Supplementary memorandum submitted by
the National Consumer Council
Consumers need to be confident that their interests
are properly represented in this fast-changing and complex sector,
and so we very much welcome the proposal to establish a Communications
Consumer Panel. To be able to do its job properly, the Panel will
require economic, financial and social expertise to analyse developments,
identify the implications and lobby for the consumer interest.
It must be well-informed, expert and connected into consumers'
views and experiences. It will need its own staff, and to operate
at arms-length independently from OFCOM. The Panel's constitutionor
terms of referenceshould be set out in statute in the forthcoming
To be effective the Panel will need to:
Focus on representing domestic consumers'
interests (and those of small businesses) with a specific brief
to represent the interests of disadvantaged consumers.
Have a broad remit to cover all issues
of relevance to consumers. It will need to be able to deal with
content as well as service delivery matters from the consumer
standpoint. The reason for this is that access is crucial for
consumers but a key question is: access to what? The consumer
interest covers choice, diversity and quality of services as well
as how they are delivered and on what financial basis. The market
cannot be relied on to offer affordable and universal access to
diverse and high quality broadcasting. Public service broadcasting
is therefore critical to consumers' interests, especially the
interests of disadvantaged consumers.
The Panel will also need to:
Reflect national and regional interests
and other aspects of the diversity of consumers' interests.
Be independent of OFCOM (to the side,
not subservient to the regulator); with sufficient resources to
do its job. It should set its own agenda and have the freedom
to promote its views on behalf of the consumer interest.
Have legal standing to represent
consumers' interests not only to OFCOM but also to other relevant
regulators, Government departments, Parliamentary Committees,
the industry, the European Commission, and other international
Operate openly and accountably.
Consumers' interests should be at the heart
Its Board members should include
at least one person with direct consumer expertise/experience.
OFCOM should have a dedicated consumer
affairs department or unit to drive forward the consumer agenda
within OFCOM. Training will be of crucial importance for the culture
of the organisation. Consumer impact assessments should be a routine
aspect of its work, especially when consulting on policy options.
A formal Memorandum of Understanding
will be needed between OFCOM and the Consumer Panel to codify
their relationship, ensure co-operation and enshrine their respective
independence. There should be public consultation on the draft
OFCOM will need to be well connected
into information on consumers' needs and experiences, and should
liaise with the Consumer Panel on forward work programmes, including
co-operation on consumer research.
OFCOM should have duties to ensure openness
and public accountability for its activities, including a duty
to give reasons for decisions, and to publish consumer impact
assessments. The Communications Consumer Panel should be able
to scrutinise OFCOM's work and audit its performance. The Panel
should, therefore, have a duty to report annually on the effectiveness
of OFCOM's policies in fulfilling its consumer-related objectives
(in a similar way to the Financial Services Consumer Panel).
It will be important to ensure full input from
consumer representatives towards establishing OFCOM. The National
Consumer Council now runs the Communications Consumer Forum. This
is an NCC initiative to bring together consumer representatives
across broadcasting and telecommunications to discuss common issues.
Periodically the Forum members meet officials collectively, and
this route therefore offers a practical and direct way for civil
servants and regulators to discuss matters relating to OFCOMand
the Communications Consumer Panel with consumer representatives.
We recognise the need to avoid being over-prescriptive
about public service broadcasting (PSB). Flexibility and risk-taking
are essential for innovation and diversity. As the Culture, Media
and Sport Committee said in its report on the Communications White
Paper, PSB is a constantly changing phenomenon. However, basic
principles or criteria are required to set an overarching framework
for PSB, to clarify the role of the various PSB broadcasters,
and to help decide whether new services or broadcasters can be
defined as PSB. Such clarity will be particularly vital in the
run-up to the review of the BBC's Charter in 2006. It would be
sensible for that review to take place within the context of a
clearer PSB framework.
A framework for PSB should be based on consumer
needs. As we stated in our report on PSB: "A system of public
service broadcasting is required which is universally accessible
and affordable, which informs, educates and entertains, and which
meets other consumer criteria of choice, information, fairness,
redress and representation." (Tuning In To Consumers, NCC,
With regard to content regulation, we welcome
the flexibility of the new arrangements proposed in the Communications
White Paper. However, it is crucial that the companies' statements
of programme policy do not become a mere public relations exercise.
Without setting down a rigid set of rules, it will be necessary
to foster high standards and consistency across PSB broadcasters
in areas such as the criteria for assessing performance, and the
process for drawing up the statements, which should include consumer
consultation. OFCOM should draw up good practice guidelines, building
on experience gained from the first rounds of publication and
review of programme policy statements.
There will need to be room for independent consumer
commentary on the adequacy of the processes. Industry will, of
course, be in close and regular touch with OFCOM. But it would
be helpful for the industry to be required to meet annually to
discuss these matters with each other and with OFCOM and consumer
If performance against obligations is unsatisfactory,
OFCOM will need a range of sanctions, beyond the "nuclear"
option of licence revocation, which should be laid down in statute
and available to OFCOM as reserve powers. To ensure transparent
and accountable regulation, OFCOM should set out its criteria
to determine when its backstop powers might need to be enforced.
OFCOM will require adequate arrangements for
dealing with content regulation, possibly through a Content Board
as a sub-committee of the OFCOM Board. Whatever arrangements are
put in place, there should be close liaison with the Consumer
Panel especially over PSB issues. Overall, OFCOM will need to
ensure that it stays in touch with consumers' views but also recognises
the diversity and subjectivity of views on content.
Digital switchover will mean that people have
to replace or convert all television sets and videos. The issue
of TV equipment in multiple-occupation institutions, such as residential
homes and prisons, also has to be addressed. Around 100 million
items will need to be converted in totalthis is an approximate
figure but it is clear that it will be a very large number.
We understand that the Digital TV Group is trying
to work with retailers to produce a quality mark and code of practice
on selling digital equipmentretailers would sign up to
advising on all digital platforms, do installation and aerial
checks, or list aerial installers. Consumers will need to know
how to find out which retailers have signed up to any codes of
practice, and what the codes require the retailers to do.
In terms of a switchover date, in our view the
government must adhere to its tests of availability and affordability,
and resist any pressure to dilute the tests. Switchover should
be test driven, not date driven.
The government should clarify what
it means by universal internet access: does this mean from home
or in the local community? How is the government's goal of universal
internet access to be realised? Should it be based on a phased
programme with priority for disadvantaged groups (such as people
with disabilities or those living in remote areas)?
The government also needs to make
clear how it sees the role of broadband, narrowband and radio-based
technologies, as well as that of digital TV, in delivering the
goal of universal internet access.
Public policies on digital TV, internet
access, and e-government need to be coherent and co-ordinated,
and seen to be so.
If broadband is seen as crucial by
government and therefore part of public policy, the Government
should explore how it can be rolled out in all areas.
The affordability and attractiveness
of services and equipment, ease-of-use, and availability of interesting
applications will all be key to future internet take-up.
8 April 2002