Select Committee on Welsh Affairs Second Report


15.  Memorandum submitted by the Institute of Welsh Affairs

1.  EXECUTIVE SUMMARY

  The National Assembly will be born as Britain enters the age of digital broadcasting. This will present a new range of challenges and opportunities which the National Assembly will wish to consider.

  Broadcasting, and especially television, has played a significant role in the development of Welsh identity in the twentieth century. As Wales has developed more effective means of communication, a clearer sense of identity has grown, and political institutions have developed to meet the challenges which this sets. Television in particular has both fed those developments and responded to them

  There are unique features to the Welsh broadcasting landscape, not least issues of language, culture and topography, which the National Assembly will wish to consider in making representations on issues which affect broadcasting in Wales.

  Wales has great advantages in television production which the National Assembly should encourage through its economic development responsibilities in particular.

  While broadcasting remains a reserved item with responsibility remaining in Whitehall, there are areas of broadcasting policy where the National Assembly could over time assume responsibility without undermining the principles of the proposals set before the people of Wales in the referendum.

  However, it will always be likely that there will be different levels of broadcasting regulation, some in Wales, some at UK level and some at European level.

  The National Assembly should seek to gain an understanding of the broadcasting environment in Wales, and in particular the preferences of viewers and listeners. This information will help the Assembly make judgements inter alia about how best to ensure that its own proceedings are covered in ways which the audience finds attractive.

  The Committee will want to assure itself that preparations for Broadcasting the National Assembly are being planned in such a way as to maximise the effective use of on-line systems. The National Assembly's telecommunications facilities need to be planned alongside the broadcasting arrangements. The National Assembly should be accessible and on-line public access to proceedings—and the ability to conduct a meaningful dialogue between the public and their representatives—must not be handicapped by inadequate telecommunications or technology provisions.

  As far as coverage of the National Assembly is concerned, we hope that the Committee will press the broadcasters to demonstrate how they plan to provide coverage of the National Assembly which facilitates understanding of its proceedings, and encourages an active response from viewers, listeners and surfers.

  To create a climate in which these aspirations might be realised the submission draws attention to six areas of immediate concern which the Committee might wish to address:

    (i)  that the HTV license levy, which has been arbitrarily set, should be substantially reduced to encourage it to extend coverage of Welsh affairs in relation to the Assembly;

    (ii)  that all the broadcasters in Wales should be encouraged to collaborate to create a dedicated digital space for a separate English language public service channel for Wales;

    (iii)  that the BBC should be properly funded through the Licence Fee settlement to enable it to fully reflect the new civic challenges that will come as a result of the creation of the National Assembly and the changes brought about generally in the UK as a result of devolution;

    (iv)  that S4C should continue with sufficient funding to enable it to produce the necessary critical mass of Welsh programming;

    (v)  that, pressures from network schedulers notwithstanding, all the broadcasters in Wales should be encouraged to collaborate on their scheduling in order to maximise the Welsh audience;

    (vi)  that all the broadcasters in Wales should be encouraged to collaborate on a project to raise awareness and debate in Wales on the future of broadcasting.

2.  INTRODUCTION

  The Welsh Affairs Committee's decision to hold an inquiry into Broadcasting in Wales and the National Assembly could not be more timely. It is not simply that the creation of the National Assembly provides a new dimension for the discussion of broadcasting policy in Wales. Nor is it the broadcasting challenge facing broadcasters in terms of the need to provide resources to cover a new institution. The National Assembly comes into existence at a time of revolutionary developments in broadcasting driven by digital technology. That coincidence of timing offers real opportunities to the National Assembly. The National Assembly will be one of the first new democratic institutions of the digital age. The technology offers real opportunities to create new ways of relating the National Assembly to its viewing public. At the same time, the power and potential of the technology provokes many questions about the relationship between broadcasting and the public, many of which are unlikely to be resolved for many years. Above all, the creation of digital technology means the end of the spectrum scarcity which has dogged broadcasting, and particularly television, in its first half-century. In theory, we can have as many channels as we like. No longer do we need to think of just one Welsh-language channel for example. An English-language channel dedicated to Wales is now entirely feasible. The digital age should mean an end to "opt-outs" for Welsh broadcasting.

