Examination of Witnesses (Questions 460-473)|
CBE, DAVID EDMONDS,
TUESDAY 26 FEBRUARY 2002
460. I was going to make a comment about how
complex and how detailed the European legislation is; heaven forbid
that we are seeing one of these every five years, or so. But let
me move on a little, to culture. We are bringing together quite
a lot of industries, obviously, all working in the same area,
but with very different cultures, and I picked up quite an interesting
comment, in an article yesterday, which I would quite like to
read, it is fairly short, but I think it highlights some of the
difficulties that there might be in the culture of the new body,
it is from yesterday's Guardian, the Media Section. "It is
quite a task to mould the semi-opposed camps, fighting for the
soul of OFCOM, and create a new culture," says an insider.
That's a reference to the fact that OFTEL's telecoms approach,
always on the lookout for sharp practice, is foreign to commercial
broadcasters with their `fluffy' cultural obligations and preoccupation
with public taste and attitudes." How do you reconcile all
of that in this new body?
(Mr Edmonds) I think you reconcile it from building
the body, and, obviously, to a large degree, this will be outwith
our ability, because the Board of OFCOM will be appointed by Ministers,
hopefully, the chair and Board members, during the summer. I think
you build it by building it in a very careful way. And, if I may
use a phrase that I used before, it is an aspiration that the
five of us have, to do with creating something that is world-class.
The five of us have sat there now for the last year, working out
how we could actually move into a world where we had got the highest
standards of regulation, which we would all subscribe to, which
we would all try to apply. I think you do it by having an organisation
that is very horizontally led; if you look at the Towers Perrin
report, you will see there are some suggestions that you actually
get into working across the organisation by working in project
teams, so people work with each other, people who have got different
expertises, in a different kind of way.
461. In terms of the businesses which are coming
together and which are going to be regulated, there is going to
be a fairly strict hierarchy. Your industry, the telecoms industry,
is clearly, in market terms, the largest industry. Television
is going to have to come to terms with the fact that it is second
in the hierarchy, whereas it has led in the broadcasting field,
and obviously the Radio Authority has its own concerns about being
squeezed out. That is going to be a very, very difficult chess
game to play?
(Mr Edmonds) It is going to be a difficult chess game,
but it is going to be a chess game played against the background
of European Directives, and the designation of the separate markets,
the way in which separate markets are analysed, is going to be
looked at in the context of what Patricia was talking about before,
the way in which content is dealt with separately, the Content
Board, which, again, as she says, all of us agree with. I think
it is a difficult process, but I do not think it is a process
that, given the amount of preparation that we have put in so far,
I hope you see the evident team-work between the five of us has
made some progress towards. I do not think it is an impossible
target, I think it is a very achievable target.
(Mr Stoller) May I add that, essentially, that is
the trade-off you will have to make, in exchange for OFCOM, the
benefits of OFCOM; converging the work that currently five people
do, and doing it in a new way, will have a downside, and the downside
will be resolving all of those tensions, the tension, I do not
accept the word fluffy at all, between the creative, social issues
and the market issues, and OFCOM is going to have to hold that
tension very precisely and very carefully. Of course, it is not
easy, but you cannot have converged regulation unless you can
find a way of holding those two items in tension; and we believe,
the five of us working together, while we do not always agree,
that actually we have found ways of doing that, they may not be
the ways that OFCOM adopts, but they are models for the fact that
we believe this can be done.
462. So what are the principles that are going
to be at the centre of the new culture of this new body?
(Ms Hodgson) I think they have been very well expressed.
Competition, in the interests of the consumer; certainly, access
to a wide range of high quality services and programming. OFCOM
clearly will have to hold these things in balance, and we do not
think it is easy, but we are encouraged by the amount of progress
that we have already made; we see particular areas that will require
real focus, and we think it is a combination of getting the structures
right, when the new OFCOM Board makes decisions about those, but
also building up, with collaboration between us and our colleagues,
understanding each other's traditions and cultures. Broadcasting
regulation does not feel very fluffy, I have to say, there are
some very tough issues, when you think of the infrastructure roll-out
in cable, satellite and terrestrial, those have been very tough
business issues, decisions that have had to be taken by the regulators.
(Mr Hendon) Could I just answer that, from the sort
of totally unfluffy end of the business, so to speak. I think
that, if you like, a test will be whether we produce a regulator
which enables entrepreneurs, who have ideas about exploiting technologies
to deliver services to people, to go to one place to get the decisions
that affect the way that their business will work and the viability
of that business. And I am thinking about the fact that services
that are delivered over radio, or television, or to mobile `phones,
as WAP, or over the Internet, or whatever, they are going to be
partially interchangeable, and they are converging now, and they
will continue to converge. And at the moment people have to be
really expert in several different sorts of regulation, to know
where to go to get the different permissions, and very often,
at the leading edge, we are not sure ourselves quite where the
boundaries are, because they were not in the minds of the legislators.
So, I think, having a converged regulator will make a big difference,
from the point of view of people who have to invest in the things
that ultimately will deliver services to people.
