Memorandum submitted by NTL
NTL is pleased to have the opportunity of commenting
on the draft Communications Bill.
NTL is a communications company providing affordable
access to TV, radio, telephone, Internet and other services throughout
the UK. We are the largest company in our market, with over three
million customers choosing to take approximately five million
individual services. Of which, 2.54 million homes take at least
two services. 38 per cent of these customers take the so-called
"triple play" of TV, telephony and internet services.
A separate part of our business, NTL Broadcast
(whose origins lie in the Independent Broadcasting Authority's
engineering arm) is a major provider of transmission and other
services to TV and radio broadcasters.
These written observations set out NTL's overall
reaction to the main issues raised in the draft Bill. We recognise
that the Committee has expressed a particular interest in five
aspects of the draft Bill, and we would be pleased to expand on
our views on these five aspects (and any other interest to the
Committee) when we give oral evidence.
We welcome this draft Bill. If and when
introduced, it would signal a quantum leap forward in the way
the industry is regulated. Despite numerous delays the Government
have used their time skilfully to produce a generally well thought
out, forward looking and consistent set of policies that we welcome.
However, it is worth noting early in our remarks that in a number
of important respects, the Government's plans are incomplete or
undrafted. If additional details are forthcoming before the end
of the Joint Committee's consideration of the Bill, we may wish
to return to the Committee with additional comments.
The UK requires world class communications companies,
with the scale and ambition to be truly innovative in the development
of content and technology. This may necessitate further consolidation.
Reforming cross-media ownership rules and allowing consolidation
is a necessary, and welcome, stepit will allow stronger,
more effective commercial broadcasters to develop.
However, the broadcaster interests are only
a partand in term of importance to the economy, a relatively
small part of the sector as a whole. The Bill needs to also deliver
real benefits for other market participants.
Economic regulation needs to take place at
internet speed: and by this, we mean broadband internet, not
dial up. We emphasise this point, recognising that the bread and
butter issues of economic regulation may appear somewhat arcane.
Nonetheless, it is absolutely central to the future activity of
OFCOM, and to the achievement of the Government's objectives,
that regulation works effectively to promote consumer benefits
and crack down on anti-competitive practices.
Will the Bill stand the test of time? Businesses
work against planning cycles which typically look to three to
five year timescales and beyond. It is important that the Bill
provides predictability and certainty over such timescales. Equally,
the Bill must have the durability to last for a minimum of two
Parliaments. Previous broadcast legislation has required revision
within five years of implementation, partly because it dealt with
the issues of the moment not the issues of the future. There is
a danger that legislation first conceived in 2000, introduced
in 2002, and fully in force by 2004 means that we require further
changes to be made in 2005. It is surely not desirable that
the legislation currently before the Committee would need to be
substantially re-written before the ink is dry.
The cable industry represents the truly
By convergence, we mean:
at the technical level, transmission
media are now very similar in terms of their core components and
at the distribution level, services
associated with particular platforms can now be delivered via
other platforms, so internet can be delivered on the TV and voice
telephony over the internet using IP; and
at the content creation level, providers
can now design content (such as original drama or news) for distribution
across a variety of different platforms and media.
Convergence is not a pipe-dream, it is happening
as we speak:
NTL customers across the UK enjoy
their digital cable TV, but can do much more than passively "watch".
Every month over 1.7 million e-mails are sent or received via
the TV set. Using the TV screen, our customer can sit on the sofa
and surf or e-mail. At half time in the World Cup matches our
customers will be able to e-mail their views on the first half
action to friends around the world. The internet and TV coverage;
text messaging has been great news
for the mobile phone industry. Millions of users are comfortable
using the small handset to text. So how about texting using the
TV remote control? It's even easier. Today, our customers are
able to text friends via their TV set, without missing the TV
programme. The mobile phone and TV coverage; and
broadband access makes watching video
on the PC quick and easy. It's the internet as it should be. Our
broadband customers will soon be able to watch the best internet
news, weather, sport, music videos, games and even the best of
the World Cup goals on their PC. TV content converging with the
internet through the PC.
Converging technologies need a convergent regulatory
environment, which is why NTL welcomed the publication of the
draft Communications Bill. Convergence goes to the heart of this
legislation and despite it not happening either as quickly or
in the exact form which some predicted, the merits of convergence
have been largely ignored in the public debate focusing on linear
broadcasting issues. The singular opportunity afforded by the
Government's review of the legislative and regulatory framework
is being missed. Broadcasters and industry players, including
certain sections of the Government find themselves responding
to an increasingly digitised and converged environment that drives
innovation faster and farther than ever before contemplated. In
particular the gauntlet needs to be thrown down to the traditional
linear broadcasters to embrace the development of broadband content,
and not simply defend the status quo in linear broadcasting.
