Examination of Witnesses (Questions 540
TUESDAY 13 FEBRUARY 2001
540. I have to go, I apologise.
(Ms Thomson) I think first of all we would like to
deal with the issue of children accessing and searching for content
on the web.
541. Could you speak up a little, please?
(Ms Thomson) One of the issues with children accessing
the web and being in the online environment is very much about
providing tools which allow the parent to control what they can
or cannot do, including searching for information. That is why
one of the key things that we do as an organisation is to allow
parents to have very simple tools which are available for them
to block either communities, chat or e-mail or porn search, for
example, to different age levels of children depending on where
they feel they are in their development, either a younger child
or a teenager. When you go beyond that into what happens in search,
the key thing is to come back to the consumer. In the same way,
if a newspaper merely filled its pages with advertorials it would
not have an audience for very long, users of the Internet expect
to be able to search freely for information that they require
and they do not expect that to be filtered in such a way that
they only get the answer that the ISP wishes them to have. I am
not aware of the story but if that was happening with the industry
I would not expect the search engine to stay in business for very
542. Maybe you can find it on the Internet.
(Ms Thomson) I am sure I shall using a good search
Chairman: The New Yorker article.
543. The White Paper proposes that OFCOM will
promote rating and filtering systems. How long do you think it
will be before such standards become a standard feature on the
(Ms Gilbert) The filtering side of it within AOL has
been a standard feature for quite some time with our parental
controls. We obviously recognise and support initiatives to take
that into a much broader industry environment. We are actually
a founding member of a not-for-profit organisation called ICRA,
which is the Internet Content Rating Association. ICRA is in the
process of developing such a rating and filtering system which
should, I understand, be available soon, but as with all technology
that is a moving goalpost. It should be fairly soon.
544. Why do you think that the spread of broadband
networks has been slower than expected over the last couple of
(Ms Thomson) Are we talking specifically about the
Mr Fearn: Yes.
545. And getting slower.
(Ms Thomson) You might say that. I think it comes
down to the fact that much of it has been looked at in a telecommunications
way rather than looking purely at the consumer and what the consumer
will wish to buy and to access. There have clearly been technical
problems in rolling out broadband services in the UK. One of the
key things is that companies have not been clear about what the
real benefit of that is, nor has there been a drive to provide
broadband services at an affordable consumer price. Therefore,
I believe the industry has not been stimulating enormous demand,
the industry has been held back by the very slow nature of BT
both in terms of roll-out but also providing information to ISPs
who may then go and create market demand for the product. It is
very difficult to go and market a product and start to build demand
for a product if you do not know how much it is going to cost,
when it is going to be available and in what proportion throughout
the country it is going to be available. Most ISPs are national
organisations providing services equally to anybody anywhere in
the country but where we are with broadband roll-out in the UK
is we quite simply on a monthly basis do not know where or when
we can sell the product and, therefore, it becomes unmarketable.
546. How long do you think then?
(Ms Thomson) How long before?
(Ms Thomson) I think as an industry, and that includes
BT, we really need to have some kind of forum where we can sit
down and say "this is not working, how do we move forward
and make this work, both for us as an industry, because this is
a key platform that we will want to provide to our customers,
and in terms of what the consumer delivery will be." I think
we are stuck and we are in a situation where the only player in
the broadband market by definition may be BT because it is the
only company that can actually plan to roll-out these services.
I think as an industry we really need some kind of forum where
we can create the drive to broadband services because we will
only understand the consumer proposition when we have enough broadband
activity in place for companies to be able to experiment, to try
different kinds of content. Just as you cannot take content that
exists in a printed form and take it online and say "it is
now online, it will work like that", it is a different product,
we believe from the narrow band to the broadband world there will
be a similar step change in how consumers want to access content
and the type of content they want to access. Until you have some
people trying the service and until you have a fairly broad reach
in terms of being able to test content it becomes very difficult.
Certainly it is not going to be this year and I very much doubt
if it is going to be next year. I think we are all enormously
disappointed with where we are. I think we have to look to BT
to open up the process, to create more transparency and delivery
to the ISPs and then perhaps we, as an industry, can start to
form some basic consumer propositions which will create demand.
548. The Government has committed itself to
universal access to the Internet by 2005. At the moment RNID research
suggests that 29 per cent of deaf and hard of hearing people are
on the Internet. What are you doing for this sector of people?
(Ms Thomson) We have a very broad policy of encouraging
access and enabling access to the Internet in the UK and that
programme in many instances has been since we formed the company
in 1995. Our basic premise is that we need to promote access,
we need to work with groups who may have a particular reason why
they are excluded or do not have the same access to the Internet
as other groups. We have worked directly with specific charities,
and the RNID is one of the charities we have worked with, to create
specific content which is partly informational which takes some
of their services online and produces that in a very easy, managed
environment, but also looks at particular areas of difficulty
that groups will have and then tries to build content that will
help that particular segment of the community get more out of
the Internet. There we have a very specific programme in place.