  In the twentieth century, broadcasting has become the main vehicle through which nations and whole societies see themselves. Broadcasting has allowed communities far distant from one another to develop understandings of each other not possible before this century. It has shaped the understanding of what it means to be, and experience being, British. Radio provided the means of holding together, educating and communicating to the nation at war. The development of television, largely post-war, has been marked by a range of shared experiences, from the Coronation to the death of Diana, Princess of Wales. As Professor Stuart Hall has said of the BBC in its earliest days "far from the BBC merely `reflecting' the complex make-up of a nation which pre-existed it, it was an instrument, an apparatus, a `machine' through which the nation was constituted...The BBC as a national-cultural institution was one of the principal means by which `the nation' was produced as a symbolic unity out of its many differences, conflicting identities and diversities." [3]

  In Wales specifically, as the historian John Davies has written, "broadcasting has played a central role, both positive and negative, in the development of the concept of a national community." [4]It is possible to argue that the development of television broadcasting in Wales and the achievement of greater democracy in Wales have grown up alongside one another. The Council of Wales was established in 1948. BBC Television arrived in Wales between 1949-51. The Ministry of Welsh Affairs was established in 1951. Commercial TV was receivable in Wales in 1956. BBC Wales was launched in 1964: so was the Welsh Office. After the failed devolution referendum of 1979 came the launch of S4C in 1981 and then a wide range of quangos created during the early 1980s to extend decision-making in Wales, though not its accountability. Digital broadcasting comes to Wales in 1998, and the Assembly in 1999. Of course, it is possible to force these parallels too far. But it provides some evidence of the increasing development of a meaningful concept of Wales being given some shape by the broadcasting institutions which serve our country, and the need of elected politicians to find some form or forms of public administration which respond to that concept.

  In relation to the press broadcasting has been disproportionately important in Wales in helping to shape a sense of a national community, particularly when compared with Scotland, which has a more clearly defined "national" press. Only 10 per cent of Scots buy morning newspapers produced outside Scotland: 87 per cent of Welsh people buy daily morning papers produced in London. This does not mean that there is complete consistency in broadcasting and particularly television consumption in Wales: again, 40 per cent of the Welsh population live in areas of Wales where broadcasting transmitters overlap with England, whereas only 2.5 per cent of Scots do so.

  British broadcasting grew up largely through a centralised institution, the BBC, and much of the history of Welsh broadcasting has been the history of campaigns for increasing autonomy for Wales, from the achievement in 1937 of a specifically Welsh Region of the BBC with its own wireless frequency to the creation of BBC Wales as an entity in 1964, the emergence of HTV Wales in the late 1960s, and the successful launch of S4C in 1981.

  Wales has some unique features in its broadcasting landscape. Notably, the existence of two publicly funded public service broadcasters, BBC Wales and S4C, a third commercial broadcaster operating as a public broadcaster due to regulation, HTV Wales, two official languages, and a terrain that requires fairly complex transmission arrangements. The issues of language and reception have been constants in the broadcasting debate in Wales over 70 years.

  It is true to say, as the Controller of BBC Wales, Geraint Talfan Davies, has argued, that "if we were not a bilingual nation we would be weaker in broadcasting than we are" (Annual Lecture to the Celtic Film Festival, 1996). Language has been one of the key reasons why Wales has been able to argue for additional resources for broadcasting: the terrain has determined additional resources for transmission.

  The specifically unique features of the broadcasting environment in Wales mean that it is perfectly possible to argue for devolution of broadcasting to the National Assembly for Wales. No matter how technically difficult, and we will return to this, it is feasible to envisage a system in which many aspects of broadcasting are devolved to the National Assembly. It is likely that the National Assembly will grow to take more and more of an interest in broadcasting policy, and that consequently we will, over time, see decisions over a wider range of issues connected with broadcasting policy being taken in Wales.

3.  THE REGULATION OF BROADCASTING

  Regulation of television and radio broadcasting operates within a range of laws and regulations determined at UK and European level, and is governed by a myriad of statutory bodies. These include the Broadcasting Standards Commission (BSC), the only organisation within the regulatory framework to cover all radio and television. The BSC's three main tasks—as laid down in the 1996 Broadcasting Act—are: to produce codes of practice on "standards" and "fairness"; adjudicate on complaints; and monitor and report on standards and fairness in broadcasting.

  The Radio Authority (RA) oversees all non-BBC services and licences and regulates all independent radio services, national, cable, satellite and restricted services (the latter includes short-term, special event radio and highly localised permanent services, like hospital radio). The RA is responsible for monitoring the performances of licensees and to regulate programming and advertising, with the power to apply sanctions to rule-breakers. RA Board members are appointed by the Department of Culture, Media and Sport and its operating costs are met by annual fees paid by licence holders.

  Commercially funded television services in and from the UK are licensed and funded by the Independent Television Commission (ITC). Its "Programme Code" aims to ensure "quality and diversity" in programme content and the ITC publishes an annual review commenting on the performance of its licensees. The terms of HTV's licence includes a commitment to producing a minimum number of hours of programming specifically for Wales. The ITC has a regional Office in Wales (Cardiff) and a Viewers' Consultative Council for Wales (whose role is purely advisory), and a Commission member who represents Wales. The ITC works with other regulatory bodies when considering licence applications. For example, bids are assessed for "technical acceptability" in conjunction with the Office of Telecommunications (OFTEL) and the Department of Trade and Industry (DTI). Part of the ITC's remit is to identify areas for new local delivery services and to advertise and assess franchise bids. Its income derives mainly from fees paid by licensees, while Commission members are government appointees. Recently, the ITC was given responsibility to establish Digital Terrestrial Television, which will feature services provided by the BBC, HTV and S4C.