While the Government has been justly criticised
for repeated delays to the legislation, the market has moved on.
A huge range of services, increasingly with an interactive element,
are being accessed through a variety of mediums with multiple
functions. It is in this arena that the broadcasters and telecoms
companies will find the future. The major challenge for Government
to contend with is whether they have produced a set of proposals
that will stand the test of time in a very fast moving environment.
In all likelihood this Bill cannot hope to keep up with or reflect
all the changes that are happening but the general approach the
Government has employed does provide a better chance that the
legislation will still be relevant for years to come.
NTL has consistently called for legislation
that is sensible and has a clearly articulated policy framework
which, is underpinned by the belief that the realisation of Broadband
Britain is essential to the achievements of the Government's aims.
The fact that the draft Communications Bill is too late to resolve
the problems with DTT or deliver unbundled local loops will not
be serious if the legislation promotes, facilitates and drives
forward the aims of competition, convergence and broadband
in many sectors including education and health.
We contend that before the legislation is considered
"fit for purpose" by Parliament it must be able to pass
the five tests of convergence.
Does the Bill support a truly convergent vision
of tomorrow's media landscape?
Tomorrow's digital landscape needs a clearly
articulated policy framework, underpinned by a belief that Broadband
Britainwhich will provide the electronic infrastructure
for a modern knowledge economyis essential the achievement
of all of our goals. NTL believes that the key public policy objective
should be to build a nation of connected, broadband homes, not
merely homes receiving television in digital format. In our view,
the current preoccupation with digital TV and analogue switch-off
should be a sub-set of a bigger debate about achieving Broadband
Will the Bill encourage and foster competition?
NTL believes that the Government needs to accelerate
the current timetable for regulatory legislation. The UK must
have an economically sustainable competitive media landscape if
Broadband Britain and a truly connected nation are to emerge.
Will OFCOM have the power to bring about "internet
The converged communications industry is a fast
moving sector with product development measured in months not
years. NTL wishes to underline the need for regulation that reflects
the industry's pace. "Snail-pace" regulation serves
only to support the dominant player and gives little comfort to
those seeking to bring alternative options to market.
Will OFCOM be fully converged?
NTL welcomes the move to regulate convergent
sectors under a single body. However, OFCOM itself must be truly
convergedas opposed to five different organisations, bolted
together and working in separate "silos"if it
is to achieve real comprehensive oversight and successful regulation
of the industry.
Will the Bill stand the test of time?
A wide range of communications services, increasingly
with interactive elements, are being accessed through a variety
of mediums with multiple functions. It is in this arena that the
broadcasting and telecommunications sector will find the future.
The major challenge for government to contend with is whether
or not they have produced a set of proposals that will stand the
test of time in a very fast moving environment.
A fair and level competitive playing field is
essential for Britain and the proposed legislation should help
ensure that this is the case in the media and telecommunications
sector. Without competition, commercial choice and pluralism can
be stifled, particularly in the media environment. We believe
that competition is what drove down telephone prices and drove
up quality of service. Competition is what has placed the UK at
the forefront of the rollout of digital TV and competition is
bringing Broadband Britain out of the shadows.
One of the most important lessons from the industry's
recent travails is that it would be an error on the part of the
Government to try to pick a winner in content or platform terms.
This Bill clearly demonstrates that the Government is not going
to be swayed by the short term ills of the sector and will maintain
a strict pro-competition policy and neutrality over platform and
content. This country needs diversity and most of all its needs
an economically sustainable competitive media landscape.
Converged regulation, as personified by OFCOM,
is potentially a very positive and imaginative step forward. The
environment that OFCOM creates will be critically important for
giving the UK the sort of regulatory regime that it needs to retain
its position as the most attractive place for global business
and internationally mobile investment.
Creating OFCOM at this point in time presents
us with an opportunity to produce a better result than we currently
have and to streamline regulatory decision-making. NTL supports
the creation of a cross thinking regulator, bringing together
the strengths of the existing regulators and dropping the biases
which can sometimes produce poor, inconsistent or ill thought-out
decisions. However, OFCOM will be a failure if it becomes a
glorified landlord with five new tenants living side by side under
one roof but not benefiting from living together. For the consumer
to truly benefit form the five regulators being brought together,
the temptation to retreat into silos must be avoided.