Generally what we work with are groups who will come to us, very
often not necessarily for funding but for our expertise, who will
say to us "here is a particular problem that we have, can
you allocate some resource to work with us to look at the type
of content which might overcome some of these difficulties?",
and that can be, for example, children who are in hospital for
extended periods of time or who are at home and cannot get to
school because of illness, and there we will look to build partnerships
within the industry, perhaps with computer manufacturers, content
and education specialists to bring services to the community.
I am not saying that it will deliver 100 per cent of what we are
looking for in the next couple of years but there are very active
programmes. I think it is about making sure that the various interest
groups in the community understand what is available to them through
companies like us and continuing that programme which, as I say,
has been in place since 1995.
549. Is there not a worrying trend towards web
site content delivery in audio format only? Are you addressing
that? I think that is one of the worries of the RNID.
(Ms Thomson) I think it is but I think it is also
about working and educating web site builders because in many
instances we build our own content but we also work with many
independent content providers. Overall it is really about a lot
of education and I think we can play our part there by working
directly with the groups because we may interface with, say, 200
content providers in a way that an individual group cannot then
manage. If we understand more about what should be delivered and
what is offered as an alternative to voice or music delivery then
I think we can play our part in educating the people who are actually
producing the content, which in our case is not always us but
many, many third parties on the web.
550. Good morning. Can you just remind me, is
Bertelsmann still involved in AOL Europe or has it divested itself
(Ms Thomson) I think Clare would probably like to
give the technical answer to that.
(Ms Gilbert) Bertelsmann is still technically a shareholder
in the European joint venture but they have no management control
any more. In fact, it was a specific undertaking of the AOL/Time
Warner merger that Bertelsmann would withdraw and that process
is under way and was given a time frame as part of the merger.
551. So they are divesting, as it were, a bit
like Vivendi and Sky?
(Ms Gilbert) There is a process for that, yes.
552. I am just interested in the Napster verdict
because of their involvement with Napster. Do you have a public
(Ms Thomson) Can you define what you mean by "public
553. We have been spending 60 years trying to
define it. Some, of which I would be one, say market failure,
so if it is not offered by the commercial sector then the public
sector should offer it. How is that for a starter?
(Ms Thomson) It is a very broad question. All I can
tell you is how we as a company operate and how we see what we
are doing. We are not simply a commercial organisation operating
in the Internet environment, which is a static industry, we are
part of an industry which is building a medium which will change
people's lives, and is changing people's lives even as we sit
here today. I have been in the industry for five and a half years,
so I am considered geriatric in terms of the age of people in
our industry, but the changes that I have seen in that time have
been enormous. What I have seen is that people are starting to
build the Internet and online services into their daily lives
in a way that was unimaginable five years ago. I believe that
any company operating in that space has a responsibility to operate
in a responsible manner, to have respect for the customers who
pay our monthly subscription fees, and to deliver them services
and content which are appropriate, which they think have value.
If we do not do that then we will go out of business.
554. Let me try and draw you out a little bit
on the public service side. The BBC in evidence said that they
thought that the Internet was the third arm of broadcasting, which
I thought was a very novel way of telling me what the Internet
was. Do you think the Internet is a broadcasting medium?
(Ms Thomson) I think not in the sense that I would
understand "broadcast". When people talk about content
as a defining factor of the Internet, I think what people miss
is that broadly customers of ours, for example, will spend about
a third of their time accessing content, about a third of their
time using communications tools, e-mail, chat, etc, and about
a third of their time perhaps within our own services producing
content, etc. The experience the consumer has of the online environment
is really quite different from what people sometimes see. They
see it as somebody sitting at a computer with content being delivered
to them through the screen, but it is fundamentally different
from that. Consumers are making choices about what they wish to
access, they are making choices about what they wish to be delivered
to them. Content in a public service sense has to move on. Purely
publishing content or pushing information out in the online world
is perhaps a service but I am not sure that it takes us very far.
Republishing content into the online world, for example, that
the BBC has I cannot see has an enormous amount of value, apart
from the extra reach that it may have. What is key, I think, is
how we as an industry start to participate and start to build
a community around things that people want. I do not see the online
environment as being simply a replica of the broadcast environment
that we currently have, or that we have had in the past. There
is an enormous opportunity for all the services that are available
on the Net to become part of that remit and to deliver part of
whatever we might call "public service" to the consumer.
