House of Commons - Culture, Media and Sport

Select Committee on Culture, Media and Sport Second Report

V. THE FUTURE OF PUBLIC SERVICE BROADCASTING

Some principles for public service broadcasting

94. When, in 1998, we set out what we saw as the five main policy priorities for the communications sector we noted the need "to support a strong and diverse British broadcasting production base, for both traditional and new media, including an enduring role for public service broadcasting".[310] From our identification of this priority, it should be evident that we do not envisage a short-term or even medium-term transition to a period in which all content provision is left to a market with no positive regulatory requirements. Equally, we do not accept the assumption which was apparent in BECTU's evidence that the choice is simply one between a market system free from regulation and the status quo.[311] There is an enduring future for public service broadcasting, provided it is recognised that that future will not be like the past.

95. The White Paper rejects the notion that the end of spectrum scarcity implied by analogue switch-off will spell the end of public service broadcasting and considers that such broadcasting "will continue to have a key role to play in the digital future, potentially an even more important role than it has now".[312] The Government argues that the special characteristics of broadcasting mean that there will never be a perfectly functioning market in broadcasting. Public service broadcasting will remain important for economic reasons, for democratic reasons and for cultural reasons.[313] Mr Smith thought that the White Paper was "very strong on its upholding of the need for public service broadcasting into the future" and referred to his speech at the Smith Institute on 11 July 2000 to demonstrate his willingness to attempt a definition of public service broadcasting.[314] In that speech, Mr Smith likened the role of public service broadcasting to that of public libraries: free at the point of use, universally accessible and offering great cultural and educational wealth.[315]

96. The National Consumer Council criticised the White Paper for failing to present "an over-arching framework for public service broadcasting which would clarify the distinctive roles of all the public service broadcasters, including the BBC".[316] The Council considered that the White Paper did not "take the debate further forward" and had put off any discussion about the future funding of public service broadcasting.[317] This criticism was echoed by other witnesses.[318] In a Report in 1999 on the funding of the BBC we described public service broadcasting as a "vague and elusive concept".[319] The term has defied an agreed definition for over 75 years.[320] Public service broadcasting is a constantly changing phenomenon. Accordingly, it is not appropriate to criticise the White Paper on the grounds that the document has failed to provide a simple definition of public service broadcasting. However, we consider that there are three general principles which should guide the future provision of public service broadcasting that are not fully reflected in the White Paper.

97. The first principle is that, while the combination of funding arrangements, status and regulatory positions of the "privileged broadcasters"—the BBC, ITV, Channel 4 and Channel 5—means that they will continue to produce considerable public service content for the foreseeable future, it does not follow that the output of those broadcasters can be equated with public service broadcasting.

98. Each of these "privileged broadcasters" has clear advantages in the production of public service content. In the case of the BBC, these include access to spectrum for two analogue television channels and further digital channels, plus five national analogue radio channels, guaranteed public funding at high levels through a hypothecated tax until at least 2006 and distinctive elements to its governance and regulation—the last of these being a matter to which we return later in this Report. The consequences of these arrangements is often, but not always, high quality public service content. However, this does not mean that everything the BBC does is public service broadcasting, even though the BBC sometimes behaves as if this is the case.[321]

99. Channel 4 emphasised some of its distinctive public service qualities in pioneering new work and bringing it to a wider audience, in fostering the creative economy—and the British film industry in particular—and in promoting cultural diversity.[322] Channel 4 argued that these distinctive characteristics resulted not only from the regulatory framework in which the channel operated and its privileged network access, but most fundamentally from its public sector status, which enabled the channel to re-invest its profits and which freed it from an obligation to maximise revenue for shareholders.[323]

100. Although in the private sector, ITV receives the privileged access to a mass audience that is often necessary to underpin significant programme investment.[324] Like the BBC and Channel 4, ITV sees itself as "a public service broadcaster", given its extensive range of regulatory obligations and its distinctive current and prospective future role as a regional broadcaster.[325] The White Paper states that the ITV companies "should continue to have a key role in delivering public service broadcasting".[326] With regard to the near future, we would not dissent from that view—and we have already supported the continuation of regional public service obligations for ITV—but we do not accept that these obligations justify the contention that ITV is itself a public service broadcaster.

