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Baroness Howe of Idlicote: Listening to the noble Lord, Lord Puttnam, made me think wryly to myself that it would have been better if there had been two commissions, one dealing with the market place which he so ably described, and the other with the contents side. But we have moved on from that point.

My noble friend Lady O'Neill had hoped to be here to join in this part of the Committee stage, but she cannot be present for the summing up and therefore decided that she could not speak today. I hope that she will have an opportunity later.

Considerable concern has been expressed in the other place about the wider needs in the interests of the citizen. We have all used that word to great effect to differentiate it from the word "consumer", but for legal reasons it could not appear in the Bill. But there was wider concern that insufficient attention was paid to the needs and the interests of the citizen. These two amendments give the Minister the opportunity to expand on how the Government expect Ofcom to interpret these vitally important general duty clauses as currently drafted. As the Secretary of State for Trade and Industry herself said at the Bill's Third Reading in another place,

So where better to spell those out—if I may disagree slightly with the noble Lord, Lord Puttnam—than right at the top of this all-important Clause 3?

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Perhaps the Minister will also explain why the Government felt it necessary to table the amendment which now forms Clause 3(1)(b) when their original view was that the Bill as first drafted was satisfactorily even-handed as between the consumer and the citizen. The government amendment is certainly in my view a step in the right direction but it is still not thought by all to be explicit enough to meet the concerns expressed.

The amendments that I propose spell out in much more detail than the Government's current wording relating to furthering the interests of the wider community that one of the Bill's specific duties will be to promote the communications industry's ability

    "to contribute to public, civil and cultural life"

as well as

    "to uphold the principles of public service broadcasting".

In this rapidly changing world—above all, it is rapidly changing in communications—it is surely important to remember, and help to retain, the reason why British broadcasting has such a high reputation both nationally and internationally. To inform, educate and entertain is second nature to most UK terrestrial channels even if the highest quality is not always achieved in every programme. But we owe that whole approach to our broadcasting history and to the standards then set. As has just been said, from the early days of the BBC through to the introduction of commercial channels right up to today's interactive, electronic means of communication, as we must now call them, there has been the general expectation from UK citizens that public service broadcasting would form the backbone of what we see on our various interactive screens. That quality of this kind has survived owes a considerable debt, I would argue, to the regulatory framework within which British broadcasting has operated ever since. That expectation is with us still. Indeed, it is here in this very Bill where the proposed regulation for quality as well as the quantity of what is expected from our broadcasting channels is set out. Contrast that with the United States. There, regulation of broadcast content is minimal. If the Government succeed in their policy to open ownership of certain UK broadcasting channels to foreign owners, it will be even more important to have this requirement, this additional safeguard, right up there specifically spelt out as a paramount duty of Ofcom. I hope that the Minister will feel able to respond positively to these amendments.

Lord Alli: The notion of co-equality as between the consumer and the market is one that we have never really carried through in practice in this country. In fact, we have so distorted the market towards the consumer by the very existence of the BBC that it is a nonsense in terms of concept. My only contribution to the amendment we are discussing is to talk about the practicalities of it.

For some time I have worked as a senior executive of one of the major broadcasters. The effect of the measure we are discussing will be to allow me as a

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senior executive of a broadcasting company to look for a chink in the Ofcom armour and say, "You have to treat my commercial concerns in the same way as you do the consumer. As an executive in a broadcasting company I would not be afraid to take the Government to judicial review". In fact, Ofcom is more likely to be frightened of judicial review than I am as a commercial entity.

It seems to me that the amendments we are discussing would take away the risk of judicial review when the consumer and the market are in conflict. For that reason I believe that the Government should think very carefully about this set of amendments to save Ofcom being tested time and time again by clever executives such as myself.

3.45 p.m.

Lord Crickhowell: I intervene at this point having listened to the two speeches that have just been made. I particularly take the point about judicial review and the point made by the noble Baroness about what has happened in the United States. I shall speak to later amendments on the subject of ownership and other matters in relation to the American experience and shall produce some striking evidence of what has happened there as the monopolies have taken over—those vast companies with their commercial priorities and their ability to dictate events—as regulation has been relaxed in the United States. Therefore, it is important that we give the regulator very effective tools to tackle these extraordinarily powerful international organisations who perfectly reasonably have one overriding objective; that is, the commercial success of their companies. Often they originate in parts of the world where the public service principle has been less well developed than it has in this country.

I believe that the Government have made great progress in accepting many of the suggestions of the Joint Committee on that point. We now have spelled out the importance of,

    "the interests of the community as a whole"

which I believe is intended to absorb the citizen and makes clear that that is the paramount objective. But we need to give the regulator the tools to do the job effectively. Although the statement about the function,

    "to further the interests of consumers . . . and . . . of the community"

appears right at the top of Clause 3, the fact is that the clause covers two whole pages of the Bill and contains many qualifications, sub-qualifications and interpretations that will have to be addressed by the regulator. As subsection (6) of Clause 3 spells out, where it appears that any of Ofcom's general duties conflict with each other in a particular case,

    "they must secure that the conflict is resolved in the manner they think best in the circumstances".

That indicates the kind of difficulty the regulator will be in in such cases. It will be a fiendishly difficult task. I have been a regulator in a slightly easier field than I think Ofcom will operate in. I certainly would have

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liked to have spelt out by government and in legislation what the primary responsibilities were. I hope that the Government will listen very carefully to the arguments because I do not think that they are quarrelling with the principle that the consumer and the community interest is paramount. It is only a question of how we best achieve that. The Government would do well to take the advice that has just been given by a practitioner in this field of huge experience and consider particularly the experience of the United States and what has happened there, about which we shall hear a good deal more in this debate. I hope that they will take account of that and move appropriate amendments in due course.