  The BBC—as a public service broadcaster - operates under Royal Charter; the current Charter, awarded in 1996, runs for ten years. The government have recently announced that the licence fee will remain in place for the duration of the Royal Charter. Broad policy guidelines are laid down by the Board of Governors (appointed by government), with day-to-day decisions taken by the Executive Committee and Board of Management. The Governors' responsibility for programmes is shared, in Wales, with the Broadcasting Council for Wales, which advises the Board on programmes and services. There is a BBC National Governor for Wales who sits as a member of the Board of Governors.

  S4C is accountable to the seven member Welsh Fourth Channel Authority which monitors management and programme policy. Authority members are central government appointees. The Welsh Fourth Channel Authority was established by statute. Its aims are set out in that statute and its level of funding is fixed by statute, and is set out in the Departmental Budget of the DCMS. Viewer feedback on S4C output includes audience research, running a "Viewers' Hotline" and holding public meetings at various locations around Wales.

  Additionally, there is a significant European dimension. The overall framework for a single market in broadcasting was laid down in the European Union's Television Without Frontiers Directive of 1989. This directive was updated in 1997, in part to take account of developments in digital technology. The 1995 Advanced Television Transmission Standards Directive set out elements of a regulatory framework for digital decoder boxes and influenced the drafting of aspects of the Broadcasting Act 1996. Copyright regulation has developed through a variety of directives and there are current proposals for a new Directive in this field. A significant agenda relating to the development of The Information Society has been developed over the last five years sponsored by Commissioner Bangemann, culminating in the December 1997 Green Paper on Convergence, recently followed up by an Action Plan. EU Competition Policy sets out the framework within which issues of media concentration, vertical integration and related matters may be addressed. There has also been a continuing debate since 1992 on the possibility of a directive on media concentration. The 1997 Amsterdam Treaty includes a Protocol on Public Service Broadcasting. This recognises the positive role of Public Service Broadcasters in every Member State and the competence of national governments in defining their remit. Their public service mission would have to be taken into account by the Commission and the Courts when applying the Treaty of Rome in relation to the funding of public service broadcasters. In short, at least four EU Directorates have a significant input to the making of policy affecting broadcasting: DG IV (Competition); DG X (Information); DG XIII (Telecommunications); DG XV (Internal Market), and several European Parliament Committees are actively involved in the relevant debates.

4.  THE IMPACT OF DIGITAL TECHNOLOGY AND CONVERGENCE

  In its 1997 Green Paper, the European Commission defined convergence as both "the ability of different network platforms to carry essentially similar kinds of services" and "the coming together of consumer devices such as the telephone, television and personal computer". The Green Paper notes the development of industry convergence, underpinned by the tendency for operators in one element of the value chain to seek to move into other areas in partnership with players from different elements of the value chain. This industry convergence is a response to the technological convergence.

  The Commission notes a number of changes to the different markets sectors where digital technology is having an impact:

    —  new programme services;

    —  telecommunications liberalisation and wider choice;

    —  new Internet-based services;

    —  mergers and alliances reshaping existing industries;

    —  competition policy: the need to keep (new) markets competitive.

  The Commission states that convergence will be at the heart of growth, competitiveness and job creation in the EU. It notes the development of a changing pattern of consumption with consumers increasingly spending time with PCs and Internet services previously devoted to TV. [5]

  The British government's Green Paper Regulating Communications: approaching convergence in the Information Age notes that "The Information Age products and services supply sectors are already making a major contribution to UK growth and competitiveness".[6]

  Digital technology challenges this regulatory framework at least to justify itself. Digital technology blurs the boundaries between broadcasting, telecommunications, information technology and publishing. As the Government notes "Convergence challenges the current regulatory framework in three key ways." These include pointing up overlaps and gaps in regulation; pointing up internal inconsistencies in regulating different media; and pointing up different burdens of regulation for different services.

  In broadcasting, the new developments mean that new services are increasingly regulated by bodies which formerly were seen to be relevant to other sectors such as telecommunications. For example, OFTEL is now an important player in the regulatory field for broadcasters, laying down standards for regulation of conditional access systems and electronic programme guides and for ensuring effective competition.

  Changes in the regulatory environment caused by the development of digital technology (but which could to an extent have occurred in the analogue environment through cable and satellite transmission) also involve a shifting of geographic boundaries. Viewers in Wales will be able to view services from BBC Scotland and BBC Northern Ireland on digital satellite, and viewers in Scotland, Northern Ireland and England will be able to view BBC Wales' programmes. S4C will also be viewable over the whole of the UK. And Channel Four will henceforward be received in Wales on digital services. (It is already receivable on cable and some terrestrial homes choose to tune to receivers to obtain C4). Welsh viewers can of course already receive broadcast services on the Internet or from international satellites, as well as cable. The multichannel universe already exists in Wales, with 28 per cent of Welsh homes receiving cable or satellite services in 1997. [7]This has interesting consequences. Already, in Cabletel homes in Cardiff, S4C is in fact S98C: it cannot be obtained on button four: instead, it is available on cable channel 98. The digital revolution confirms what has been true for some time. There is no such thing as a solely Welsh audiovisual sphere.

