House of Commons - Culture, Media and Sport

Select Committee on Culture, Media and Sport Second Report

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".[424] 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 services".[425]

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.[426] 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."[427]

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 responsibilities."[428]

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 publish reports.[429] 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".[430] 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".[431]

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.[432] 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.[433] The Radio Authority advocated the establishment of a separate Radio Committee as a sub-committee of OFCOM to avoid radio interests being neglected.[434]

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 for radio.

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.[435] In 1998 we rejected such an approach, specifically advocating the creation of a Communications Regulations Commission.[436] 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".[437] 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.[438] 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".[439] 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.[440] 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".[441] 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".[442] 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.[443] 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.

424 HC (1997-98) 520-I, para 140. Back

425 Ibid. Back

426 Cm 5010, p 4; Q 630. Back

427 Q 575. Back

428 Cm 4022, para 5.17. Back

429 HC (1997-98) 520-I, paras 158-159. Back

430 Cm 5010, para 8.6.2. Back

431 Ibid, para 8.6.3. Back

432 Evidence, pp 143, 203. Back

433 Evidence, pp 65, 171; QQ 256, 270. Back

434 Evidence, pp 92-93; Q 313. Back

435 Evidence, p 57; Q 137. Back