Previous Section Back to Table of Contents Lords Hansard Home Page

Lord Desai: To respond to a point made by the noble Viscount, Lord Chelmsford, as the Minister may remember, I moved a similar amendment earlier, to bring about a level playing field, as we call it.

Once Sky had taken over BSB, the domestic spectrum had been sold to foreign broadcasters. Sky was transmitted to domestic receivers via Luxembourg. The domestic/non-domestic distinction in the 1990 Act has been overtaken by technology and by mergers. The amendment moved by my noble friend is therefore entirely appropriate to the present day.

5 p.m.

Lord Inglewood: I am grateful for your Lordships' concern about this matter, particularly the noble Baroness, Lady Dean, who clearly spelt out the reasoning and effect of her amendment. Her desire to promote the European independent production sector, and the UK industry in particular, in the context of European programming content is admirable. However, I am not convinced that the requirements she seeks to impose are either practical or desirable.

We listened carefully to what has been said this afternoon and I should like to reflect on that. However, I shall explain what we see as the general position in relation to satellite broadcasting.

Both terrestrial and satellite channels are already bound by the terms of the 1989 broadcasting directive to secure, wherever practicable, 10 per cent. of their output from producers independent of broadcasters. Given the number of hours broadcast by the satellite channels, that is already a significant requirement. To seek to more than double that requirement by means of this amendment would not be in the interests of the broadcasting industry, especially when significant amounts of independent production for sports, news and game shows are excluded as qualifying towards the European quota.

I note what was said by the noble Lord, Lord Desai, about establishing a level playing field for the competition between BSkyB and the terrestrial channels. I fully understand what I imagine to be the thoughts behind his intervention. But the products of traditional terrestrial broadcasters and satellite broadcasters are not the same. The first and most important requirement for a new entrant satellite broadcaster is to establish the financial viability of his operation. Without access to terrestrial frequencies, that broadcaster needs to start from scratch to win access to the millions of homes which the terrestrial commercial broadcasters automatically reach with both their programme material and their advertising in support of it.

BSkyB is a good example of a much more developed and diverse broadcaster than many others. It is now able to expand and the company has introduced a number of new channels, such as the History Channel. Others, such as the documentary based Discovery Channel, also use significant amounts of European and independent

13 Feb 1996 : Column 532

production content. Looking across the complete range of BSkyB channels, I am pleased to note that they seem comfortably to exceed the European broadcasting directive quota of 10 per cent. for independent European production.

We must not forget, however, that although BSkyB is the biggest satellite broadcaster it is not the only one. Satellite broadcasting is a growth area. At the end of 1992 there were some 42 channels. Today there are over 60. Some of the 42 are no longer in business. It is a high cost, high risk business which as yet attracts a total viewing audience of only 8.7 per cent. It is also a highly consumer-led industry, catering for specialised tastes. It needs to research its potential audiences very carefully. For some thematic channels, especially nostalgia movies, soaps or sport, the question of independent production quite simply does not arise. For others, such as those eight catering for non-European language populations, 25 per cent. would be an onerous and, indeed, impossible requirement.

We are comfortable with the existing obligations in the 1989 broadcasting directive precisely because they allow for a diversity of channels, and recognise the problems of new entrants, particularly where commercial and cost considerations are concerned. The flexibility allowed for in the current broadcasting directive has encouraged companies such as Turner Broadcasting to establish a European base in the United Kingdom. I would also like to think it plays a part in encouraging potential developments such as the one announced today of a £225 million international film and television studios and theme park to be opened by Warner Brothers and MAI at Hillingdon. Ten per cent. of independent programme content, where practicable on individual channels, in this rapidly expanding sector can only be good news for United Kingdom and European production companies.

I have taken a little time trying to explain the context of the satellite broadcasting industry as we see it. We believe that there is a real risk that if one imposes too high a threshold of the kind proposed in the amendment it may fail to draw broadcasters. That will be to the detriment of potential independent producers in this country and production of television material in Britain.

We must try to ensure that there is sufficient diversity of transmitters--if I can call them that--of television material that will create a market for the material produced in the United Kingdom. We are anxious not to put hurdles and barriers in the way of that happening in the form of driving away potential broadcasters who may use that material.

