Examination of Witnesses (Questions 480
TUESDAY 5 MARCH 2002
480. I suppose under any argument: do you think
for Tiers 1 and 2, which are the two areas where the BBC does
fall under OFCOM, there would be sufficient argument in your view
for OFCOM to have control, if you like, or sanction over whether
the BBC in future introduces more digital viewers to different
(Ms Bradley) This really hangs on the question that
for us is critical, which is about what public service broadcasting
is because, in a sense, you can only determine the extent to which
something is a commercial proposition at the BBC if you are able
also to identify what is part of the public service broadcasting
remit of the BBC. What we have tended to do, as we all know, in
the past period is to identify everything the BBC does with public
service broadcasting. What you are pointing at, and I think we
would agree with, is that there are increasingly some things which
the BBC is doing which should be treated as commercial propositions
and, until we have got some definition or some sort of framework
for PSB, we are not in a position clearly to identify which of
those things it is that they do which would fall under 1 and 2
or alternatively Tier 3. One of the things that we have said to
you before and we shall say again is that one of the primary drivers
for the establishment of OFCOM from our perspective is to guarantee
universal access to a diversity of programmingin other
words, public service broadcastingand to recognise, in
doing that, that the BBC is not the only provider and that we
need some framework, which we think is a bit more than this Committee
recommended in its previous report and encapsulated in the principles
of the BBC. We would recommend going back to our own proposition
that public service broadcasting can begin to be defined if you
look at consumer needs for the universal access to a diversity
of programming. We have elaborated on that in the past.
481. You raised the point that there are other
broadcasters, other than just the BBC, who are public service
broadcasters. I personally think you are quite right in saying
that. Are there any aspects of BBC broadcasting which you feel
are not public service broadcasting?
(Ms Lennard) We have not taken a view on the nitty-gritty
detail of the concept. There are clearly divisions at some point
in the consumer interest in content which are quite broad and
to do with the quality, diversity and choice. There are more subjective
views about content which we would possibly term as more individual
citizenship issues. What we would like to see is the Government
setting out a framework for the BBC which is not unduly prescriptive,
allows some room of course for flexibility and innovation and
risk-taking but is rooted in terms of the consumer need for universal
access to a diverse choice of quality services. What we also think,
particularly with the advent of OFCOM, is that there should be
a greater role for OFCOM in deciding on the BBC's proposals for
new services. We think the original exercise was fundamentally
flawed in terms of the money they were awarded before the proposals
had been made, and also the consultation with the public had some
flaws as well. We would also accept that there is and should be
a role for the BBC on digital, but that that decision could be
removed from the political arena. Once we have an overall framework
for the PSB, then perhaps it should be more a decision of OFCOM
to decide on those sorts of proposals.
482. Can I just go over some of the points Michael
Fabricant has raised with you about communications and the Consumer
Panel? Do you see a sense that you will view it and will start
to commission information about the BBC and yet at the same time
the BBC will be commissioning its own information as well? If,
for instance, you look at the BBC investigation into, say, its
on-line service, basically it asks viewers: is it wonderful, brilliant,
marvellous or extra-marvellous? It does not actually ask hard
questions like: should there be a public service on-line service?
That is the issue I have been arguing about for five years. Do
you see inevitably a clash there which makes the case even more
for the BBC being in it?
(Ms Bradley) There certainly might be. We certainly
see a role for the Consumer Panel in relation to the BBC, even
if outside OFCOM, under Tier 3 as well as other public broadcasters
and indeed a whole range of providers regulated by OFCOM. We do
not think the BBC should be immune from the considerations and
operations of the Consumer Panel.
483. Following on from what Derek Wyatt has
just said and your answer to him, can you act as an angel's advocate
and give us reasons or a reason why the BBC should not come under
(Ms Bradley) The reason why they should not come under
(Ms Bradley) As perhaps the most vehement protagonist
throughout this discussion for the BBC to come under OFCOM, you
are asking for intellectual gymnastics!
485. The point is this: you have no vested interest
of any kind. You very much exist to protect the consumer. Therefore,
you are not a commercial opponent or competitor with the BBC.
You have a relatively objective approach. Nobody has a totally
objective approach, not even me. What I am asking you is this:
can you think of any reasons which you regard as persuasive as
to why the BBC should not come under OFCOM?
(Ms Lennard) No.
(Ms Bradley) No.
486. Just therefore looking at how the BBC moves
forward in this more complicated age, have you done any research
on whether the BBC should become a trust so that its public service
obligation could be written into the trust? I ask in the sense
that I am a shareholder in the BBC; I have paid my licence fee
since I was 18 and I am never asked by the BBC what my views are.
I am like you, a consumer, but they never ask me. I would like
to have some say in what the BBC does as a shareholder in the
sense that I have paid my licence fee for 30-odd years.
(Ms Lennard) I must say that we have not investigated
that. We are about to follow up our work on public service broadcasting
this year with another report which will include looking at methods
of funding. I think that is a very interesting suggestion which
we will certainly consider as part and parcel of our further work
on the PSB this year. The other thing that we could mention is
that we are also doing a separate piece of work, which is broader,
on consumer representation and consumer involvement, which we
will also be publishing this year and which will have very forthright
recommendations as to how public bodies, including the BBC, should
go about properly involving its consumers.
487. Your question are so stimulating that I
must interrupt. Mr Wyatt has suggested this course of action as
a trust but would not another way of doing it be that when the
BBC Charter expires in 2006, it should be replaced by an Act of
Parliament under which the BBC should be given obligations in
the same way as the Broadcasting Act gives Channel 4 obligations?
After all, Channel 4 is undoubtedly a public service channel which
is given specific statutory duties.
