Memorandum submitted by Lord Gordon of
Strathblane
My main disagreement with the Committee's finding
is set out as a footnote on page 87 of the Report. In the interests
of collegiality I kept my dissent to a minimum and it might be
helpful to the Committee to expand a little on the background
to my thinking.
I do not regard the BBC as the sole source of
public service broadcasting in this country. There are other ways
of ensuring public service broadcasting, by regulation from private
sector providers, without relying on huge expansion in the scope
of activity of the BBC which carries its own anti-competitive
dangers within it. The BBC is currently allowed to straddle across
media in a way in which no-one in the private sector is. It would
be ironic if public funds were made available to the BBC to do
things which public policy forbids the private sector to do by
the constraint of ownership rules. There is a very real danger
that the BBC can behave unfairly, simply because of its unique
ability to cross promote across different branches of the media.
It is quite wrong that the BBC should try to occupy every possible
digital summit to squeeze out any opposition.
Any proposals by the BBC for the introduction of
new services should first of all be scrutinised by an independent
regulatory body charged with overseeing all broadcasting media.
That body must, first of all, determine whether or not the service
to be provided can truly be categorised as public service broadcasting.
If it can, they should then assure themselves that public service
programming could not be provided from any source other than the
BBC, before recommending to the Secretary of State that the BBC
be allowed to introduce such a service.
I would like to see the licence fee survive
as the method of funding the BBC's core generalist public services.
There is a strong argument, however, for funding Online by advertising
since, unlike in broadcasting, extra costs are involved in serving
an increased number of customers, many of whom do not pay a licence
fee. Similarly, non-core digital services catering for niche markets
might appropriately attract subscription revenue.
Even without any additional funding, the BBC's
revenues are set to grow more robustly than those of ITV over
the next few years. It is also unfair that it is the commercial
providers of digital set-top boxes who are bearing the brunt of
discounting the prices of set-top boxes to entice viewers to switch
to digital, thus increasing the BBC's receipts from a digital
supplement! The main argument, however, against the Committee's
recommendation of a digital supplement is that it will deter or
defer digital take-up. Most important of all, however, I believe
that the proposal to introduce a digital supplement has united
the otherwise internally competitive commercial sector against
the BBC and it may well have made it less likely that the licence
fee will survive a review in 2006. That, I believe would be very
regrettable.
November 1999
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