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Baroness Buscombe: Perhaps I may—

6.45 p.m.

Lord McIntosh of Haringey: I do not want to pre-empt debate, but I could be helpful to the amendment, which might save time.

We agree that the intention of Article 10(1) of the universal service directive appears to be that subscribers to any of the universal services mandated by the directive should not be required to pay for other facilities or services where those are not a necessary part of that service. Certainly, we think the drafting will achieve that but we recognise the concern that it might lead to more extensive regulatory interventions than are envisaged by the directive, which is "officialese" for what the noble Lord, Lord Avebury, called "gold plating".

So, we are sympathetic to the intention of the directive. We should like to consider the point further. We shall undertake that the Government will consider bringing forward an amendment on Report on that point.

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Lord Avebury: That is a most satisfactory answer. I beg leave to withdraw the amendment.

Amendment, by leave, withdrawn.

Clause 65 agreed to.

Clauses 66 to 70 agreed to.

Clause 71 [Specific types of access-related conditions]:

Lord Avebury moved Amendment No. 102A:

    Page 71, line 42, at end insert "; and

(c) that where the practices required by the code for electronic programme guides under section 304 in relation to the type of selection described in subsection (2A)(a)(ii) of that section require additional software or an additional facility to be provided in relation to the guide, that such facility or software be provided within a reasonable period of time, and that the terms as to price on which it is provided are set to entitle the recovery of the direct cost of making the facility or software available together with a reasonable return for the provider only."

The noble Lord said: This amendment refers to a very important problem, which I referred to at Second Reading. Up until now the BBC's programmes have been transmitted in encrypted form for users of set-top boxes but from 30th May onwards they will be in the clear. That means that digital satellite viewers in the UK will be able to receive the eight BBC channels without the use of a Sky viewing card, through any make of digital satellite receiver, but current and future Sky subscribers will still be able to receive all the BBC's services.

The BBC states that it will save an estimated 85 million over the next five years because it will no longer need BSkyB's conditional access system. Nearly half of those savings, 40 million, will be used to improve access to the BBC's national services in Scotland, Wales and Northern Ireland plus, for the first time, the 15 regional variations of BBC1 in England will be available on satellite and will be listed on the Sky electronic programme guide. That means that viewers will be able to choose the regional or national version of the BBC that they prefer, irrespective of where they may be living.

The BBC has been able to do that because its conditional access contract with Sky expires at the end of May and because the signals which it now proposes to transmit are being tightly focused via the Astra 2D satellite, which eliminates the rights problems that would have arisen with the larger footprint of the old transmissions.

In order to give the viewers the ability to select the version of BBC1 and BBC2 of their choice, the EPG software needs to be modified and the BBC obviously hopes that that can be done as soon as the new arrangements begin and at a reasonable cost. Sky, on the other hand, is understandably miffed at the prospect of losing a substantial income over the next five years and would like to make up some of the difference via its monopoly on the EPG.

The software is a proprietary system, but the BBC knows enough about the way it works to be able to say that the modification it needs is fairly simple. It would

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be prepared to pay a fair price to Sky for the programming work, including a fair profit margin, and that is what the amendment proposes. In the absence of such a provision, Sky could hold the BBC to ransom. It has already said that it is unwilling to do what the BBC asks when there are other commercial opportunities that it could pursue with the limited programming capacity at its disposal.

It would be difficult to overstate the importance of the EPG. It is a combined Radio Times and channel selector. If an agreement is not reached between the BBC and Sky, it is the viewers who will suffer. This is par excellence a case where the regulator should have the power to set conditions so as to ensure that the customer of a monopoly is not held to ransom. I beg to move.

Baroness Howe of Idlicote: I support the amendment. I hope it will provide the following benefits. First, that it will underline Parliament's support for the availability of high-quality public service programming on the digital satellite platform, including local and regional services such as news and current affairs; secondly, that it will enable television viewers to select easily the regional services of their choice; and, thirdly, that it will ensure that satellite operators are guaranteed a fair price for making any required software upgrades.

In the Broadcasting Act 1996, Parliament made its intention quite clear regarding the access to public service channels broadcast on digital platforms. By defining the principles of "fair access" and "due prominence", it ensured that public service channels could be easily located by viewers using electronic programme guides.

However, as we all know, further advances in technology—apart from providing for a proliferation in the total number of channels available—have now provided, as we have heard, the opportunity to further extend viewer choice in the area of regional services. I agree with the noble Lord, Lord Avebury, that the amendment is important for ensuring that digital satellite viewers have the maximum choice over which public service regional services they want to watch on the top slots of the electronic programme guide.

As we have heard, following its recent decision to broadcast unencrypted on Sky's digital platform, the BBC has announced that it intends to place its regional services on Sky's EPG. It also wants viewers to select which regional service they want to watch on slots 101 and 102.

For the vast majority of viewers the choice of regional programming will no doubt be determined by where they live. However, there will now be a choice for them to take the decision for themselves. A Scot, for example, working in London may wish to keep in touch with his or her local news north of the Border. Similarly, a Londoner who resides—no doubt because of his job—in the West Country may relish the opportunity to keep up-to-date with local news in the capital.

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To facilitate this consumer choice, the BBC has requested that Sky make the required simple software upgrade to its EPG system. I believe that both ITV and Channel 4 support the amendment because in the future they too may possibly want to offer a similar choice to viewers.

It is important that Parliament gives some guidance in the Bill as to how the cost of these potential software upgrades are to be regulated and the speed with which they are to be implemented. Naturally, platform operators are entitled to recover in full the costs they incur in carrying out such upgrades and—I may say—to receive a reasonable profit margin for so doing. There must be no question of public service broadcasters getting something for nothing.

Similarly, attempts to provide greater consumer choice must not be hindered by interminable disputes over the cost and timing of providing such upgrades. In debates that have taken place outside the House, we have had examples of some of those. So, by addressing the issues of cost and timing, the hope is that this amendment will not only protect the interests of the platform operators—which is perfectly legitimate—but that the public interest aspect will also be fully taken into account.

Lord Gordon of Strathblane: I put my name to the amendment because it came closest to what I was looking for in the Bill as regards either conditional access or electronic programme guides. I do not regard the amendment as being fully satisfactory. I hope that on Report the Government will return with an amendment couched in even more general terms, which simply gives power to Ofcom to intervene proactively to fix tariffs.

I do not sign up in full either to the position of the BBC or to the position of Sky. Both are misrepresenting each other like nobody's business. But what I am clear about is the fact that we have a monopoly supplier and we need proper regulation in the public interest as to how it operates.

I leave it to the Government to do that. Also, I fully recognise that the nature of the game is changing. Incidentally, perhaps I may correct the noble Lord, Lord Avebury. I do not think that the BBC is going to switch on 30th May precisely because it is involved in negotiations with Sky. To be frank, much fine verbiage about this matter has been exchanged, but the two organisations are playing a poker game to decide how much to pay. We have two very good poker players in the BBC and Sky. I am simply concerned that the public interest could be lost unless Ofcom is given the power to intervene and say, "We are not leaving you two to go on like this for another year. This is what will happen." I hope the Government will come forward with something on Report to address that.

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