We believe that the basic structure proposed,
of a board consisting of executive and non-executive appointees,
is broadly right, given that OFCOM will require a mix of managerial,
technical, economic, legal and policy-making experience. For OFCOM
to be professionally competent we contend that a small, tighter
core of experts at its apex is required. The numbers of appointees,
however, should not become unmanageable. Six board members in
total seem to us to be quite sufficient to provide the necessary
skills mix and balance of views. This is particularly important
when you consider the Secretary of State's reserved powers to
make extra appointments. For the benefit of OFCOM's political
independence, the appointment of extra members to revise existing
members' decisions should be resisted.
OFCOM must be genuinely independent from Government,
adequately staffed with top-quality people, and led with courage
and clear-sightedness. OFCOM should be powerful enough both to
act swiftly and effectively when action is needed, and to be able
to refrain from interfering unless and until action is really
The great danger with broad-ranging body like
OFCOM is that this duty will be subsumed in a wider organisational
brief which includesinevitablyacting as a lightning
rod for explicitly political concerns such as news media bias
or taste and decency. Focusing on the long term avoids the regulator
falling into the trap of short-termist or overtly "political"
decision making. The focus on the long term is crucial for economic
regulator in particular.
Focus on competition
Rightly, the Bill places the delivery of benefits
to consumers at the heart of the functions and duties of OFCOM.
It also makes clear that the principal means by which such benefits
are to be achieved is through the promotion of competitive markets.
Again, we think this is absolutely correct. In particular, we
strongly believe that competitive markets are much more likely
to deliver consumer benefits than markets which are monopolistic,
no matter how tightly regulated the monopoly. There are two reasons
for this: first, experience in the utility sector highlights that
monopolies always have an information advantage over the regulator,
making it very difficult for the regulator to genuinely replicate
the effect of a competitive market (for instance in the setting
of price controls); and second, because the principal means by
which customers will benefit in consumer markets is through product
and service innovation, something which it is notoriously difficult
to promote via regulation.
So OFCOM will need to identify and treat the
causes of consumer problemsthe barriers to entry which
make markets monopolistic, and the abuses which prevent entrants
from capturing market shareand not simply alleviate the
symptoms of monopoly. We emphasise this point because in reality
economic regulation of the telecoms sector is still very skewed
towards the latter. Oftel has many more people handling "soft"
consumer policy issues than it does addressing problems in broadband
markets, for instance.
It would be helpful if the Bill was amended
to describe the duty as promoting the long-term interests of the
consumer, through competition.
Crucially, the series of duties listed in Clause
3 of the draft Bill do not specify any hierarchy. However, it
appears that Clause 4 requires, as far as the discharge of economic
regulation is concerned, that if a conflict arises OFCOM should
give primacy to a separate set of duties imported from the European
legislation recently enacted. Those duties do place the promotion
of competition and efficient markets as the primary duty. It
would be helpful for the Joint Committee to seek clarity on this
point as it would be better to have competition identified as
the primary duty in advance to avoid any future conflict.
There is a significant danger that sector regulation
will get lost in the overall mix of activities within OFCOMa
process likely to be exacerbated, given the high-profile nature
of issues in the broadcast sector. Now that it is suggested that
there will be a Content Board, we believe the case is reinforced
for an Economic Regulation Board as its equivalent, staffed with
appropriate expertise and operating to the required very exacting
timescales and procedures.
We urge the Committee to lend its support
to the idea of a separate Economic Regulation board within OFCOM,
staffed by appropriately qualified people, and to ensure equal
weight to have the same reporting lines as the Chairman of the
Content Board into the Chairman/Chief Executive.
Sector regulation or competition law?
Since full liberalisation, the regulatory debate
in UK telecoms has been to what extent sector-specific regulation
is still justified, as opposed to the transition to generic competition
law alone as a means of policing anti-competitive behaviour.
BT still controls 75 per cent of all residential
call revenues, a £5 billion per annum business. This is remarkable,
given that we have now had some 18 years of competition to BT
in one form or another. BT's continued dominance flows from its
monopoly inheritance of a ubiquitous infrastructure and a captive
customer base. Although competition, particularly from cable,
is chipping away at this dominance, we would like to emphasise
that we see no alternative at this time to continuing to maintain
a considerable body of sector-specific regulation focused on BT
in particular. This is particularly important given that BT is
becoming adept at leveraging the dominance it enjoys in its traditional
markets (eg access, residential voice) into new market sectors
such as internet and broadband. There is simply no case for reducing
the regulatory pressures on BT at this timequite the opposite,
in the case of key strategic issues such as local loop unbundling.