I listened carefully to the arguments put forward lucidly this afternoon by Members of the Committee and hope that, in turn, the Committee will consider carefully the points I have put forward in order to explain my standpoint at this Dispatch Box.

Baroness Dean of Thornton-le-Fylde: First, I thank all those who have taken part in the debate and the Minister for the detailed and considered way in which he responded to the amendment. However, I should like to comment upon one or two points that were made.

13 Feb 1996 : Column 533

I feel that we sometimes tend to apply a higher threshold on our producers of television programmes than we apply to non-domestic providers. When we talk about small companies, it is worth looking at the annual turnover of some of our regional television companies, because this Act applies to them. I do not believe that equity comes into the equation. The noble Lord, Lord Astor, said that the amendment would restrict choice; that satellite is more specialised. That is not the intention of the amendment and I do not believe that would be the result if the Minister accepted it.

I heard the Minister's response and am not absolutely convinced by it. Before I conclude, I should like to refer specifically to the point made by the noble Viscount, Lord Chelmsford, who focused sharply on what the amendment means. At the moment we are discussing BSkyB, but the amendment is not aimed at BSkyB; it is aimed at non-domestic satellite services in the belief that when the Bill becomes an Act it may put us ahead of the game for once, which certainly was not the case in 1989. But the noble Viscount, Lord Chelmsford, is absolutely right that Section 45 of the 1990 Act deals with the licensing of non-domestic satellite services. Section 44 deals with domestic satellite services. The difference between the two is that, whereas Section 44 requires the 25 per cent. from independent producers and the European origin content, Section 45 specifically does not. The amendment would bring Section 45 into line with Section 44 of the Act.

I shall reflect on what the Minister said and read Hansard carefully. I felt that there were some positive messages coming through. I may come back to the matter on Report but, in the meantime, I beg leave to withdraw the amendment.

Amendment, by leave, withdrawn.

[Amendment No. 146ZA not moved.]

Schedule 2 [Amendments of Broadcasting Act 1990 relating to restrictions on holding of licences]:

[Amendments Nos. 146B to 150A not moved.]

[Amendment No. 151 had been withdrawn from the Marshalled List.]

[Amendments Nos. 151B and 151C not moved.]

[Amendment No. 152 had been withdrawn from the Marshalled List.]

[Amendments Nos. 152A to 152E not moved.]

Viscount Chelmsford moved Amendment No. 153:

Page 80, line 1, at end insert ("relevant").

The noble Viscount said: In moving Amendment No. 153, I wish to speak also to Amendments Nos. 154 and 157 to 161. Part III of Schedule 2 lists those services which are licensed by the commission and which are thus subject to various restrictions. The list is basically one of programme providers. However, paragraph 1(2)(f) extends the list to include local delivery services. In general the Bill recognises the difference between a programme provider and a delivery operator. Its restrictions as to the number of licences held and to audience share are aimed at programme providers, not at delivery operators. That recognises the interests of the

13 Feb 1996 : Column 534

delivery operator which are to transmit material for as many different programme providers as possible. His competitors are rival delivery operators. He has no interest in preventing programme providers from broadcasting. It therefore came as a surprise to cable companies, whose trade is that of delivery operators, to find that, under paragraph 1(2)(f), they are included in the restrictive provisions. I understand that in discussions with the ITC they were reminded that they had editorial control of local advertising and also foreign non-European programmes delivered by them. I am told that they have in fact a statutory responsibility to vet such local advertising and that the only foreign programmes are from a Russian channel called Moskvar. It is arguable that those editorial responsibilities are so de minimis that the Government could delete paragraph 1(2)(f) entirely. Indeed, that would make everything very much simpler. However, the cable companies decided to ask for a more modest solution. Their association approached me to seek an amendment which would limit the effect of paragraph 1(2)(f) only to those situations where the cable companies act as programme providers. The amendments are drafted to achieve that.

At this point it is best for me to advise the Committee that I am a director of EURIM and that the CCA is a member, as are others from different parts of the broadcasting and communications world. However, I do not work for any cable interest; nor do I personally take any money from any party. I am moving the amendment because I was asked to and because it seems to me a reasonable thing to do, and not for any other reason.

