I suspect that that will prevail. Certainly, we are not opposed to Oftel, nor to the admirable director. Either of the two will do the job perfectly well. Our sympathy is with ITC but we understand the arguments of Oftel.

Let me make a final point about cable. We share the concern of the cable operators that the regulation that we introduce should indeed be regulation of the mechanical conditional access systems. We do not wish to have regulation of the underlying transmission networks. The problem for cable is that the system and the underlying transmission are linked. If we impose regulation, it will discriminate against cable because cable has the transmission network which, for instance, Sky does not--Astra is Sky's transmission system. We do not want that and we do not want to discourage the cable industry, which has taken considerable risks in making major network provision.

That is an additional point I put to the Minister. I support everything the noble Lord, Lord Thomson, said and I support the amendment.


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