Select Committee on Culture, Media and Sport Second Report


The limits of Internet regulation

112. Although the Internet is being used and will be used increasingly as a medium for audio and video material, the Internet is fundamentally different to traditional broadcast media. Whereas there is closely controlled and licensed access to broadcast media, there is no spectrum scarcity on the Internet and no tradition of licensing. The Internet has flourished with a minimum of regulation, partly because the Internet first developed in the United States, a country that provides specific constitutional protection for freedom of speech.[362] We have noted previously that, due to the almost infinite scale and international character of the Internet, content regulation of the traditional kind is not viable for the Internet.[363]

113. The Government believes that a distinct regulatory approach to the Internet is required.[364] The Government reaffirms its commitment to self-regulation through the Internet Watch Foundation as the most effective means of preventing illegal material being available on sites controlled by United Kingdom Internet service providers.[365] Ms Hewitt saw the Foundation as a "model" for tackling the problem of illegal content and the approach retains the support of service providers.[366] The White Paper also commits the Government to the promotion of filtering devices for the Internet and of the more widespread rating of Internet sites, measures to which service providers are also committed.[367]

114. Despite the White Paper's avowed commitment to a distinct approach to Internet regulation, a number of organisations have expressed concern that the White Paper might herald a move towards new forms of content regulation for the Internet.[368] The White Paper refers to the establishment of "a high level set of principles and objectives for the regulation of content across all electronic communications".[369] The Government proposes to give OFCOM responsibility "for maintaining content standards in the electronic media".[370] The White Paper indicates that a combination of self-regulation and "co-regulation" will be required for services such as the Internet. "Co-regulation" is defined as entailing an "active involvement of Government or regulator" and the Government states that, in cases of co-regulation, "the regulator will ... have scope to impose more formal regulation if the response of industry is ineffective or not forthcoming in a sufficiently timely manner".[371]

115. Both the British Internet Publishers' Alliance and AOL were concerned that the attempt to propose general principles for the content of all electronic media would undermine the axiom that Internet content regulation was confined to the laws that also applied offline.[372] Daily Mail and General Trust plc was worried that proposals for content regulation in the White Paper might be applied to newspapers' Internet activities, with newspaper content online open to new forms of regulatory interference.[373] This concern was shared by other sections of the newspaper industry.[374]

116. Both Mr Smith and Ms Hewitt were keen to dispel any fears that the White Paper included any new proposals for regulation of the Internet. They said that the Government had no intention of proposing censorship of the Internet or moving "even half a step down the road towards State control of print media".[375] We welcome these clear and unequivocal statements that the Government is not seeking to establish any new forms of Internet regulation by means of proposals in the White Paper. We consider, however, that fears on this score arise directly from what can most generously be interpreted as infelicitous drafting in the White Paper. The same mistake must not be repeated in the legislation that follows. We recommend that the new regulator be explicitly excluded by statute from imposing regulatory obligations relating to Internet content. We further recommend that the Government reaffirm its commitment to self-regulation as the best and only way forward for Internet content regulation and clarify that the Government does not envisage any form of "co-regulation" of the Internet involving additional powers of enforcement that go beyond the principle that the general law should apply online as offline.

117. The practical and philosophical objections to statutory regulation of Internet content apply as much to audio-visual content as to text. Internet broadcasting cannot and will not be licensed.[376] Nevertheless, the White Paper implies the establishment of some standards for the Internet content of some of those licensed to broadcast in other ways. The White Paper states that "we would expect to see public service broadcasters applying the same high standards and high quality in their services on the Internet and via telephony as they do on their traditional broadcast businesses".[377] The document also explains that the Government expects broadcasters "who have a responsibility to broadcast accurate and impartial news to maintain those standards in their news services in other media".[378]

118. These statements were seen by ntl as implying a different regulatory approach for licensed broadcasters on the Internet compared with other Internet broadcasters and ntl concluded:

    "The only effect of a policy of differential regulatory expectations would be to marginalise some of the most capable and responsible companies in exploiting the new media to the full. Attempting to regulate only those you happen to be able to reach for other reasons is short-sighted and will ultimately prove counter-productive."[379]

It is instructive that the Radio Authority told us that it did not seek control over Internet radio content: "The fundamental reason for licensing broadcasts has to do with spectrum scarcity ... There is no spectrum scarcity of any significance on the Internet and therefore it would not be appropriate for the Radio Authority to seek to regulate radio stations on the Internet."[380] On the same basis, we consider that it would not be appropriate for the new regulator to use its licensing powers for media with spectrum scarcity as a back-door method of Internet content regulation and we recommend that there be a specific statutory prohibition on the new regulator doing so.