463. Just one, quite separate issue, and harking
back to the Chairman's question about Ali G, I think that it is
quite easy to have a pop at the BBC, but can any regulator control
a situation, which I think we are all fairly familiar with, which
is, basically, anyone who has got a book, a film or a record to
sell can draw attention to themselves by excessive behaviour;
can you control that, particularly when it is on a live broadcast?
(Ms Hodgson) Yes, you can, by sanction; if you have
a sanction to fine, you will not prevent it entirely, of course
you will not, but you can keep it under reasonable control. Sanctions
are the crucial thing.
(Mr Bolt) I think we have had a fair success in influencing
even the BBC without draconian sanctions; though I agree with
Patricia that, as I have said earlier, sanctions are desirable.
But, I think, the idea of control, if it were part of what is
common, you asked about the culture and what has got to change,
we have traditionally regarded both these industries as things
automatically which are regulated, the only question is how you
regulate them. You have these huge Bills every few years, I think
we are moving to a situation where expertise is absolutely key,
where interventions are smart and are diminishing, and that the
extent of control and interference in these industries is going
to diminish over the years, and that is going to be part of the
culture which OFCOM, I think we all agree, from our different
perspectives, is going to have to encourage.
Chairman: But, in fact, technology allows for
it now. The person who wrote to me today, in charge of a radio
station, said that if he had broadcast that Bill he would not
have signed that particular person up, then what happens is that
live is not totally live, there is a few seconds' delay and you
can intervene; and that is exactly what happened in the live transmissions
from the Big Brother house, in view of the propensity of some
of the inhabitants of that house not to moderate their language.
464. I just wonder, previous witnesses talked
about broadband being rolled out, I am not sure how you can control
broadband, from an OFCOM perspective; if you have permanent Internet
access, how do you control that?
(Mr Edmonds) You do not control broadband. The job
of the regulator currently, and I think the job of OFCOM, will
be to stimulate the roll-out of broadband on an ever-increasing,
and hopefully ever more wide, geographic scale; from then on in,
the kind of controls we have just been talking about are much
more difficult, surely.
465. Currently, my children and I get between
20 and 30 spammed e-mails, of the most disgraceful pornography,
sent to us on a daily basis. Now, forgive me, this is going to
get worse, not better. So how are any of you going to cope with
a broadband scenario that does just send pornography to anybody,
irrespective of whether they want it or not?
(Ms Hodgson) In the United States, I think they have
introduced quite rigorous laws about the removal of such material.
It would be a question for Parliament whether they wished to think
about that. Up until now, there has been a very strong presumption
that nothing should get in the way of new media roll-out, and
that regulators should stand back from it. I am very interested
to see the lines of questioning coming from Members today, which
is obviously illuminating the complexity of this topic.
(Mr Bolt) I think this is a question really you ought
to ask the Government, which is quite clear that OFCOM is not
going to start trying to sort of catch up with the e-media and
introduce the kind of relatively strict controls that it has had
in other areas.
466. But if, as David Edmonds says, it is going
to be very much harder, we have to sort of begin to wonder what
this debate is about then. As Telewest said, most of you are broadcasters,
except Mr Edmonds, and you have got a broadcast hat. We are not
going to a broadcast field, we are going into a new communications
world, of which broadcasting will be only a very small part?
(Mr Edmonds) We have got the communications world
already, have we not, Mr Wyatt, where, for example, unmetered
access to the Internet in narrow-band is available to, has been
taken up, indeed, by, a large number of people in the UK; we have
already got broadband roll-out to a degree. We have the Internet
Watch Foundation, which acts as, I think, a fairly effective watchdog.
467. It cannot do anything. I have been in touch
with it; it cannot do anything.
(Mr Edmonds) A fairly effective watchdog, in some
of the areas. We have got the basic statutory law about obscenity
and pornography; all of that applies. I think the question that
you are putting to us is the question that regulators the world
over are looking at, how do you give that dimension, as recently
in China, they do it in China very easily by state direction,
state determination; we have gone down a rather different route,
with self-regulation and relying on the statute law.
468. I know. I guess we just license the ISPs,
and they could sign up to a Code of Conduct, like the broadcasters
(Ms Hodgson) Yes.
(Mr Edmonds) All of us do, of course, and there are
abilities for people, ISPs do that fast, remove things, and do
remove them very quickly.
469. On mobile communication, how do we regulate
anything to do with mobile communication? For instance, it will
be possible, shortly, at Bluewater, in north Kent, for you to
walk through an infra-red point where they will have the biographical
details of you and they will be able to tell you, on your mobile,
what is available at Gap, or IKEA, or wherever, whatever. Now,
presumably, also, they will be able to do lots of other things
I do not necessarily want them to do. So I do not understand how
we are going to even start to regulate this?
(Mr Edmonds) You cannot; I mean, how do you stop people.