Lord Bragg: I, too, wish to support the amendment proposed by my noble friend Lord Puttnam and by other Members of the Committee, some of whom were members of the much admired scrutiny committee. My noble friend Lord Puttnam is absolutely right on two vital counts. Our task must be to make sure that Ofcom is founded on an unambiguous basis. For want of a nail finally the kingdom was lost.

As for the phrase "co-equality", it must be put aside—as my noble friend suggested—for wording that, in any essential conflict, loads the argument on the side of the public interest. We will hear the words "public interest" many thousands of times in these discussions—and so we should. We must never lose sight of the fact that the massive majority of people in this country get their news, entertainment and education from television and radio. As my noble friend Lord Thomson pointed out, public interest broadcasting in the BBC, ITV and Channel 4 has been at the heart of our system. It is the way we do it. No fashionable financial flurries, jezabel trends or talk of greener grass elsewhere should shift us from that ground. For most of the British public, for most of the time, for almost 70 years, public service as the character of the British system has delivered.

The sudden arrival of multi channels and the clatter of mega corporations should not break our lines. Just because something is there does not mean that it is good or helpful. Volcanoes and earthquakes come to mind. Both are good metaphors for what has happened in television over the past 15, 10 and especially five years, from four to about 500 different channels—new money, new technology, new impatience, new lamps for old.

The landscape may have changed but the people have not changed much. Not in terms of public interest—which, if anything, is even more precious than before. That is why I so emphatically support the amendment.

I wish to bring forward a rather unexpected witness. Mr. Barry Diller may be said to have started Paramount Studios in the USA when he produced "Saturday Night Fever"—which broke all box office records at the time. He went on to become—according to my noble friend Lord Puttnam, who knows about these things—the single most successful American media executive and entrepreneur in history. He seems to be the embodiment of market man and the new—

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the old Adam Smith unleashed. His stake in one of his companies stands at 3 billion dollars and he is the thirtieth richest man in America.

Where does this supreme American entrepreneur feature in debates about British broadcasting in your Lordships' House? He brings a warning. He is the Cassandra that some of us need to jolt us. In a speech to the American National Association of Broadcasters in Las Vegas on 17th April, Mr. Diller made several observations about what has happened to American broadcasting since it slipped the harness of regulation and went whole hog for the market. I am fully aware that Mr. Diller speaks out of our context and circumstances. Like all warnings, this one may seem overdramatic, but I believe that the Bill might fall into the trap of the unintended consequences that lurk in wait if we do not get the legislation right.

I hope that I shall not tax your Lordships but I would like to quote rather amply from Mr. Diller's speech. First, he referred to America's regulated face until quite recently. It sounds like Eden. He commented that broadcasters were unique because their influence on society probably had no equal:

    "The houses of broadcasting had to be made of glass because broadcasters were given a free licence to operate, 'in the public interest, convenience and necessity'. That was a source of pride. It was also a source of fear because somebody could come in and take away those licences away. Everyone took those obligations pretty seriously and out of it came a truly remarkable balance between a great business model and servicing the public trust . . . But in an age when the free market has been the prevailing model this, like every other industry, wanted as much relaxation of the rules as possible so as to free the 'invisible hand' that Adam Smith envisioned, bringing us the wondrous benefits of unfettered capitalism. 'Laissez nous faire'. Get off our backs . . . We got the Communications Act of 1996. When it was passed, FCC Chairman Hundt said, 'The new law is intended to end the era of big government in communications and begin the era of genuine competition'. And it was embraced with enthusiasm and hope for real competition. What actually happened?"

Mr. Diller goes into detail but I will pick up on only one or two points:

    "Today . . . the great big beautiful tomorrow has dawned. The 500 plus channels that were going to turn the old, heavily regulated world upside down is a full-blown reality . . . The unintended consequence of deregulation is that the government has inadvertently allowed to happen the exact opposite of what it intended to do . . . Are we going to get real diversity? The programme departments of these businesses are now so far down the chain of life in these giant enterprises that it is a miracle that all shows on the air aren't about rejection. Conglomerates buy eyeballs. That's it. And they leverage. Oh do they leverage. They leverage their producing power to drive content, their distribution power—such as retransmission consent—to drive new services, and their promotional power to literally obliterate competitors".

He spoke about local broadcasting, which will strike a chord with many of your Lordships:

    "Local broadcasters should not be simply the distribution arms of monolithic enterprises. [They] have too much importance in [their] communities. [They] are the foundation of the whole edifice that is television".

Finally he commented:

    "The public interest is about promoting diversity, localism and competition. The old paradigm is gone. Now we are in a new universe and the question—is what to do? There are real dangers in complete concentration. The conventional wisdom is wrong. We need more regulation, not less".

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Perhaps that seems too heavy a warning. I do not think that it really is. The plotline of those remarks is already recognisable over here.

I quoted Mr. Diller at length partly to emphasise that we are playing for very high stakes. In our country and culture, I trust that when there is a head-on crisis your Lordships will make it clear that the public interest must always carry greater weight. There is no co-equality. To this and many other amendments, I lend my complete support and I hope that those points will be taken into consideration by the Government.

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