We urge the Committee to reject arguments for
the large scale rolling back of sector regulation, which remains
vital when applied to monopoly players
It follows also that a clear distinction between
sector regulation and competition law functions must be recognised
and maintained. Oftel has tended over the last three years to
increasingly apply competition law tests even when operating under
sector specific regulation. But competition law exists to safeguard
competition in markets which are not necessarily or inherently
monopolistic. The very reason we need a sector regulator is that
the same cannot be said for fixed telecommunications. Simply adhering
to competition policy best practice will not be sufficient in
many casesit will be necessary to go beyond that to explicitly
encourage market entry and nurture entry when it takes place.
The imbalance between economic regulation of platforms
Much of the debate on OFCOM's economic regulation
role assumes that this is simply the carry forward of oftel's
existing role. This is understandable, given the almost complete
focus of current economic regulation on networks and platforms,
as opposed to services. However, it misses a fundamental point.
The recent history of the broadcast sector highlights that it
is ownership of key strategic content which confers market power.
BSkyB has maintained a position of monopoly power in pay TV principally
as a result of its ownership of key sports and movie rights. Similar
problems will arise in the converged media of the future.
However, as the Bill stands, platform operators
with no market power at all will find themselves subject to burdensome
ex-ante regulation whereas companies owning premium broadcasting
rights, Intellectual Property Rights etc will escape relatively
scot-free. BSkyB, for instance, is subject only to very superficial
regulation of its conditional access services. The key issue of
the terms on which its content is made available to rival distributors
is not regulated under any sector statute, and is subject only
to the most cursory scrutiny by the OFT.
In considering this draft Bill, the Committee
should reflect on whether this balance between platform and content
regulation as it stands is correct. Customers continue to suffer
from "rights wars", which lead to content being offered
exclusively on one platform only. In addition, some broadcasters
are adopting proprietary technical standards, which make it difficult
and expensive to re-author their content for different platforms,
even though open interoperable standards already exist.
If the Committee considers that BSkyB's construction
of an unassailable monopoly in key rights is in fact a problem
that OFCOM ought to have a role in policing if not fixingit
might wish to press the Government for clarification on how this
could be brought about.
The Government should clarify whether OFCOM
will be able to look at content and carriage issues under (a)
competition law, and (b) sector specific rules. The Committee
should consider whether the absence of specific obligations on
dominant content providers are needed on the face of the Bill.
Assuming that regulation can be focused on the
right issues, the question then arises of whether OFCOM will have
the tools for the job. We welcome tougher penalties for anti-competitive
abuses. Also, the range of mechanisms and measures inherited from
Europe, and set out in Chapter II, do provide a broadly appropriate
"tool kit" for the regulatorat least as far as
regulation of networks is concerned. Nonetheless, there are still
some problem areas:
processes for identifying and acting
upon anti-competitive behaviour are simply too slow. OFCOM needs
the power to impose interim measures where it is clear that an
abuse is having a detrimental impact on the market. The legal
tests for this need to be sufficiently robust that risk-averse
Government lawyers are prepared to employ them;
there needs to be a remedy for third
parties where a delay on the part of OFCOM in relation to a particular
complaint effectively means that OFCOM has refused to act. There
needs to be a right of appealwith scope for financial compensationwhere
the regulator fails to reach a conclusion on a reasonable timescale;
there is a great temptation for a
monopolist to play the regulatory process to its conclusion in
order to buy time. Penalties need to be structured so as to
discourage time-wasting and vexatious appeals; and
appeals need to be restricted to
prevent vexatious cases, and be carried out in a timely way.
An initial "leave to appeal" procedure is required,
along with specified timescales for conducting appeals.
Not without reservations, we agree with the
retention of Oftel's concurrent powers for OFCOM. One concern
with this is that, as already noted, the application of sector
rules and competition law are not the sameand this is prejudicing
the application of the sector rules. Another concern is that,
judging by the debate on OFCOM structure and functions to date,
it has not been sufficiently recognised how legally and operationally
separate the competition law part of OFCOM will need to be from
the other functional areas of OFCOM. The Joint Committee may recall
that there was considerable doubt raised at the time the 1998
Competition Act was debated. An important safeguard was included
which stated that the sector regulators could only take their
other objectives into account to the extent that the DGFT, with
his discretion tightly circumscribed by the need to adhere to
existing case law and decisions of the European competition authorities,
could do so. This is a very important safeguard and we suggest
that the Joint Committee considers recommending to the Government
that this provision is carried forward into the Communications
Bill. We also believe a functionally separate Competition Act
team should be established in OFCOM, reporting to a board member
with experience in competition law.
