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Baroness Birk: My Lords, it is a shock to be suddenly faced with new proposals. They are encouraging in some ways. But they are not the whole story. Channel 4 will still have difficulties to iron out. It will still be paying out £80 million; and the £37 million is in the reserve anyhow. Therefore the position is not quite as good as it may sound. As I am sure the Minister will appreciate, it is difficult to make a snap judgment having just heard the announcement. When we see it in writing, perhaps we shall understand better.

I agree with my noble friend Lord Thomson of Monifieth that as we were unable to achieve the complete abolition that many of us preferred, as was indicated in Committee, this is the next best option. I do not know whether it will be necessary to amend the proposed provisions. I do not believe that we should

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commit ourselves without reading the proposal and considering it further. However, we have gone a little further. As we were unable to achieve the complete abolition which seemed to me and a number of other noble Lords--I do not refer only to my noble friends--the best way forward, we shall have to find a way of dealing with this next option which is fair to Channel 4 and fair all round.

The Earl of Stockton: My Lords, your Lordships may not be surprised to know that even the amendment in the name of the noble Lord, Lord Thomson of Monifieth, does not meet the criteria I sought to establish at an earlier stage of the Bill. To be asked to compromise still further by the Minister at relatively short notice is a surprise.

My back-of-envelope calculations show that the difference for Channel 4 between the payments under what one might call the Thomson regime and those under the Inglewood regime would be in excess of £80 million. It is therefore no cheap compromise in terms of Channel 4's payments.

It is not clear from what my noble friend said exactly where the proposal will appear in the Bill. Does he propose to make an amendment at the next stage so that it will appear on the face of the Bill? Or is it to be assumed to be part of the munificence of his department in making the arrangements subsequently? Before the noble Lord withdraws his amendment, if that is what he is inclined to do, we need an additional reassurance from the Minister. If the noble Lord does not receive it, I would very much urge him to press the amendment.

5.15 p.m.

Lord Inglewood: My Lords, with the leave of the House, I do not wish to add a great deal. I am grateful for what noble Lords said. Obviously I would have preferred the entire House to say with one accord that the Government have got it completely right. However, I could not expect your Lordships to respond in detail to the proposal that I made without reading the particulars.

Perhaps I may respond to two specific points made by my noble friend Lord Stockton. First, we have not put detailed figures to the general approach I have just described. Secondly, I can confirm--as I believe I intimated--that we shall be bringing forward the relevant clauses for doing the kind of things I have described under the general principles of the 1990 Act. I hope that that is helpful.

Lord Thomson of Monifieth: My Lords, I thank the Minister for saying on the narrower but not unimportant point that I raised that he proposes that once the Bill becomes an Act he will immediately, by order, enable the capping of the reserve to take place and those resources to be made available to Channel 4 for programming rather than sterilised in the reserve. That is clear; there is no dubiety. I am grateful for his prompt response.

On the wider proposition, I thought that I had put forward a reasonable compromise. The Minister has now, in a sense, compromised my compromise. Many noble Lords know enough about the realities of these

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matters to appreciate the efforts that the Minister has made to bring about the proposals before us. They are not minor. They constitute a significant change in the Government's position. Although the noble Lord is a deeply respected Minister in this House he is not himself the Secretary of State. And beyond his Secretary of State we all know that there is a Treasury. To have got as far as he has done with the proposition that he put to us is a very considerable achievement. It would be grudging if one did not pay immediate tribute to that. Nevertheless, in many ways he has put forward such a substantial modification to my amendment that we shall all wish to examine it in some detail before Third Reading. We shall want to know from the Minister the answer to the question posed by the noble Earl, Lord Stockton. What will it mean in money terms during the 1998 year? For how much longer, and in what quantity, will the rather grotesque subsidy from Channel 4 to the profitable ITV companies continue? It arises out of the Government's formula as against the formula I put forward in my amendment.

We shall wish to examine the legislative arrangements for enacting the provision. I do not wish to take away from the fact that the Minister has made a substantial concession which it cannot have been easy for him to win. I beg leave to withdraw the amendment.

Amendment, by leave, withdrawn.

[Amendment No. 163 not moved.]