  Meanwhile, broadcasters who have largely been self-regulating will in future find that some of their services are licensed/regulated by other bodies. The BBC has already experienced this with its commercial channels: now S4C, through its involvement as a shareholder in the digital multiplex operator, SDN, and as a digital channel operator, faces a similar experience. There is now no broadcaster wholly regulated in the Principality. All broadcasters are subject to UK and EU legislation, and accountable to UK-wide regulators. Given the international nature of most distribution services, this is likely to be the case in the future.

5.  WELSH BROADCASTING AND THE ECONOMY

  Wales has a significantly-sized broadcasting sector given its share of the UK population. Cardiff is the biggest media centre outside London. There are something like 100 independent production and facilities companies in Wales, several independent radio stations, and important telecommunications companies such as BT and Cabletel investing in services related to broadcasting, as well as the traditional broadcasters BBC Wales, HTV and S4C. Multi-media companies are an important and developing source of investment in Cardiff Bay. The Welsh Office Economic Strategy Pathway to prosperity: A New Economic Agenda for Wales has drawn attention to the importance of Wales's media and cultural industries as potential job-creators and as a skills-base for attracting significant inward investment. [8]

  However, there are significant problems in the independent sector, in terms of developing the ability of companies to find a diverse source of work and revenue. Sgrin, the Media Development Agency for Wales, is undertaking this task with the support of the Welsh Development Agency. The new WDA should ensure that this work is a priority for the organisation.

  The essential issue in Welsh broadcasting in the digital age will not be the availability of channels. Digital technology provides the capacity for a wide range of channels and other services. The real issue will be content, and the ability—including resources—to fund an expanded range of programme content. This presents a challenge for the existing broadcasters, in a world in which talent costs and costs of rights (for example, for sports) are increasing significantly, at the same time as they have more channels to fill. For Welsh broadcasters, operating in an economy with a GDP below the UK average, with a consequent impact on advertising and subscription revenues, this presents a real challenge. The bid by HTV to renegotiate its licence fee will be an important test of this argument.

  Wales does have the major benefit, unavailable in other regions or nations of the UK, of two public service broadcasters funded from different sources of finance. This has been a prime factor in the growth of the production sector in Wales, and in part explains the strength of Cardiff as a media base. In a broadcasting world facing severe financial pressures, we believe that the National Assembly will see it as imperative that there is real cooperation and greater coordination between Wales's two public service broadcasters, rather than competition.

6.  THE WELSH AUDIENCE

  When it comes to media policy, the first task for members of the National Assembly is going to be to gain an understanding of how the digital environment is likely to impact on Wales, and what Welsh viewers and listeners want to see. Consumer research appears to suggest that Welsh viewers want a diverse range of programmes: we know that they would like to see more programmes from and about Wales, but they do not want to be cut off from the rest of the UK in their viewing habits. They want to be able to watch Coronation Street, Eastenders, Birds of a Feather, or share in the UK News or watch Premier League Football. They also enjoy hit programmes from overseas.

  Digital will certainly change the ecology of broadcasting in Wales, though how far it will do that is too early to say. What are the implications if S4C begins English language services? Will the difference of linguistic spend on television programmes made in Wales be addressed? As things stand a far higher share of public and private funding for TV production in Wales goes on programmes made in the Welsh language. This should be addressed, but not at the expense of Welsh language broadcasting. S4C should continue with sufficient funding to enable it to produce the critical mass of Welsh programming. Given the small size of its potential audience, for S4C to produce Welsh language programmes of sufficient quality to compete with the other channels, will never be a commercially viable operation. Subsidy of the kind that has enabled S4C to thrive will be necessary whatever governance arrangements may in future develop.

  The health of Welsh broadcasting will depend largely on the preferences of its young. For children in multichannel homes in Wales viewing is likely to include Nickolodeon or Cartoon Network—and increasingly, Sky One, with its early opportunity to view new series of The Simpsons, The X Files and Friends—as well as the BBC, HTV or S4C. How is the new generation using the new technologies? Kids in Wales are already up to speed with the Internet, sending e-mail from Cardiff to California. Primary school pupils in Cardiff have established Roath Village on the World-wide Web with their elders, telling the story of their area through multi-media technology. There are also Welsh language school sites, like that for Ysgol Treganna, also in Cardiff. This is a generation which may demand more of its broadcasters than others before it: the right to interact directly with programme services, as we move from a generation of couch potatoes to one of mouse potatoes.