The wording of Amendment No. 154, the principal amendment, may look complex; it is actually quite simple. It restricts the effect of paragraph 1(2)(f) to circumstances where the companies act as programme providers, using the definition for the licensed service set out on page 66, line 14, of the Bill. It uses the Government's own definition. I should add that without the amendment the industry will find itself double-counting audience time, once in respect of the programme concerned and again for the local delivery operator. Should the amendment be accepted, the other amendments in my name fall logically into place, including the deletion of references to the local delivery services on page 90, lines 38 and 51, in order to remove cable companies from cross-media ownership restrictions.

In local delivery services the true competitors of the cable companies are MTL, the BBC's transmission arm, SES Astra and, perhaps sometime in the future, British Telecom. None is subject to restrictions about licences, audience share or ownership. My amendments seek to return the cable companies to the same position, a position which they have historically enjoyed. I beg to move.

5.15 p.m.

Lord Inglewood: My noble friend's amendments, Amendments Nos. 153 and 154, seek to meet the concerns of the cable industry about how audience shares are attributed to their services. I recognise that holders of local delivery licences usually transmit

13 Feb 1996 : Column 535

programmes which are provided for them by other broadcasters as part of the programme service. As my noble friend pointed out, they are normally only held accountable for the content of any advertisements and any foreign satellite programmes they may relay which are not otherwise licensed for broadcasting in the United Kingdom. My noble friend's amendments seek to ensure that it is only these programmes which are included in the audience share attributed to the local delivery licence.

It has not been our intention that programme services provided to a local delivery service by another channel which holds a UK licence should count towards the cable service's audience share. In our view the drafting of paragraph 3(1)(a) of Part III of the schedule ensures that audience time attributable to a service would be produced,

    "by ascertaining, in relation to every person who in that period watched any programme included in that service, the total amount of time he spent in that period watching programmes so included".
The wording means that if a programme is delivered as part of a licensable programme service, regardless of whether it is delivered by cable, satellite or terrestrial television, the watching of it will be included against that programme service and not against the local delivery service or, as the case may be, satellite service. In our view there is no question that a programme provided via, say, Channel 3 which is received through a local delivery service would count towards both the Channel 3 service and the cable service. If it is a Channel 3 service it will only count against that service regardless of the means of delivery. I hope that that reassures my noble friend and meets his point.

Perhaps I may talk briefly about the practice. The ITC is likely to use statistics provided for it by the Broadcasting Audience Research Board--BARB--which already provides viewing figures for the industry. These are gathered by means of a panel consisting of some 4,700 households spread geographically across the UK. The viewing of programmes by all members of the household over the age of four is recorded electronically by means of a so-called people meter, regardless of the means of delivery used. The figures provided for the viewing of BBC1, for example, reflect viewing by those who receive the signal through terrestrial as well as through local delivery service. Although in practice BARB is able to say what percentage of viewing of BBC1 was in cable and satellite homes, it would not be able to identify what viewing of that channel was attributable to each local delivery service.

We conclude that the amendments are not necessary as viewing of licensable programme services and other television channels which are delivered through cable will not be counted against that local delivery service. In fact, the effect of my noble friend's amendments would not be quite the one that I think he intends. In strict terms it would mean that the only programmes delivered through a local delivery service which could be counted towards audience share would be those for which cable companies were deemed to have editorial responsibility; namely, satellite services which were not licensed in the UK but were relayed by means of cable and the cable service's own advertisements. The result

13 Feb 1996 : Column 536

would be that those people who chose to watch services like BBC, ITV or Sky but received them through cable would have to be discounted from the total television audience. That, in turn, would distort the overall picture and lead to the disappearance of audience share statistics for those programme services, such as, for example, Live TV, which are delivered exclusively through cable.

I appreciate my noble friend's wish to ensure that local delivery services are not subject to unnecessary regulation as they are essentially a means of delivery rather than a broadcasting service in their own right. However, to exclude them from the 15 per cent. audience share threshold altogether would open up a damaging loophole in our policy. As we believe the amendments are not necessary to protect the interests of local delivery licence holders--I hope I have reassured my noble friend about that--and as we believe that they do not achieve the objective that is intended, I ask my noble friend if he will consider not pursuing them.

Next Section Back to Table of Contents Lords Hansard Home Page