VII. A NEW FRAMEWORK
A Department of Communications
130. In 1998 the Government did "not consider
that the convergence of the communications industries has yet
reached the point where a single Departmental location is needed
for its sponsorship and regulation".
We disagreed and recommended that "a separate Department
of Communications be established with its own Secretary of State,
assuming the broadcasting and media responsibilities of the Department
for Culture, Media and Sport, the telecommunications and Internet
responsibilities of the Department of Trade and Industry and the
Cabinet Office's responsibilities for electronic delivery of Government
131. The Government has sought to portray the White
Paper as evidence of effective joint working between Departments,
but has not explained to our satisfaction why the time is now
right for a converged regulator, but not for a converged Department
to provide coherent strategic direction for the regulator and
the sector as a whole.
Setting aside the practical difficulties that we foresee in one
public body being responsible to two Government Departments, we
are concerned that there remain areas where the White Paper lacks
an integrated vision precisely because of the current departmental
divisions of responsibility. The two clearest examples are the
failure to discuss the relationship between the development of
new communications technologies by the market and their application
to the delivery of public services and the failure to integrate
policies for analogue switch-off and for universal broadband access.
Drawing upon his experience as Director General of Telecommunications,
Mr Cruickshank told us:
"I had more than five years of being able to
closely identify the problems of the overlap between the two Departments,
the unnecessary tensions that it brought to the development of
Government policy ... We do not have a Department of Communications,
but that is actually more important, in my view, than the integrated
OFCOM ... I think the capacity of Government to act with the Secretary
of State responsible for the scope of interests which are addressed
in the Communications White Paper would be enormously beneficial."
132. We agree. The immediate aftermath of a General
Election would be the ideal time to make such a change. We
recommend that the Prime Minister establish a separate Department
of Communications with its own Secretary of State and assuming
the relevant responsibilities currently within the Department
for Culture, Media and Sport (relating to broadcasting and the
media), the Department of Trade and Industry (relating to telecommunications
and the Internet), the Cabinet Office (relating to the electronic
delivery of Government services) and the Home Office (relating
to the regulation of videos) at the earliest possible opportunity.
The structure of the new regulator
133. In July 1998, at a time when the Government
seemed disinclined towards establishing a single regulator, the
Communications Green Paper stated:
"There are concerns ... about the unwieldiness,
transparency and accountability of a single regulatory body. While
the idea of a 'one-stop shop' has attractions, the internal structure
of large organisations can be complex and more confusing to those
outside than a series of separate organisations with clearly defined
While we have no doubt that the advantages of a single
regulator far outweigh the disadvantages, the White Paper is not
precise about how concerns about the unwieldiness, transparency
and accountability of a single body will be alleviated.
134. In 1998 we argued that the new single regulator
should take the form of a Commission, with a sub-commission structure
reflecting distinct functions such as those concerning radio and
with sub-commissions having their own boards and the power to
The White Paper does not say a great deal about the internal structure
of OFCOM. The Government does state that "we expect that
the regulator will be governed by a small body of executive and
non-executive members, rather than a single individual" and
the White Paper refers to that body establishing "the strategic
framework for the regulator's work".
The Government also acknowledges that, "at least in the short
term, some of OFCOM's work, such as spectrum management and the
regulation of distinct media like radio, will require different
approaches and expertise".
135. Some evidence called into question whether the
need for different approaches was in fact the "short term"
issue that the White Paper appears to imply. Both the ITC and
a former Director of the Broadcasting Standards Council pointed
out that, while competition regulation was best carried out by
a small core of professionals, content regulation raised wider
issues about consumer expectations that justified broader involvement.
Witnesses from the radio sector voiced concern that the continuing
distinct needs of radio were not properly reflected in the proposals
for the structure of OFCOM.