7.  THE NATIONAL ASSEMBLY AND BROADCASTING: THE GOVERNMENT'S POSITION

  The government's approach to devolution has been in essence to ensure the transfer of the vast bulk of the existing powers of the Secretary of State to the Assembly, plus the granting of the power to amend the quangos. Since Labour's policy documents in Opposition there has been a supposition that appointments to broadcasting bodies of representatives from Wales will be an issue on which the Assembly would express a view, and this was confirmed in the White Paper, A Voice for Wales, and in debates on the Government of Wales Act in its passage through Parliament. The general responsibility for broadcasting will still, however, remain with the Secretary of State for Culture, Media and Sport and his department.

  The Secretary of State set out the government's view on this at the Commons Committee Stage of the Government of Wales Bill. He told the Commons that "there will be a general power to debate, and that will extend to make representations". The National Assembly would have the power to invite representatives of broadcasting-related institutions to give evidence, though not to summon them. An order would be introduced under secondary legislation specifying that the Assembly must be consulted on appointments of members of the S4C Authority and the BBC Governor for Wales by the Secretary of State for Culture, Media and Sport. The concordat to be agreed with the Department of Culture, Media and Sport would also cover broadcasting.

  There are areas of the Secretary of State's statement which require clarification, especially when seen against the statements which have been made by Scottish Office Ministers.

  First, the Secretary of State did not refer in his speech to the position of the ITC representative from Wales. However, in debates on the Scotland Bill the Secretary of State for Scotland made it clear that there would be consultation with Scottish Ministers over the appointment of the Scottish ITC representative. We therefore assume that the Assembly will be consulted on the appointment of future ITC representatives.

  Second, it is not clear to what extent Assembly members will be consulted on appointments to other broadcasting-related organisations. The Secretary of State for Scotland said that there would be consultation over the appointments of Scottish members of the BSC and the Radio Authority.

  Third, it is understood that the BBC Annual Report will be laid before the Scottish Parliament (and we assume the ITC Annual Report). No similar statement has yet been recorded publicly for the National Assembly.

  Fourth, the existing anomaly concerning the relative positions of Gaelic Broadcasting and Welsh language broadcasting is perpetuated post-devolution. Gaelic broadcasting funds are already part of the Scottish block so they will be transferred to the Scottish Parliament. Funding for S4C is still held centrally, even though the amount of the funding is determined by statute.

8.  ARGUMENTS FOR DEVOLVING BROADCASTING TO THE NATIONAL ASSEMBLY

  The following arguments which have been advanced for devolving broadcasting to the National Assembly largely focus on specifically Welsh factors which require resolution in Wales. These include:

    —  the language issue;

    —  distinctive cultural issues;

    —  analogue reception problems.

  It is also frequently argued that Wales needs a voice in issues such as:

    —  delayed digital roll-out and reception problems;

    —  local franchise allocations in radio and cable and independent television.

  Finally, it is often suggested that broadcasting institutions are not sufficiently accountable to Wales or do not take Welsh interests into account.

  Amongst proposals which have been put forward have been:

    —  Transferring S4C to the National Assembly.

    —  Granting S4C additional revenue from taxation.

    —  Co-ordinating English language channels.

    —  Holding accountable institutions like the Broadcasting Council for Wales.

    —  Dealing with reception problems.

    —  Ensuring digital terrestrial coverage.

    —  Power to pressure Westminster.

    —  Allocating licences.

    —  Setting objectives or developing a blueprint for the media.

    —  Taking over Sgrin.

    —  Creating a Welsh Broadcasting Authority.

    —  Creating a Media Register.

    —  Reviewing the financial resources available to the Assembly.

    —  Collaboration between public broadcasters.

    —  Development of independent producers.

  We said above that there was a case for devolving broadcasting to the National Assembly, no matters how difficult in technical or policy terms, but that it was unlikely that broadcasting would ever be fully devolved. However, structures for broadcasting do not have to be administered on a UK-wide basis. While there would be an overriding concern to avoid political control of the media and to preserve editorial independence, that could be dealt with through arms-length institutions given specific tasks by the National Assembly. Nor is size an issue. A country such as Ireland, not that much bigger than Wales, administers its own broadcasting system. There are other examples in Europe and its regions. While it is essentially true that it is not clear to what extent satellites and the digital revolution observe the boundary between Wales and England, it is not in principle impossible to envisage a system of regulation which allocates certain frequencies within the UK to particular regions, rather than to UK-wide channels. The real test should be what works and what extends choice for the audience.

  On a practical basis, "devolving broadcasting" could mean many things. Broadcasting is subject to a variety of laws and regulations in various fields. It would be possible to distinguish between cross-border bodies and institutions and others wholly managed within Wales. However, that could set up unfortunate distinctions and contradictory rules. Existing regulatory structures governing broadcasting, including its delivery across telecoms services, already range across a variety of regulators, even without including Europe, as the table below shows.


