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".
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.
There is an enduring future for public service broadcasting,
provided it is recognised that that future will not be like the
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".
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
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.
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.
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".
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.
This criticism was echoed by other witnesses.
In a Report in 1999 on the funding of the BBC we described public
service broadcasting as a "vague and elusive concept".
The term has defied an agreed definition for over 75 years.
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 5means 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 regulationthe
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.
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 economyand
the British film industry in particularand in promoting
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.
100. Although in the private sector, ITV receives
the privileged access to a mass audience that is often necessary
to underpin significant programme investment.
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.
The White Paper states that the ITV companies "should continue
to have a key role in delivering public service broadcasting".
With regard to the near future, we would not dissent from that
viewand we have already supported the continuation of regional
public service obligations for ITVbut 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".
Channel 5 has privileged access to the analogue spectrum, albeit
not with universal coverage.
The channel has public service commitments designed to complement
those of other free-to-air broadcasters, including hourly news
updates in peak time.
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".
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
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
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.
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.
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
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".
The document also refers to possible tendering for future public
service content on new channels.
One form of new public service television may be local television,
which is already available to a very limited extent.
Mr Hochhauser referred to the potential of genuine local television
based on his experience in developing broadband television services
Local television was viewed by ntl as "an untapped vein".
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.
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.
Second, around 90 long-term restricted licences have been issued
for schools, colleges, hospitals and other institutions with a
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
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.
The Radio Authority estimates that about 20,000 people participated
in community radio last year alone.
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".
Mr Martin Blissett of the Community Media Association told us:
"what community radio has ... done is it has brought radio
Community radio can serve as a powerful force for local regeneration
and for the promotion of social inclusion, providing a focus for
As Mr Blissett observed with regard to ethnic minorities, community
radio can "give these communities a voice".
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.
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.
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.
The Radio Authority is reluctant to take forward this ideapartly
because of uncertainty about its legal positionwithout
a clearer indication of the Government's position.
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.
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.
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".
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".
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.
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.
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.
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
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.
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.
(1997-98) 520-I, para 141. Back
157, 159, 165. Back
5010, paras 5.2.5-5.2.6. Back
pp 48-51. Back
Service Broadcasting for Digital Citizenship", Smith Institute
Speech, 11 July 2000. Back
p 2. Back
2, 9. Back
116; Evidence, pp 104-105. Back
(1999-2000) 25-I, para 17. Back
(1999-2000) 25-I, para 15. Back
p 126; QQ 412, 413, 415-417, 420, 431. Back
423, 425. Back
p 114; QQ 394, 408. Back
5010, para 5.6.9. Back
p 207. Back
328 Ibid. Back
p 208. Back
p 223. Back
p 142; Q 482. Back
pp 235, 223. Back
295, 484, 487; Memorandum from the Incorporated Society of British
Advertisers Ltd, sect 4.3. Back
5010, para 3.4.4. Back
para 8.8.4. Back
p 40. Back
140, 143. Back
pp 77, 82; Cm 5010, p 39. Back
p 91. Back
pp 76, 83. Back
p 92. Back
pp 76, 83; Q 297. Back
Evidence, pp 77, 84, 85, 172. Back
282, 297, 298. Back
278, 282, 298, 302. Back
p 97. Back
278; Cm 5010, para 4.5.1. Back
para 4.5.3. Back
617, 633-634. Back
pp 65, 69, 172-173, 211-212; Memorandum from the Institute of
Practitioners in Advertising, para 4.19; Cm 5010, para 4.4.3;
Q 316. Back
281, 285. Back
340, 322, 278. Back