The Radio Authority advocated the establishment of a separate
Radio Committee as a sub-committee of OFCOM to avoid radio interests
136. We consider it vital, not least on grounds
of public accountability, that the internal structure of the new
regulator is set out in the legislation giving effect to the proposals
in the White Paper rather than being left to the governing body
of the new regulator to determine. In particular, we recommend
that the legislation establish a mechanism to provide for greater
lay involvement in content regulation than in competition regulation
and create a distinct body within the new regulator responsible
137. The proposals for the new regulator represent
a fusion of elements from current competition regulation and from
current broadcasting regulation. The former sector is dominated
by single statutory regulators, such as the Director General of
Telecommunications. The latter is characterised by a collegiate
approach. Some evidence suggested that the new regulator should
follow the Director General model.
In 1998 we rejected such an approach, specifically advocating
the creation of a Communications Regulations Commission.
The powers that the new regulator will have are so extensive
that a collegiate approach is more appropriate than regulation
by a single individual. We welcome the fact that this is reflected
in the White Paper, but regret that a somewhat different approach
is implied in the proposed title for the new regulator. We consider
that the internal structure would be better reflected if the new
regulator were called the Communications Regulation Commission,
and we recommend accordingly.
138. In 1998 we recommended that "one or more
members of the Communications Regulation Commission should have
a duty to represent the interests of consumers, supported by appropriate
research capacity within the staff of the Commission".
The White Paper goes further, proposing the establishment of an
independently appointed consumer panel to advise the regulator
on consumer views and concerns on service delivery, with a power
to publish its findings and conclusions.
The National Consumer Council welcomed this proposal, but argued
that the panel's role should not be confined to "service
delivery" and should include "specific duties to represent
the interests of disadvantaged consumers".
We welcome and support the proposal to establish a consumer
panel. We recommend that the panel be empowered to examine and
to seek to represent the interests of all consumers and potential
consumers and not be narrowly confined to issues of service delivery
for customers with a financial relationship to service providers.
Transparency and accountability of the new regulator
139. The White Paper states that the legislation
establishing the new regulator will give OFCOM "suitable
duties" in line with the principles of transparency and accountability,
but does not specify these duties.
We raised with Mr Smith the possibility that the new regulator
might be expected to meet in public except when the governing
body was considering matters of commercial confidentiality. Mr
Smith thought that many issues for the new regulator would be
commercially confidential, but said that, "with that proviso,
it would certainly be my wish that OFCOM should be as open as
it can be in the way in which it conducts its affairs".
We recommend that a specific duty be imposed on the new regulator
to ensure that its governing body and its sub-commissions or committees
meet in public unless the governing body is satisfied that, in
the case of any particular issue under consideration, the interests
of public disclosure are outweighed by the need for commercial
confidentiality. With such a need to weigh these factors in the
balance, we would not expect all meetings concerning commercial
activities to be held in private. We further recommend that legislative
provision be made to ensure that, where any decision is reached
by vote, the voting records are published and to require that
all meetings with broadcasters to discuss their annual reports
on delivery of programme statements are held in public.
140. The 1998 Green Paper noted as one of the principles
for future regulatory bodies that "Parliament must have an
effective means of holding regulators to account".
Despite this, and despite the fact that the White Paper highlights
a need for the regulator "to develop good links with the
relevant policy committees ... of the devolved assemblies",
absolutely no reference is made in the White Paper to the new
regulator's accountability to Parliament.
We consider that close scrutiny of the establishment of the
new regulator and its work will be a crucial task for the relevant
select committee or select committees of the House of Commons
in the next Parliament.
(1997-98) 520-I, para 140. Back
425 Ibid. Back
5010, p 4; Q 630. Back
4022, para 5.17. Back
(1997-98) 520-I, paras 158-159. Back
5010, para 8.6.2. Back
para 8.6.3. Back
pp 143, 203. Back
pp 65, 171; QQ 256, 270. Back
pp 92-93; Q 313. Back
p 57; Q 137. Back
(1997-98) 520-I, para 158. Back
para 159. Back
5010, sect 7.5. Back
p 2. See also Evidence, p 232. Back
5010, para 8.5.3. Back
4022, para 5.5. Back
5010, para 8.7. Back