Content
Regulation
System
Regulation
Competition Sponsorship

Telecom servicesDTI/ Home Office (obscenity); ICSTIS (self-regulation) DTI/OFTELDTI/OFTEL/

OFT/MMC
DTI
Telecom Suppliers DTI/OFT/MMCDTI
Conditional Access Systems and Electronic Programme Guides DTI/OFTELDTI/OFTEL/ OFT/MMC
OFTEL/ITC (shared on EPGs)
DTI
TVDCMS/ITC Home Office (obscenity) BBC/S4C BSC DTI/OFTEL/ RA/DCMS/ ITC/OFTELDTI/OFTEL/M MC/ITC DTI (hardware) DCMS (programme production/broadcast services)
RadioHome Office (obscenity) BSC BBC DTI/OFTEL/ RA/DCMS/ITCDTI/OFTEL/ OFT/MMC/DC MS/RA DTI (hardware) DCMS (Production and broadcast)
Film and VideoHome Office BBFC DTI/OFT/ MMCDTI

DCMS


  Adapted from table in DCMS. Regulating Communications: approaching convergence in the information age. London. July 1998.

  It is perhaps not surprising that the Government is consulting on the form and content of regulation. This is an area in which the National Assembly will need to grow its level of understanding.

  Nevertheless, it is possible to see a number of areas of broadcasting policy which could in due course be devolved to Wales, within the current framework for devolution approved in the 1997 Referendum (that is, without tax-raising or law-making powers):

    —  Responsibility for funds used for Welsh language television programme-making, currently devoted to S4C, transferred from the Department of Culture, Media and Sport to a Welsh Broadcasting Authority accountable to the National Assembly.

    —  Responsibility for making appointments of the BBC Governor, the ITC Representative, and all members of the Welsh Fourth Channel Authority, and

    —  Other relevant bodies (either to be held by the Assembly or its Executive Committee).

    —  Implementation of all 1990 and 1996 Broadcasting Act responsibilities of Welsh Fourth Channel Authority transferred: S4C Annual Report laid before the National Assembly as well as the UK Parliament.

    —  BBC Annual Report and BBC Wales Annual Report to be laid before the National Assembly for debate.

    —  ITC Annual Report to be laid before Assembly for debate.

    —  Power to summons UK-wide bodies such as BBC Governors and OFTEL to give evidence.

    —  Additional Welsh representation on regulatory bodies where no "territorial" representation currently exists, eg OFTEL appointed by the Assembly or its Executive Committee.

    —  Full accountability for the Arts Council, meaning a greater say in film funding and for Sgrin.

  The major issue in this area is likely to revolve around whether responsibility for the funding of S4C should be devolved unilaterally as it were to the National Assembly. This prospect has already been raised in some political quarters, for example by Conservative Party spokespeople in Wales. Our view is that it would be anomalous to devolve just one part of the broadcasting system in this way. Responsibility needs to be taken in the round. This is especially the case where the arguments for an English language channel dedicated to Wales are concerned. As argued below, there is a strong case for all the broadcasters in Wales to collaborate on producing such a channel. This will not be made easier if government funding and regulation responsibility for the broadcasters is split between different tiers of government.

9.  THE POSITION OF HTV WALES

  The case being made by HTV Wales for its annual £23 million levy to be substantially reduced should be supported. The levy was imposed in an entirely arbitrary way. The amount was dependent upon competitive bids. In some areas where there was no effective competition for the franchise the levy that resulted was negligible. In Scotland, for example, where STV was the only bidder, a token £2,000 was offered and accepted.

  This is not just a commercial matter, HTV is operating in Wales with one hand tied behind its back. The whole Welsh community is thereby disadvantaged. In the new situation post-May 1999, when the National Assembly is underway, the case is even stronger for HTV to be encouraged to extend its Welsh programming, especially in relation to coverage of the National Assembly, by having its levy substantially reduced. Such a reduction should be tied specifically to an extension and improvement of Welsh programming.

  HTV is facing a number of significant commercial issues. The Channel 4 rebate that HTV receives due to its advertising revenue exceeding an agreed threshold, is coming to an end. It was set out in legislation at the time of the original competitive bid and will amount to an excess of £4 million in 1998. In addition, HTV, as part of a federal structure, has had to commit to a significant increase in the ITV UK programme budget, the cost of this being several million pounds to the company. By themselves these issues provide an argument for HTV to have its levy reduced. The need, and HTV's desire to improve its service to viewers in Wales in response to the coming of the National Assembly adds qualitatively new weight to the argument.

10.  THE CASE FOR A DEDICATED ENGLISH LANGUAGE CHANNEL FOR WALES

  An English-language channel dedicated to Wales is now entirely feasible. As stated in the Introduction, the digital age should mean an end to "opt-outs" for Welsh broadcasting. There is now plenty of space to create an English language channel specifically for Wales. It is anomalous that English language television should not have this in the digital age. Digital terrestrial broadcasting already supplies 30 channels and digital satellite 140. It seems that every conceivable minority interest will be catered for except the majority viewing interest of the English speakers in Wales.