Viscount Astor moved Amendment No. 164:


After Clause 69, insert the following new clause--

Matters relating to conditional access systems and subscriber management services and licences to run systems

(" . After section 191 of the 1990 Act there shall be inserted the following sections--
"Matters relating to conditional access systems and subscriber management services.
191A.--(1) Any person who runs a conditional access system or a subscriber management service in relation to a television programme service shall be required to obtain from the Director a licence for the running of such system or service.
(2) The Director may after consultation with the Commission and such other persons as appear to the Director to be appropriate grant a licence for the running of a conditional access system or a subscriber management service in relation to a television programme service.
(3) A licence granted under this section shall be in writing and, unless previously revoked in accordance with any term in that behalf contained in the licence, shall continue in force for such period as may be specified in or determined by or under the licence.
(4) A licence granted under this section may be granted to all persons, to persons of a class or to a particular person.
(5) A licence granted under this section may include--
(a) such conditions as appear to the Director to be requisite or expedient having regard to the duties imposed on him by subsection (9) below;
(b) conditions requiring payment to the Director on the grant of the licence or payments during the currency of the licence or both of such amount or amounts as may be determined by or under the licence; and
(c) conditions requiring any person who is authorised by the licence to run a conditional access system or a subscriber management service to furnish to the Director, in such manner and at such times as he may reasonably require, such documents, accounts, estimates, returns or other information as he may reasonably require.

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(6) Without prejudice to the generality of paragraph (a) of subsection (5) above, conditions included by virtue of that paragraph in a licence granted under this section to a particular person may require that person--
(a) to comply with any direction given by the Director as to such matters as are specified in the licence or are of a description so specified;
(b) except in so far as the Director consents to his doing or not doing them, not to do or to do such things as are specified in the licence or are of a description so specified; and
(c) to refer for determination by the Director such questions arising under the licence as are specified in the licence or are of a description so specified.
(7) A licence granted under this section otherwise than to a particular person shall be published in such manner as the Director considers appropriate for bringing it to the attention of the persons for whose benefit it will ensure.
(8) Any sums received by the Director under this section shall be paid into the Consolidated Fund.
(9) It shall be the duty of the Director to exercise his function in the grant of licences hereunder in the manner which he considers is best calculated--
(a) to ensure fair and effective competition between persons engaged in the provision of conditional access systems, subscriber management services and services connected with them in particular television programme services;
(b) to promote the interests of consumers, purchasers and other users in the United Kingdom (in particular in respect of the prices charged, the quality and variety of service) of conditional access systems, subscriber management services and services connected with them in particular television programme services.
(10) The holding by any person of a licence authorising the provision of a conditional access system or subscriber management service shall not relieve him of any requirement to hold a licence under section 7 of the Telecommunications Act 1984 in connection with the provision of such a service or system.
Licences to run systems.
191B.--(1) Any person who runs a conditional access system or a subscriber management service within the United Kingdom shall be guilty of an offence unless he is authorised to run such a system or service by licence granted under section 191A above.
(2) A person guilty of an offence under this section shall be liable--
(a) on summary conviction to a fine not exceeding the statutory maximum;
(b) on conviction on indictment, to a fine.
(3) No proceedings in respect of an offence under this section shall be instituted except by or on behalf of the Director.
(4) Without prejudice to subsection (2) compliance with this section shall be enforceable by civil proceedings for an injunction or interdict or other appropriate relief.
(5) In this section and in section 191A--
"broadcast" includes transmission by wire or other electromagnetic means;
"conditional access system" means any system or apparatus designed or adapted for the origination, initial transmission and final reception of signals for the actuation, operation or control from another place of other apparatus by means of which such signals comprising encrypted television programme services (save for such services which are broadcast in digital form) broadcast for general reception may be received and decrypted;
"Director" means the Director General of Telecommunications;

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"subscriber management service" means a service provided to any person operating a conditional access system or to any other person in connection with television programme services (save for such services which are broadcast in digital form) provided or transmitted by another person whether or not that last person is in the United Kingdom for billing or payment handling in respect of charges for and payments received from viewers of encrypted television programme services broadcast for general reception in the United Kingdom.".").

The noble Viscount said: My Lords, we debated this issue twice in Committee and at the Report stage on Tuesday, so I will not repeat the arguments. My amendment on conditional access for analogue satellite television has all-party support. It has the support of the television companies, the cable companies and programme makers; and also of EUTELSAT, the intergovernmental organisation in Europe; and of course the Government support the principle of conditional access for digital satellite television.

My noble friend the Minister was as usual most helpful and allowed me to take my case directly to the DTI, which will be responsible for future regulation in this area. I was unable to persuade the Minister at the DTI. I have to say that I think the DTI has its own agenda for broadcasting. It feels that it is only necessary in the future for digital to have conditional access, and contends that digital is just round the corner.

If the 1990 Act taught us anything, it is that in the broadcasting world it is very difficult to predict the future. Even the industry is not predicting the date when digital transmission will commence. Analogue may be with us for quite a long time. This issue is one of the most important in the Bill. I beg to move.


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