555. If I was the BBC I would be hedging my
bets a bit. My guns would be definitely fired at you and I would
be looking to see what you do and then copying it. I can spend
much more money because I have unlimited access to a huge pot
of gold which is called the licence fee, whereas you have your
shareholders and shareholder value to look after. Do you not feel
threatened by an organisation that has this authority and power
just to look at you and say "You are doing that, we will
do a children's online. Oh, you are doing that, we will do that",
which is happening?
(Ms Thomson) If I was the BBC I would certainly want
to have my cake and eat it too. We are up to the challenge of
competing with any company in a fair and open commercial environment.
If another company, such as the BBC, is to be funded out of public
money to compete with us and to have the advantage of an "advertising
spend" which no-one in the UK can rival then, yes, that does
worry me. It does not worry me about competing on specific content
or how I put that together, I think our services will stand the
test of time, but the sheer promotional effect that the BBC can
bring to bear, yes, that does worry me.
556. So under OFCOM there is not a definition
as to what a public service Internet portal or site should be,
is there? Who is going to define it so we can have the row?
(Ms Thomson) I think that is an interesting question.
(Ms Gilbert) It is an interesting question. I also
think we have to look at whether there is a need, and Simon might
want to chime in here as well, for such a definition because from
my own perspectiveI am not a traditional broadcast expertif
I look at the difference between the traditional broadcast media
and the Internet, the Internet is universal and is available to
all and has very few barriers in terms of if you want to be a
publisher you can be a publisher on the Internet, if you have
a need for a local service you can create that. Just as the Internet
is a global medium, it is also a very powerful local medium and
enables individuals and groups very cheaply and effectively to
get involved in local or national or special interest groups,
to provide their own content, to find relevant content. I suppose
in that context, in that huge difference between what the Internet
offers and what traditional broadcast is in terms of pushing out
content over a scarce broadcasting medium, then I think they are
(Mr Hampton) I think the BBC undermine their own raison
d'etre on the Internet because in the broadcast world they
are like an oasis of quality where because there is only a limited
number of channels available they have to make sure that it is
good, or at least part of it, but on the Internet everything is
available all the time to anybody and it is also driven by demand
rather than by supply in any event. This is not an obvious area
where you can have a public service information provider because
everybody is an information provider and anybody can go out and
seek whatever information they want. The Chairman gave an example
of the breadth of web sites that he visits for information.
557. If I could play devil's advocate. If the
school curriculum was online it would enable huge numbers of people
who do not have a book at home, do not have a computer, do not
have access to libraries because they close at five o'clock, they
are not open on Sunday, so the principle that there could be a
public service network funded by the licence fee is attractive
(Ms Thomson) But that does seem to me like spending
money twice. Those things will be available, and can be available,
through many other companies on the web.
558. Would you do it for free? I have to pay
a licence fee, if I want AOL it could be free on this service
so that would be a true public service.
(Ms Thomson) I think if there was a specific example
like that where there was specific content which related to, say,
national curriculum, and we already publish much of that material
on our services, then you would go to the industry and say "here
is something which has a real value to put out to as many people
as possible, to make as universally accessible as possible"
and, yes, if that was something that drew people to the online
environment, that helped them extend the online environment into
their daily lives, then we would look at providing services like
559. Say that, in fact, the BBC turn down the
educational channel and digital, they do not want to do that,
they do not think it is a public service, that is up to them to
decide and perhaps we could be angry as politicians, but if there
was an Internet public service fund you could bid and say "we
will do that" and we could pay you to do it. If you take
another example, if you take cancer, it is very difficult if you
are suddenly told you have got cancer and online there are so
many sites but you just do not know what authority in the end
the bases for those sites are. It seems to me that we could, as
a Government say "hold on, we ought to step back here and
say `this is what we will do, a public service online cancer service'"
but who will pay for that? You could say the health authority,
we should pay for it from taxes and, okay, we could but in a sense
we want to get OFCOM to manage this because of the fundamental
changes that are going to happen. So, again, OFCOM could say "this
is a really important service, perhaps we should put a budget
out for it and ask people to bid?" I just see a sort of Channel
4 existence, if you like, of OFCOM saying "we are going to
have this money". One way or the other the fight will be
whether OFCOM gets the licence fee or gets a percentage of the
licence fee to be able to offer public service. That is one of
the underneath arguments that are coming up. Would you like the
opportunity to bid for that money?
(Ms Thomson) I think in broad terms, yes.
Derek Wyatt: Maybe you should have it.
560. I think you have been terrific actually.
Thank you very much indeed for coming forward. Maybe privately
you can explain to me how in the case of my computer, and in the
case of a computer of a friend, I logged into AOL and it took
over my computer completely and I could not get rid of it, I had
to ring you up to find out how to exorcise it.
(Ms Thomson) The advantage that you had was you were
able to ring a free help line in order to find out what the problem
Chairman: Thank you.