  It may be argued that in the new digital world there will be the opportunity to be guided to English-language programmes of interest to Welsh viewers on one or other channel at most times of the day. However, unless you have a dedicated channel you don't have the freedom to schedule programmes, and especially news and current affairs, according to the requirements of the Welsh agenda, or at times specifically designed for the audience in Wales. Without a dedicated channel, the continued provision of Welsh programming will necessarily be in the form of opt-outs from channels whose primary remit is to serve a much wider audience. This means that the scheduling of English language Welsh programming will necessarily continue to be subject to requirements outside the control of Welsh broadcasters.

  The provision of such a channel could, in theory be undertaken by any of the broadcasters. As the lead public broadcaster BBC Wales might be thought the most appropriate organisation to take the lead in this direction. It has set something of a precedent by establishing an opt-out Welsh slot, between 10pm and midnight, on the new UK BBC Choice channel. This should be regarded as a useful staging point in progress to a new channel specifically targeted at the English speaking Welsh audience.

  It could also be open to HTV Wales to take an initiative, along the lines of Scottish Television which is planning a dedicated digital channel for Scotland. However the large size of the levy currently imposed on HTV, a levy we argue below should be reduced, means that it is unlikely to contemplate by itself the investment that would be involved.

  Meanwhile, S4C already have the available digital space that would be needed to establish a channel. The 1996 Broadcasting Act allocated S4C digital capacity in Wales on a par with other broadcasters, technical developments since then mean that this capacity allows it the possibility of delivery of more than one channel.

  S4C was guaranteed access to half a multiplex—a bonding together of broadcasting space sufficient to carry at least two channels—for public service purposes. In addition it applied to run the whole of that multiplex in association with two partners—NTL Communication and United News and Media (owners of HTV). Each of the three organisations have a third share in the multiplex. Of S4C's two channels, S4C1 will carry S4C the programmes seen on the current analogue channel, plus additional Welsh language programmes to fill out a large part of the space vacated by Channel 4. This will leave sufficient capacity for one extra channel from Wales to be provided.

  S4C's intention is that the spare channel should allow the possibility of a second service from Wales, with public service objectives, based primarily on production of Welsh origin, and allowing the opportunity of developing an English language service from Wales. In the first instance S4C has indicated its willingness for this airspace to be used for broadcasting of live coverage of the National Assembly and for additional broadcasts by the Welsh Digital College.

  S4C has stated that they do not have the resources at present to develop this service much further. However, it has declared that if their other commercial activities are sufficiently successful in delivering profits, then the development of such a service is an objective to which they would like to contribute. In any event, they have stated that they are not planning to develop the service beyond Assembly coverage and the Digital College before 2001.

  There is an open door here for all the programme producers and broadcasters in Wales to come together to see if they can find ways of using this digital space to create a dedicated English language channel for Wales. We already have the precedent with S4C of programmes from a variety of sources—BBC, HTV and independent producers—being scheduled together to produce a dedicated Welsh language channel for Wales. We believe that this should be a precedent for the broadcasters to do the same so far as a dedicated English language channel is concerned.

  However, S4C need not form a precise model for the creation of an English language channel for Wales. There should be a clear separation between ownership of the spectrum and editorial management of any channel which could be jointly in the control of all those participating. It would be inappropriate for the management of an English language channel for Wales to be largely in the hands of the Welsh-speaking community who already have ownership and management of S4C.

11.  COVERING THE NATIONAL ASSEMBLY

  Welsh broadcasters appear to have taken the onset of the National Assembly very seriously, and have been involved in discussions with the Welsh Office on a range of issues including both policy technical matters connected to the broadcasting of the National Assembly. It is not our role in this paper to second guess the broadcasters. However, we wish to set out some of the ways in which we believe that the National Assembly could be brought to the homes of viewers, listeners and surfers.

  We are aware of concerns expressed by broadcasters about camera positions, cabling and other matters and hope that these are fully addressed by the Welsh Office.

  We hope that now a new site has been chosen for the National Assembly building, steps will be taken to ensure that it is effectively equipped for the digital age.

  As far as coverage is concerned, in principle, we hope that viewers and listeners will have access to unmediated live and as live coverage of the National Assembly and its specialist committees, and that broadcasters will in due course be able to make the most effective use of the digital spectrum to facilitate this. We hope that there will be space on analogue services to cover a wide range of Assembly output on both radio and television. We also hope that National Assembly coverage will be carried on broadcasters web-sites, or that the National Assembly has its own web-site featuring live coverage.