However, the extent of the "waterfront"
covered by the concurrent powers to be held by OFCOM is significantly
extended as for the first time, broadcasting will be included
(the ITC does not currently have concurrent powers). Given the
multiplicity of conflicting objectives which OFCOM will face in
respect of broadcasting, the risk of competition cases being considered
on something other than the standard economic assessment is markedly
increased. Therefore NTL would like to see the commitment to ensuring
no inconsistency emerges between case law of OFCOM, OFT and Europe.
NTL's experience of the Competition Act to date
suggests that it is not the panacea some predicted. In particular,
the exceptionally long gestation period of the OFT's investigation
into BSkyB highlights one real problem in the practical application
of competition lawthat we may only reach a conclusion once
the damage has been well and truly done.
The application of concurrent powers should
be focused on a limited number of core, strategic cases, and should
be pursued against identified timescales.
Must carry rules
The Government deserves no more than a half
cheer in respect of the approach to must carry rules set out in
Although it is difficult to comment meaningfully
on this issue when much of the detail is not included on the face
of the Bill, it seems to us that the Committee should consider
what policy objectives the Government is trying to achieve, whether
the proposed rules would be appropriate to those objectives, and
what would be the opportunity costs of this policy.
What are must carry rules for? Must carry rules
are intended to support public service broadcasting. NTL also
supports public service broadcasting, which all other things being
equal provides greater quality and choice for our customers. We
have never been, for instance, against the inclusion of BBC1,
BBC2, IVT1 and Channel 4 in the existing suite of "must carry"
Are the proposed rules appropriate to deliver
on this objective? At the moment there is little or no policy
framework established to determine whether a channel should have
must carry status. The steps taken in the Bill to at least start
to delineate what PSB commitments would mean are welcome, but
do not go far enough as they are not explicitly linked to the
process whereby new commercial channels may be added to the list
of must carry channels in the future. One important point here
is that must carry status should be granted only where the channel
itself contributes to the delivery of PSB. In other words, it
should not be the case that a broadcaster can obtain must carry
status for an entire suite of channels, no matter how commercially
oriented, simply because that broadcaster provides regional programming
on one of its channels.
Rules governing commercial channels' eligibility
for must carry need to be tightly linked to their contribution
to PSB objectives. The implications of granting must carry status
to BBC services needs to be explicitly considered in the process
of determining whether a channel proposal should be eligible for
licence fee funding.
A separate concern is that the entire cable
industry faces must carry obligations, which BSkyB (DTH platform)
does not. The BBC (for example) has to purchase its own capacity
on satellite, and then to add insult to injury, pay a significant
sum of money to BSkyB for conditional access services. The net
effect is that BSkyB does not face any capacity or rationing choices
of the kind which cable faces, and additionally gets a large cash
injection. At present levels of must carry obligation, this is
patently inequitable. Were must carry requirements to expand significantly,
the anomaly would start to become seriously damaging for cable.
Must carry rules should be applied consistently
to all platforms. All platforms should receive payments calculated
on an equivalent basis for carriage of must carry channels.
What would be the opportunity costs of must
carry policy? Capacity on cable networks is finite. Additional
must carry channels can only be carried at the expense of other
services. The capacity which has to be set aside to carry one
digital TV channel would, if allocated to broadband services,
generate approximately £30 million per year.
Must carry carries with it an opportunity
cost: the Government should have a requirement, before imposing
new must carry requirements, to explicitly consider the effect
that this will have on the delivery of other services, including
There was one disappointment in the draft Bill:
the word Broadband hardly featured. Strikingly, for a piece of
legislation designed for a connected world, in which broadband
lies at its heart. Quite simply, broadband changes the rules.
Broadband changes the way the internet works for us and is perhaps
the most important single factor in creating a communicated Britain.
Broadband achievement has been impressive. Following commercial
trials at the end of 1999, today our customer base puts us in
the lead in a market that Oftel recently pointed out has passed
the 500,000 mark.
The new policy environment needs to intensify
support of the investment in access infrastructure, which NTL
embodies, and recognise that this is a vital economic activity
in its own right. Broadband access is more than just a passive
enabler of content servicesit is a fundamental building
block of the UK's national infrastructure and key contributor
to our international competitiveness. If a rapid and effective
broadband market is to be realised further significant action
will be required by government.