In some ways, you can stop people telephoning you at the moment,
in terms of some of the regulation that applies, in terms of advertising,
but, in terms of people picking up the `phone and telephoning
you at the moment, what is the difference between what is happening
now, in what you get, and what will be happening on your mobile
`phone. Regulation in mobile telephony is all about economic regulation,
at the moment, and it is nothing to do with the content and what
goes over that telephone system at all.
470. But that is going to be the predominant
means of people under 35 communicating with each other?
(Mr Edmonds) Indeed; but, at the moment, they communicate
with each other by short messages, and (a) nobody had predicted
the enormous take-off in that, and (b) I do not think anyone has
suggested that we try to look at what people are saying to each
other in their short message systems.
471. The Chairman talked about a few moments'
delay to stop naughty words being said. I am not sure how worried
they are about us, because we are not shown until Sunday morning,
I think; none of us even watches ourselves, I think, at least
I do not watch myself, I cannot speak for my colleagues. It is
really pleasing that you were proactive and got together and worked
together on the Bill, that could have been very different, could
it not, so I think you deserve every congratulation for that,
and our thanks. Tony Stoller said, with regard to the BBC, he
seemed to be happy that OFCOM should regulate really the broadcasting
standards, the taste and decency, and then that would be all that
OFCOM would have to do with the BBC; was that what you said?
(Mr Stoller) No, I hope not. If I may, I was trying
to give an illustration of some of the types of areas where OFCOM
should have a role in the BBC. There is a range of areas, and
indeed you can debate them. If I look from a radio perspective,
and colleagues may feel others, from the point of view of different
media, from a radio perspective, we continue to have this difficulty
of two competing teams doing the preliminary planning of the frequency
spectrum. Now the radio spectrum, the radio radio spectrum, is
pretty jammed, and, effectively, you have competing teams, which
the Radiocoms Agency will occasionally bring together for sense.
That seems to us to be the sort of activity that should be being
done by OFCOM. We think, similarly, that where the BBC wants to
launch new radio services, and the same may well apply for television,
that it is very strange that the BBC goes direct to the Secretary
of State to get that permission; surely, this is something where
OFCOM should have a role in advising, very possibly publicly advising,
the Secretary of State on what is available. That, it seems to
me, is a protection for the BBC just as much as a protection for
anybody else. We have seen the delay in approval of digital services,
arising, at least in part, from the timing of the general election;
now, actually, that is not a good basis for handling that type
of broadcasting. And I could go on, but colleagues do not want
472. Patricia was leaping up when I misinterpreted
what you said.
(Ms Hodgson) There is also the competition angle,
because the BBC will be under OFCOM for all competition issues
(Mr Bolt) And, I think, just emphasising, if I may,
Tony's point, about new services, in a way, not only has there
been delay but the alternative to having OFCOM, as it were, policing
the terms of the new services is to have ever more increasingly
sort of detailed specifications and monitoring directly by Government,
which is, in effect, what has been dragged into the process for
most recent new BBC services, precisely because the competition
and market implications are so severe. Now, whether it is better
to have a Government Department doing this than an independent
regulator, I think we would take the view that the latter is preferable.
473. I would accept the technical side of things,
obviously, the distribution of wavebands, and everything else,
must be done by OFCOM, and if we accept, the first thing you did
say was, that the decency and taste was something for OFCOM, is
there not an argument, from a competitive point of view, for just
letting the BBC, rather than try to define public sector broadcasting,
just saying, well, the BBC is publicly owned, and let them get
on with it and compete in the very best way that they can; and
they are very successful and innovative as well with it?
(Ms Hodgson) As we understand it, what the Bill will
try to do is to bring standards, measurables, commitments, like
independent quotas, I think they want to add regional matters,
competition issues, bring all that under OFCOM, the level playing-field
idea, and to try to accompany that with achieving what you are
suggesting; that is to say that the programme priority decisions
remain with the BBC and the BBC Governors. And I think what Tony
was trying to say earlier was, obviously there is a debate about
how far along that road you go. For example, it might be argued
that it was proper for the scale of the BBC and the funding of
the BBC to remain a matter for Ministers that are answerable to
elected representatives; because, after all, there is a public
impost that pays for it, actually. Where, however, you want some
transparency in how those decisions are reached, it might well
be very helpful for OFCOM to offer formal advice, which can be
informed by the competition in the market, the effect on the market,
and so on, and that might mean that there are much more transparent
and well-informed decisions made.
(Mr Bolt) Yes; and if I may add, hopefully, OFCOM
will have a consumer focus throughout and will have a view on
what the BBC is offering which is giving a distinctive benefit
for the consumer and actually is being done from a distinctive
public service perspective. You have almost kind of implied that
if the BBC says it should be allowed to do it in its current service
then it must be. I do not think that is a view most of us can
Alan Keen: That is very helpful; thank
Chairman: I would like to thank you very
much indeed. It has been a very, very powerful representation
that you have made today, helpful, of course, in our examination
of the Bill when it comes forward, but immediately helpful, of
course, in view of the remaining stages of the OFCOM Bill in the
House of Commons next Wednesday. Thank you very much indeed.