  Digital services will not reach a clear majority of the population for some time, and it is important that we do not create an information rich and information poor division in Wales. It will be important for viewers and listeners to find coverage of the National Assembly within the ordinary analogue schedule. This might include:

    —  late night summary programmes/early morning "Yesterday in the Assembly" programmes;

    —  extended news reports in news bulletins and magazine programmes;

    —  expanded opportunities for political comment;

    —  dedicated party political broadcasts for Wales;

    —  programmes dedicated to committee coverage;

    —  phone in programmes for Assembly Secretaries.

  We hope that in due course there will be regional opt-out coverage of the different regional committees, so that local communities can tune directly to their own Committees.

  We also believe that it is important that a new British political institution such as the National Assembly should be explained to the audience in England, Scotland and Northern Ireland as well, and should be featured within national network political programmes.

  We welcome the suggestions by the National Assembly Advisory Group that the Assembly should utilise the latest technology. We also welcome the commitment given by Ministers that this will be the case. We are aware of a research project being undertaken by the Institute of Public Policy Research which is examining how the public might be drawn more directly into dialogue with the National Assembly and its members, to ensure that Wales becomes a full-fledged "Digital Democracy", and look forward to seeing the results of this work. As a minimum, we would expect to see the National Assembly "Hansard" available on-line with effective search machines; National Assembly members to have publicly available e-mail addresses; and the opportunity for direct links to schools and colleges. We believe Assembly Secretaries and the First Secretary should be available from time to time to participate in electronic "town hall" type activity, with on-line public question-times.

  We hope that the broadcasters will play an active role in helping to shape understanding of the National Assembly in advance of the elections next May, and will help explain the new electoral system that will be used.

12.  MAIN RECOMMENDATIONS

  Broadcast coverage will be an important vehicle for the National Assembly, and it is important that the Assembly establishes an effective relationship with the broadcasters from the outset. The National Assembly will need to develop its own understanding of the conditions affecting broadcasting in Wales, and establish its own relationships with the regulators, as UK regulatory policy in this field comes under scrutiny. Clearly there are areas of media policy which could, in theory, be regulated in Wales. Equally clearly, there are matters that need to be dealt with at UK or European level. The National Assembly will want to express a view on the roll-out of digital transmission in Wales. It will want to consider how best to support and strengthen Wales's content-generators, including the independent producers, ensuring that they are able to build up their businesses and generate employment.

  There are some immediate areas of concern which the Committee might consider, as follows:

    (1)  The case being made by HTV Wales for its annual £23 million levy to be substantially reduced should be supported. The levy was imposed in an entirely arbitrary way. The amount was dependent upon competitive bids. In some areas where there was no effective competition for the franchise the levy that resulted was negligible. In Scotland, for example, where STV was the only bidder, a token £2,000 was offered and accepted. This is not just a commercial matter. HTV is operating in Wales with one hand tied behind its back. The whole Welsh community is thereby disadvantaged. In the new situation post-May 1999, when the National Assembly is underway, the case is even stronger for HTV to be encouraged to extend its Welsh programming, especially in relation to coverage of the National Assembly, by having its levy substantially reduced. Such a reduction should be tied specifically to an extension and improvement of Welsh programming.

    (2)  All the broadcasters in Wales should be encouraged to collaborate to create a dedicated digital space for a separate English language public service channel for Wales. In a multi-channel world a dedicated spectrum place for Wales in the English language—to complement S4C's work in the Welsh language—is necessary as well as desirable. At a time when niche channels are being developed or launched to cater for every conceivable interest, the case for an English language channel for Wales is unanswerable.

    (3)  The coming of the National Assembly means that extra responsibility will be placed on all the broadcasters to reflect the new civic context in Wales. This is especially the case with the BBC as a leading public service broadcaster in both languages. The BBC should be properly funded through the Licence Fee settlement to enable it to fully reflect the nations and regions of the UK.

    (4)  S4C should continue with sufficient funding to enable it to produce the necessary critical mass of Welsh programming. Given the small size of its potential audience, for S4C to produce Welsh language programmes of sufficient quality to compete with the other channels, will never be a commercially viable operation. Subsidy of the kind that has enabled S4C to thrive will be necessary whatever governance arrangements may in future develop.

    (5)  Despite the pressures of the ITV and BBC networks, all the broadcasters in Wales should be encouraged to organise their scheduling in order to maximise the Welsh audience for Welsh programmes.

    (6)  All the broadcasters in Wales should be encouraged to collaborate on a project to raise awareness and debate in Wales on the future of broadcasting.

John Osmond

Director

15 October 1998





3  Stuart Hall, "Which public, Whose service", in Wilf Stevenson Ed, All Our Futures, BFI, London 1993. Back

4  John Davies, Broadcasting and the BBC in Wales, University of Wales Press, Cardiff, 1994. Back

5  European Commission, Green Paper on Convergence, Brussels, 3 December 1997. Back

6  DCMS, Regulating Communications: approaching convergence in the information age, London, July 1998. Back

7  Source: S4C 1997 Annual Report. Back

8  Welsh Office, Pathway to Prosperity, Cardiff 1998. Back


 
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