101. Channel 5 also describes itself as "a committed public service broadcaster".[327] Channel 5 has privileged access to the analogue spectrum, albeit not with universal coverage.[328] The channel has public service commitments designed to complement those of other free-to-air broadcasters, including hourly news updates in peak time.[329] Taken together, these do not make Channel 5 the public service broadcaster it purports to be. Talking of the proposed transfer of certain public service privileges to the digital environment, Artsworld Channels Limited referred to "the absurd prospect of Channel 5's prime-time fare of soap operas, game shows, crime and cookery being given 'public service' privileges, while independent channels consisting wholly of education or arts or science or children's programmes are denied them".[330]

102. The second principle that should inform the future development of public service broadcasting is that the current position of the "privileged broadcasters" brings with it very considerable costs, both in terms of direct and indirect charges upon the public and in terms of the impact on the development of a competitive and dynamic market, and that these costs should be transparently identified and continuously assessed against other means of achieving the desired ends in terms of public service content.

103. The licence fee that must be paid for every household with a television receiver, and which the BBC has been granted the privilege of collecting and spending, is the most prominent cost paid for public service broadcasting, but it is far from being the only cost. The ITC has estimated the total public subsidy of the "privileged broadcasters", including the licence fee, the subsidised access to spectrum and the less than totally commercial schedules, at around £4 billion a year.[331] There are also indirect costs based on the extent to which the dominance granted to "privileged broadcasters" with the aim of securing the delivery of public service content produces a less diverse output from the market as a whole. The indirect costs are not confined to the analogue era. There are proposals to sustain or even extend them in the digital era through the extension of "must carry" obligations and other measures such as guaranteed prominence on Electronic Programme Guides.[332]

104. Greater transparency about what we pay for the output of the "privileged broadcasters" should lead to clearer thinking about how public service content should be paid for in future. The National Consumer Council raised the possibility of establishing a new public service broadcasting fund for new entrants providing public service content.[333] Reference has also been made to such provision coming from the television licence fee, although it was argued that any distribution mechanism for such funds ought to be separate from the regulatory function.[334]

105. The third principle is that the focus in future should be on ensuring the provision of public service content from whatever source is most appropriate rather than on protecting the privileges of certain broadcasters for their own sake.

106. In the future, judgements about public service value will become separated from privileged access. With the end of spectrum scarcity, new forms of public service content will emerge. The White Paper presages the development of new public service broadcasting by referring to possible new channels "which may have a general public service remit, or may offer Government or local information services".[335] The document also refers to possible tendering for future public service content on new channels.[336] One form of new public service television may be local television, which is already available to a very limited extent.[337] Mr Hochhauser referred to the potential of genuine local television based on his experience in developing broadband television services through ADSL.[338] Local television was viewed by ntl as "an untapped vein".[339] A more imaginative approach to the concept of public service broadcasting based on the three principles we have identified, together with the opportunities created by technological change, provides a chance to tap that vein.

Community radio

107. While it may be some years before the potential of local television is realised, the benefits of community radio are already apparent and ought to be extended at the earliest possible opportunity. At present, community radio operates under restricted service licences issued by the Radio Authority. The restrictions generally take one of two forms. First, around 400 licences are issued each year for community radio services for a maximum of 28 days.[340] Second, around 90 long-term restricted licences have been issued for schools, colleges, hospitals and other institutions with a transient population.[341] When such long-term licences are granted, restrictions are imposed on content, so that a school radio station may be confined to school affairs and restricted in its ability to serve the wider community.[342]