However, Broadband policy presents significant
and immediate challenges to government, industry and existing
regulators. The Committee will, of course, be aware that the Government
has set a target for the UK to be the leading broadband economy
in the G7 by 2005. It is clear that, for this to be achieved,
much work is needed over the next three years.
And, we also consider that the broadband challengeif
this is taken to mean the continued expansion of network capabilities
through the introduction of higher bandwidthswill continue
beyond that point. Further investment in infrastructure will be
needed and new services will need to be developed. So this is
an issue which is likely to remain highly relevant throughout
the predicted lifetime of this legislation.
We recognise, and largely agree with the Government's
view that many of the issues that must be addressed in order to
meet this challenge are already being addressed via other routes.
Nonetheless, the absence of any reference to broadband in the
Bill is a puzzling omission.
We are concerned that without explicit duties
in respect of broadband, OFCOM will grant it a relatively low
priority, whatever the rhetoric now. We note, for instance, the
relatively low numbers of Oftel staff currently devoted to broadband
projects. Of course, Oftel could reasonably argue that their duties
do not permit them to allocate more staff to this issue given
their existing functions and duties.
We therefore ask the Joint Committee to consider
recommending to the Government that OFCOM have a positive duty
to promote the development of a competitive market for broadband
access to the new digital servicesthis applies equally
to infrastructure and services.
It is important, however, to avoid a knee-jerk
approach to broadband. Much of the public debate around broadband
continues to assume that broadband is an abject failure, whereas
there are now very encouraging signs of progress in the market,
as a result of cable companies' aggressive pricing of broadband
and BT's (albeit belated) response. We believe that an explicit
duty should continue to encourage the competitive delivery of
broadband as the primary means of developing the market.
We suggest that OFCOM's duty should be to promote
competition and investment in broadband services.
A number of proposals are currently under consideration
for expanding the footprint of broadband. It would be wrong to
rule out innovative ideas for spreading broadband, such as aggregating
public demand. Although leadership for such activities may rest
elsewhere in government, OFCOM should be encouraged to work in
partnership with other parts of government and ensure consistent
OFCOM should have a duty to promote the widespread
availability of broadband services, and to advise and assist government
in the formulation of policies to achieve this objective.
OFCOM needs to focus on broadband content issues
A key theme of our submission has been that
convergence is already happening. In one important respect, however,
the market remains nascent, and that is in the development of
truly unique broadband content. However, we are in no doubt that
this will be the next giant step in the development of broadband,
and something which will start to happen right about the time
that the Bill passes into statute.
This presents two challenges:
how to ensure that content rules
stimulate broadband content development rather than chilling it;
how to ensure that a handful of players
do not end up dominating the broadband content market.
Nowhere are the challenges going to be more
difficult than in finding an appropriate regulatory methodology
for applying content rulesalmost entirely devised with
traditional linear broadcasting in mindto content delivered
via broadband. Whilst NTL would not advocate a free for all as
regards broadband delivered content, it is clear that traditional
regulatory mechanisms, such as top-down codes enforced through
licences, will not work. They will simply drive content creators
outside of the reach of the licensing regime.
Self-regulation has to be the answer, but this
does not mean no regulation. It means service providers should
work to provide customers with the means to make educated choices
and if need be, reject content which they do not wish their families
We have already commented on the need for effective
economic regulation of dominant content providers. As regards
broadband, there is a genuine window of opportunity, in that OFCOM
could be in a position to act ahead of significant dominance problems
emerging, using appropriate sector regulationa luxury not
available to the regulators when BSkyB was creating its dominant
position in pay TV.
At this stage, the key issue is to ensure that
OFCOM is established with these challenges in mind. On the content
regulation side, OFCOM appears likely to have a surfeit of people
with experience of regulating linear broadcasting. But it needs
content regulators who come from an internet and broadband background
to balance the "broadcast" bias and ensure genuinely
new and innovative thinking in this area. Equally, OFCOM will
not start with a basis of expertise in the economic regulation
of content, and this needs to be rectified.
OFCOM should ensure that the content rules
for broadband enabled services are light touch and appropriate
for the medium.
OFCOM should have a remit to address anti-competitive
behaviour by rightsholders or dominant content providers, either
refusing to supply content for broadband purposes or seeking to
discriminate in the supply of broadband content in favour of their
own distribution platforms.