Select Committee on Culture, Media and Sport Minutes of Evidence

Examination of Witnesses (Questions 540 - 560)



Mr Maxton

  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 long.

  542. Maybe you can find it on the Internet.
  (Ms Thomson) I am sure I shall using a good search engine.

  Chairman: The New Yorker article.

Mr Fearn

  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 Internet?
  (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 years?
  (Ms Thomson) Are we talking specifically about the UK there?

  Mr Fearn: Yes.

Derek Wyatt

  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.

Mr Fearn

  546. How long do you think then?
  (Ms Thomson) How long before?

  547. Yes.
  (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.

Derek Wyatt

  550. Good morning. Can you just remind me, is Bertelsmann still involved in AOL Europe or has it divested itself of that?
  (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 service remit?
  (Ms Thomson) Can you define what you mean by "public service"?

  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 perspective—I am not a traditional broadcast expert—if 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 fundamentally different.
  (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 to me.
  (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 that.

  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 was.

  Chairman: Thank you.

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