The regulation of licensed broadcasters

119. Over time, it is likely that a great deal of broadcast content will migrate to the Internet or broadband networks that give the viewer much more control over what he or she chooses to watch. As Telewest argued, "with the advent of digital broadband technology, the idea that broadcasting is a 'push' form of communications has to be adjusted. Consumers will increasingly 'pull' material into their premises so there will be a need to pull back content regulation the more that viewers control the signals they access."[381] AOL UK questioned whether regulation had been properly re-assessed and re-balanced in the light of the reduction in spectrum scarcity and questioned "whether public service broadcasting will still be central or important to consumers' lives in five or ten years' time or whether the choice of content and services and of platforms over which these can be accessed will be so diverse as to end the need to safeguard public service broadcasting".[382] Mr Cruickshank believed that the White Paper had not properly reflected the timescale over which the Internet would have such a general impact as to render obligations such as impartiality of news broadcasters inapplicable: "That is an elephant in the corner, as they say in America; it is very soon".[383]

120. The White Paper proposes what the Government sees as a flexible regulatory framework based on a three-tier structure with the "basic tier supporting standards across all services" and the two further tiers applicable to what the Government terms public service broadcasters.[384] As part of the first tier, the White Paper proposes that all broadcasters would be subject to "any relevant underpinning codes establishing negative minimum content standards set by OFCOM".[385] The second tier would be concerned with the delivery of public service obligations that "are easily quantifiable and measurable" while the qualitative public service remits of what we earlier termed the "privileged broadcasters" would be covered under the third tier.[386] One of the principles of the White Paper is that the case for regulation will decline over time so that regulation will have to be "at the minimum necessary level", kept under review and removed where appropriate.[387]

121. The ITC supported "the White Paper's broad approach to simpler, streamlined regulation graduated according to a medium's pervasiveness and invasiveness (i.e., how much conscious prior choice the consumer has over the selection of material)".[388] We have previously noted that the distinction of services that are universally available and "pushed" into the home and those that are selected and "pulled" by the viewer is sensible and have argued that non-scheduled services should only be subject to limited content regulation.[389] Video Networks Limited considered that video-on-demand and interactive services would increasingly compete with the Internet and that regulation had to reflect that reality: "The regulatory régime that needs to apply to these services must parallel that of the liberal environment of the Internet rather than the more restrictive régime traditionally applied to television advertising, since ultimately in the future all services are likely to be received by broadband Internet".[390] In the future, universal negative content regulation will cease to be possible. As the Internet becomes used increasingly as a medium for broadcast content, there will be an alternative to the licensed broadcasters. The regulatory régime for licensed broadcasters, and for non-scheduled services in particular, must reflect this.

122. In 1998 we noted that "the capacity for comprehensive negative regulation will slip away, but the desirability of positive regulation will still remain".[391] Ms Hodgson argued that the public was realistic about the changing nature of the broadcasting market, but still saw a role for public service broadcasting.[392] She argued that, while certain broadcasters still received certain privileges, including direct or indirect public subsidy, there would be a strong case for accountability for such subsidy in terms of positive programming requirements.[393] We expect there to be a continuing case for positive programming requirements for the "privileged broadcasters" and any other licensed broadcasters that may in future be in receipt of direct or indirect subsidy in respect of public service content.

