Examination of Witness (Questions 108
- 119)
TUESDAY 23 NOVEMBER 1999
MR PAUL
BROWN, MR
CHRIS CARNEGY,
MR DAVID
MANSFIELD AND
MR TIM
SCHOONMAKER
Chairman: Welcome. We hope to be as brisk
with you as Lord Gordon was. That does not mean to say we want
to get rid of you immediately. I am going to call on my colleagues
to start putting questions to you.
Mr Fearn
108. Do you think it was a mistake for the Davies
Committee to be given a remit to examine the funding of the BBC
separate from an examination of commercial broadcasting and its
regulation?
(Mr Brown) The short answer is yes. The Chairman has
said very clearly and properly in our view that it is impossible
to divorce the BBC from what goes on in the rest of the broadcasting
and media world in the UK and to examine them apart from the rest
of us is clearly wrong.
109. You also argue in your memorandum that
the Government should define the BBC's public service remit. Would
you not think that is direct political interference against the
Charter and Agreement?
(Mr Brown) We think it is something for discussion
and the Government must play its part in that.
(Mr Mansfield) The short answer is that the BBC's
public service remit needs to be defined because at the moment
the BBC is whatever it wants to be. The situation our industry
finds itself in is that we are competing with the BBC for audiences
and we are funded by commercial advertising revenue. We have no
other source of funding. We are very tightly regulated as an industry
by the Radio Authority and the BBC can do whatever it wants to
do. We have had several examples over the last few years where
the BBC has decided that it wishes to serve listeners who are
not served by commercial radio, which in our view is what it should
be doing. It has taken a particular view on the type of music
it plays or the type of content it produces and broadcasts. Then
we have seen a complete U-turn where the BBC have suddenly decided
that what it needs to do is compete head on with commercial radio,
which is what it is doing at the moment. We think that situation
is untenable and puts our industry, which is only a small industry,
in great jeopardy. We do think that the BBC's remit ought to be
defined and it ought to be closely regulated, just as we are.
110. Is the head-on fight only one way or is
it your way as well?
(Mr Mansfield) Sorry, in what regard?
111. You said the BBC is competing head on.
(Mr Mansfield) Yes.
112. Just their way and not yours.
(Mr Mansfield) It is two-way.
Ms Ward
113. You argue that if more money were to be
raised it should not be spent on digital television but on digital
radio. Do you think therefore that digital television viewers
should actually pay for what would then be an improvement in digital
radio services?
(Mr Brown) No, we do not actually argue that more
money should be spent on digital radio rather than on digital
television. Certainly we are concerned that the profile of digital
radio should rise in importance alongside digital television.
What we do say is that if any money is to be given to the BBC
in order to fund these developments it should clearly be ring
fenced and some of that money should be clearly ring fenced to
fund digital radio activities. That is what we say.
114. Do you think that the BBC should be providing
better services or more services in digital radio? Do you think
that was an area which was missing from this Report, that really
there should have been a much better evaluation of those services?
(Mr Brown) Radio was pretty much ignored entirely
in the Davies Report.
(Mr Schoonmaker) Our view is that the BBC is an extremely
wealthy organisation and when David and Chris and I see magnificent
sums invested in BBC radio, we feel a bit like Cromwell's followers
who have been transported to the court of Louis XIV: there is
an enormous range of activity there, some of it is very good.
The BBC want more money because, like Louis, they want to do everything,
but they should be forced to make choices just like we all are.
They can make better use of the resources they are putting into
digital radio right now. If you see the services they put forward,
they are talking about using BBC archive material on the one hand,
talking about doing Asian broadcasting, which the commercial sector
already does. The point I should like to put to the Committee
is that if you are looking for organisations to take the digital
age forward and make it happen and create new services and take
advantage of these platforms, the BBC so far has not shown that
it is actually doing all that well, even though they have a fantastic
amount of resource to make that happen.
115. Do you think that this Committee missed
out on the opportunity to force the issue about where the BBC
should actually be providing services? Do you think that is something
that the Government should now to take on, whether that is during
the Charter review or before it takes place? I recognise exactly
what you are saying about the competition. Radio 2 is something
I would have identified with my parents' generation. I now turn
over to find that it is competing with the sort of music I might
find on a commercial radio station. Where do you think we ought
to pick that issue up?
(Mr Brown) At the heart of our argument is that the
BBC should be independently regulated and it is not independently
regulated at the moment. There should be an arm's-length regulation
applied to it and our view, which we have stated quite often,
is that should be done by the regulators who operate in the commercial
sector. If we are going to have a complete picture of media in
the future, and if that is to be properly regulated, it seems
to us that that regulation should be done by a body, perhaps medium
specific or maybe a bigger body, but we would prefer a medium
specific body in our case which looks at radio in the round and
examines the extent to which public funding is necessary and the
extent to which commercial funding can operate. That seems to
us to be the ideal solution.
Mr Maxton
116. May I ask you about digital radio because
obviously this is more your concern than others? How much money
have your companies invested in digital radio developments and
how much has the BBC invested in digital radio developments?
(Mr Schoonmaker) BBC last year spent something like
£5 million on digital radio. This is back to my point. In
the court of Louis it is possible to spend money very well or
to not much effect.
117. How much have you spent?
(Mr Schoonmaker) We have just won our licences and
our investment is laid down by the Order in which the Radio Authority
gives these licences.
118. That with all due respect is development
after the actual research work and the technical developments
have been done. You have the licences to take them and run programmes
which are on a digital radio station. That is different from the
investment in the actual development of the technology, is it
not?
(Mr Brown) I am not quite sure I fully understand
the question. I am not sure the BBC took part in the development
of the technology by starting its digital transmissions. It is
certainly arguable that they started their digital transmissions
probably two years too early in terms of using public funds. There
was no need for there to be BBC digital radio from 1995 onwards.
I do not understand why that should have been the case. In terms
of actually developing the technology, that has been done by engineers
in Europe, but in terms of exploiting it, the expenses to us are
as great as they are to the BBC. It is just that the BBC has been
doing it for longer.
(Mr Schoonmaker) To be helpful and to answer your
question, over the next 12 months with the national commercial
multiplex up and running, London, Birmingham, Manchester launching
in the spring and a number of others coming in later next year
such as Sheffield, Newcastle, Liverpool, the commercial sector
overall will probably invest over the next 12 months something
like £5 million and then it will be roughly double that for
the 12 months following.
119. What are you going to offer on this digital
radio station that is different?
(Mr Schoonmaker) The three things which we think will
drive digital radio in the future will be better quality sound.
If I am listening to Capital Gold at the moment, David and I know
from doing research into our London multiplex bid that that will
be a real driver for people to take digital radio because now
it is crackly in the evenings. Quality will make a difference.
More choice will also be part of it: just more stations.
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