108. Despite these burdensome restrictions, the community radio sector has already demonstrated its capacity to make a unique contribution to local communities and to the development of the media. Community radio has already shown an ability to stimulate high levels of local participation in radio.[343] The Radio Authority estimates that about 20,000 people participated in community radio last year alone.[344] Mr Phil Korbel of Radio Regen argued that its participatory dimension made community radio "fundamentally different in content and creation" to other radio broadcasters: "this is made by members of the community and the organisations that exist to serve the community, no more, no less".[345] Mr Martin Blissett of the Community Media Association told us: "what community radio has ... done is it has brought radio to people".[346] Community radio can serve as a powerful force for local regeneration and for the promotion of social inclusion, providing a focus for neighbourhood renewal.[347] As Mr Blissett observed with regard to ethnic minorities, community radio can "give these communities a voice".[348] The sector also has a proven record of developing skills that can lead to subsequent employment in the media, a role acknowledged within the commercial radio sector.[349]

109. Community radio has achieved much with restricted services, but could achieve much more with full-time licences. The benefits already provided by the sector could be multiplied.[350] The Community Media Association expected to see the sector placed on a more permanent footing by the legislation giving effect to the proposals in the White Paper, but saw a strong case for pilot-testing with full-time licences to help shape such legislation.[351] The Radio Authority is reluctant to take forward this idea—partly because of uncertainty about its legal position—without a clearer indication of the Government's position.[352] We pressed Mr Smith for his views on such pilot schemes. He thought that the Radio Authority might be being "too nervous" about its own legal powers.[353] He said that he would look on proposals for pilot-testing "with great sympathy and very constructively" and that he "would love" to give the sector a boost.[354] He then added later that, provided technical issues relating to radio spectrum and coverage could be resolved, "I would very much welcome looking at what sort of pilot scheme could be put in place to encourage the growth of community radio to see what the extent of demand is, to see what might be possible, and to see what the problems could be".[355] We view this as the indication of Government approval for which the Radio Authority has been waiting. We recommend that, as a matter of urgency, the Radio Authority identify pilot schemes for expanded community radio projects for launch in advance of the introduction of legislation to give effect to the proposals in the White Paper. We envisage that pilot schemes would include projects focused on distinct neighbourhoods for periods significantly more than 28 days and extensions of the scope of school-based projects with current restricted service licences.

110. Licence restrictions are not the only constraint upon the growth of community radio. Although a number of stations have been successful in local fund-raising, the White Paper notes that "the constraints on access to non-commercial funding for permanent services have inhibited the growth of a strong community tier of radio".[356] The Government is therefore canvassing views on the Radio Authority's proposal for an "Access" Fund, under the aegis of OFCOM, to assist projects for small-scale radio.[357] Mr Smith said that he "would be very keen on pushing this forward", but was unable to set out a final position on the scale of and sources for such a Fund.[358] There are concerns within the commercial radio sector that commercial funding for community radio could threaten smaller local commercial radio stations that already have significant local obligations.[359] Mr Steve Buckley, Director of the Community Media Association, argued that the sector would remain distinct from the commercial sector in its content, its geographical coverage and its non-profit-making structure.[360] The Radio Authority also attached importance to the structural differences between commercial and community radio and both the Authority and the Association saw some scope for commercial funding for community radio.[361]

111. We are convinced that there is both a strong need and an overwhelming case for the establishment of a permanent community radio sector in the United Kingdom, distinct from and complementary to commercial radio. We support the creation of an "Access" Fund both to assist in the establishment of new projects and to provide continuing funding to reflect the fact that funding of the sector will not be primarily commercial. We expect that the level of this Fund would reflect the two distinct functions of support for launch and continuing financial support. In the light of the likely level of demand, we recommend that the Fund be financed principally from general taxation.

310 HC (1997-98) 520-I, para 141. Back

311 QQ 157, 159, 165. Back

312 Cm 5010, paras 5.2.5-5.2.6. Back

313 Ibid, pp 48-51. Back

314 Q 647. Back

315 "Public Service Broadcasting for Digital Citizenship", Smith Institute Speech, 11 July 2000. Back

316 Evidence, p 2. Back

317 QQ 2, 9. Back

318 Q 116; Evidence, pp 104-105. Back

319 HC (1999-2000) 25-I, para 17. Back

320 Q 316. Back

321 HC (1999-2000) 25-I, para 15. Back