123. One positive programming requirement that currently applies to certain broadcasters, and that will in future apply more generally, relates to access to broadcasting for people with disabilities.[394] Since the White Paper was published, the Government has issued detailed proposals to increase the target for the provision of subtitling on digital terrestrial television from 50 per cent of programmes by the tenth anniversary of the start of the service to 80 per cent by the tenth anniversary.[395] The Government also proposes to extend these requirements to digital cable and satellite services when legislation permits, but to give the regulator power to exempt certain categories of channels (on all platforms) on a case-by-case basis.[396] These proposals have been welcomed by the Royal National Institute for Deaf People.[397] BSkyB advocated a voluntary rather than legislative approach to subtitling, arguing that compulsory requirements would place burdens upon new channels.[398] Over 5 million people regularly use subtitles.[399] Take-up of digital television among people who are deaf or hard of hearing has been lower than amongst the population as a whole, largely due to the inaccessibility of the digital channels.[400] We strongly support the Government's recent proposals to establish more stretching targets for subtitling on digital terrestrial television and to extend such obligations to digital cable and satellite services by means of new primary legislation. We consider that any decision by the new regulator to exempt providers from these targets should be transparent and based on clear criteria.

124. For the privileged broadcasters subject to positive content regulation by the new regulator, the Government is encouraging a move away from "the detailed, prescriptive requirements—often dubbed 'box ticking'—which are contained in present licences" that the Government considers "may inhibit creative innovation, and thus harm both the public interest and the commercial success of companies".[401] The Government envisages a greater role for the development of statements of programme policy and self-regulatory mechanisms by broadcasters, but with back-stop powers for the regulator if this approach does not work.[402] These proposals were broadly welcomed by ITV, Channel 4 and Channel 5.[403]

The regulation of the BBC

125. When we advocated the establishment of a single regulator for the communications industry in 1998, we recommended that the new regulator should have oversight of broadcast content regulation "for all broadcasters, including the BBC".[404] When we reviewed the BBC's funding in 1999 we concluded that "the present arrangements for the accountability and regulation of the BBC are not sustainable to 2006".[405] We argued that the BBC's governance was inseparable from other broadcasting regulatory matters and had to be integral to the review preceding the White Paper. We reiterated our earlier recommendation that BBC content regulation should be the responsibility of the new regulator.[406]

126. The White Paper does propose some changes to the way the BBC is regulated, but does not go nearly as far as we have repeatedly recommended. The Government intends that OFCOM will be responsible for agreeing targets for regional production with the BBC and monitoring the Corporation's compliance with them.[407] It is also envisaged that OFCOM's over-arching codes setting out first tier minimum standards will apply to the BBC, although responsibility for regulation of the impartiality requirements in respect of the BBC would remain with the BBC Governors.[408] Unresolved complaints about failure to meet basic standards set out in the code could be taken up by OFCOM.[409] Finally, with regard to programme policy, the White Paper states that "the BBC's Board of Governors will naturally want to consider observations made by OFCOM".[410]

127. The BBC unsurprisingly welcomed the proposals on its own role in the White Paper.[411] Sir Christopher Bland and Mr Dyke considered that there should be a plurality of content regulators reflecting the different status of broadcasters.[412] Mr Smith argued that the continued separate regulatory position of the BBC was justified both because the BBC was a broadcaster subject to special rules and a distinct remit established by Parliament and because the BBC was the recipient of licence fee income.[413] He also made reference to the fact that the BBC "judges itself to be fiercely and robustly independent of political influence, and rightly so".[414]

128. A number of witnesses argued that the White Paper represented a missed opportunity to reassess the BBC's governance.[415] ITV argued that the fact that the BBC was largely excluded from the new regulatory structure would inhibit the development of coherent regulation reflecting the complex interaction between the BBC and the rest of the broadcasting market.[416] This view was echoed by Channel 4, BSkyB, Emap Performance and the British Internet Publishers' Alliance.[417] Criticism on these grounds was by no means confined to the BBC's commercial rivals. The Broadcasting Standards Commission observed that "it seems inconsistent with the overall direction of the White Paper proposals that the BBC is not brought more clearly within the regulatory framework".[418] The National Consumer Council viewed the exclusion of "positive content regulation of the primary public service broadcaster from the remit" of the new regulator as "illogical" and thought that it did "not make sense from the consumer point of view to have the major broadcaster outside the orbit of OFCOM".[419] The Council did not see any logic in the notion that the BBC's editorial independence was dependent upon its separation from an external regulator, implying as that notion did that other broadcasters were subject to constant interference.[420]

129. The ITC argued that the new regulator would take some time to settle down and that the BBC's role could then be examined in 2004 in the context of the review of the BBC Charter.[421] This was also the view of Mr Smith, who contended that it would be wrong for proposals in the White Paper to pre-empt parliamentary consideration of Charter review.[422] This proposed approach is precisely the one which we have previously argued should be avoided.[423] There is a real danger that the regulatory régime for broadcasting will be in a state of almost continuous flux and uncertainty from now until 2006. By failing to provide for an integrated approach by the new regulator to all broadcasters including the BBC, the Government has left a large amount of unfinished business. We find it absurd to suggest that Parliament's role in reviewing the BBC's status would somehow be diminished if the BBC were subject to equal treatment with other broadcasters in legislation that will doubtless be subject to extended and detailed consideration by both Houses of Parliament. We recommend that the House of Commons be given a full opportunity early in the next Parliament to consider the future regulation and governance of the BBC as part of the process leading to enactment of the new regulatory régime.

362  Evidence, p 9; Q 537. Back

363  HC (1997-98) 520-I, paras 106-108, 114. Back

364  Cm 5010, para 6.3.2. Back

365  Ibid, para 6.10.3. Back

366  QQ 610, 537; Evidence, pp 8, 158. Back

367  Cm 5010, paras 6.10.4-6.10.7; Evidence, pp 8, 158; QQ 20, 539, 541, 543. Back

368  Evidence, p 158; Q 59. Back

369  Cm 5010, para 6.3; emphasis added. Back

370  IbidBack

371  Cm 5010, p 83 and para 6.3. Ms Hewitt employed the phrase "co-regulation" in oral evidence in the context of the Internet Watch Foundation, Q 610. Back

372  Evidence, pp 48, 158. Back

373  Evidence, p 149; Q 530. Back

374  Evidence, pp 16, 207. Back

375  QQ 610, 650. Back

376  HC (1997-98) 520-I, para 107; Evidence, p 133. Back

377  Cm 5010, para 5.9.1. Back

378  Ibid, para 6.6.2. Back

379  Evidence, p 24. Back

380  Q 332. Back

381  Evidence, p 236. Back

382  Evidence, pp 156, 157. Back

383  QQ 602-603. Back

384  Cm 5010, para 5.4. Back

385  Ibid, para 5.6.1. Back

386  Ibid, paras 5.7.1, 5.8.1. Back

387  Ibid, paras 1.3.9, 8.11.1-8.11.4. Back

388  Evidence, p 142. Back

389  HC (1997-98) 520-I, paras 111, 116. Back

390  Q 130; Evidence, p 33. Back

391  HC (1997-98) 520-I, para 117. Back

392  Q 470. Back

393  QQ 482, 488. Back

394  Cm 5010, paras 5.6.1, 5.6.2, 7.6.2. Back

395  Q 613; HC Deb, 29 January 2001, col 26W; Review of the Statutory Requirements for the Provision of Subtitling, Sign Language and Audio Description Services, Department for Culture, Media and Sport, para 4.2.2. Back

396  Ibid, paras 4.6.1-4.7.5; Q 631. Back

397  Evidence, p 226. Back

398  Q 370; Evidence, p 239. Back

399  HC (1999-2000) 25-I, para 103. Back

400  Evidence, p 227. Back

401  Cm 5010, para 5.4.3. Back

402  Ibid, paras 5.8.3-5.8.5. Back

403  Evidence, pp 115, 126, 209. Back

404  HC (1997-98) 520-I, para 158. Back

405  HC (1999-2000) 25-I, para 105. Back

406  Ibid, paras 111-113. Back

407  Cm 5010, para 4.4.4. Back

408  Ibid, para 5.6.4. Back

409  IbidBack

410  Cm 5010, para 5.8.4. Back

411  Evidence, pp 131-132. Back

412  QQ 440, 448. Back

413  Q 647. Back

414  Q 652. Back

415  Q 578. Back

416  Evidence, pp 114, 115; QQ 410, 411. Back

417  QQ 430, 276; Evidence, pp 47, 105, 127. Back

418  Evidence, p 215. Back

419  Evidence, p 2; Q 12. Back

420  IbidBack

421  QQ 478, 480. Back

422  Q 649. See also Cm 5010, para 5.8.6. Back

423  HC (1999-2000) 25-I, para 111. Back

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