(Ms Bradley) Yes, it would, and I think the rather
general response to your question is that we have, not just in
the context of public services broadcasting but more broadly,
a very strong interest in how one can guarantee some public policy
objectives through the structure and funding of a range of organisations,
public and private, and what might happen in relation to the BBC
is but one example of that and there are many others: Railtrack
is one that pops into my mind immediately. This is an issue that
we are coming at from two directions. As Linda has said, we are
going to be looking at it in relation to the future of PSB but
we plan to look at it more broadly in relation to guaranteeing
universal access to a range of services, however they are delivered.
I am afraid that is not much use to you because it is in the future.
I gather you are going to be looking at Charter renewal perhaps
later on in the year. Maybe we will have something more to say
at that point.
488. Is there any reason, apart from the fact
that that is the way it has been for 75 years since January 1st,
1927, why the BBC should continue to operate under a Royal Charter
rather than the way every other broadcaster in this country operates,
namely under an Act of Parliament?
(Ms Bradley) I do not think we can give you as positive
or negative a response to that as we can about whether the BBC
ought to come under OFCOM because we simply have not done the
work to establish it. What is clear to us is: that this is a question
worth asking. When we have asked it and looked at alternatives,
we might be able to provide you with a more positive or negative
489. On the debate, we have not had a debate
either within the Department of Culture or anywhere else that
I can think of about what a public service internet service would
be; neither have we had a debate about what a public service broadband
service should be. Is it your view that those debates will come
out of OFCOM but, because the BBC does not actually have to take
any notice of OFCOM because it is not in that sphere, it makes
it even more pertinent that it should be? These are big issues
and questions. The BBC has spent more money on its on-line service
than Yahoo or Google, which is quite extraordinary. Without anybody
saying yes or no, it has just done it. So there is no regulation
by the Government, there is nothing. It does concern me because
as we go into the broadband arena, there is no debate whatsoever
on public service broadband needs.
(Ms Bradley) There is a point worth making here about
the role of Governors as opposed to the role of OFCOM in terms
of the overarching strategy. In relation to internet access and
broadband generally, it is not at all clear to us what the Government's
overarching strategy is and the extent to which it believes that
broadband is a necessary element in delivering universal access
to the internet and digital generally. There seems to us to be
several different lines of thought going on here and they have
not been properly connected. There is the one about digital, the
one about broadband and the one about universal internet access.
They are running in separate streams, not necessarily completely
disconnected but they are certain streams. It seems to us that
making a decision about the future of access to the internet in
the UK is a decision for Government in terms of determining the
overall policy direction. Once OFCOM is in place, it is for OFCOM
to work out how that can best be delivered and in that context
it would be a travesty if they were not able to influence the
delivery in relation to the BBC.
490. Last week, and coincidently the morning
we were meeting, the BBC announced its new fee for broadband.
Can you see a point where, towards the end of this year, broadband
access will be relatively commercial both for the home and for
business, but actually the content is negligible, such that the
whole broadband thing will go up in smoke because no one is doing
any work whatsoever on content?
(Ms Bradley) I think that is a concern that we have
very generally. There are two issues in there. One is that I think
we are not yet persuaded that there is clarity about the significance
of domestic broadband as opposed to broadband in the commercial
environment. Putting that to one side, we are very concerned that
a great deal of this debate in all three of those arenas actuallyinternet
access, digital and broadbandis being technology-driven
rather than content or customer led. That will remain the case
until we have a clearer sense of what it is that we want people
to have access to and which of those things we think it is essential
people have universal access to, which goes back to the rather
broader question about taking broadcasting to be more than what
comes through a television.
491. My real nervousness is that we have not
had a public sector analysis of the impact of broadband and so
we do not know how the national health would be improved by broadband
or from the Home Office or from education. If, for instance, broadband
suddenly goes like WAP, and at the end of the year it is into
a cul-de-sac, we will have lost a golden opportunity to revitalise
that public service. There seems to be no way to have this debate
in public either. Is that a concern of yours too?
(Ms Lennard) I think it is very much so and, as you
say, the role of the impact, what is happening or not happening
in terms of the public sector and the implications. Also there
are a variety of pilot schemes in all three of those arenas going
on around the country which are all, I am sure, very worthy and
very necessary but what is needed is the proper evaluation which
is made publicly available about particularly the usage of those
schemes and to what extent they are reaching people who might
not otherwise have access to the internet. Are they really reaching
people who might otherwise not have the skills or confidence or
money to have access to the internet at home? So we need a debate
which is both about the role of the public sector but also bringing
together the different streams and their role in delivering the
government's universal internet access aim and indeed clarification
as to what that goal is: is it access to the internet at home;
is it in the local community; do we need to prioritise particular
groups in the various communities who may need help either with
initial access or with skill equipment, whatever, either because
of mobility problems or because of where they happen to be living.
492. You obviously keep a very wide, broad watch
over activities both in the public and private sectors. If we
look back on what has happened in the public sector over the last
few decades, in its 54 years of existence the National Health
Service has been subjected to countless reorganisations. The Post
Office has been turned from a government department into a state
corporation, and its activities have been amended. The benefits
system has been changed unrecognisably from the days of national
assistance right through to the days of income support. Private
sector companies are constantly changing in accordance with their
market prospects. Can you think of any public sector organisation
or any private sector organisation, and in the case of the private
sector, an organisation with an income of £2.5 billion a
year, which operates on exactly the same structural basis as it
did 75 years ago?
(Ms Bradley) You ask an impossible question. It is
the equivalent of trying to prove that something is safe, I think.
We do not have a rabbit to pull out of a hat to say, "Here
is the equivalent". It has not changed at all, whereas other
things have around it. I guess that reinforces our view that it
is time for a review.
493. Cross-media ownership: I presume the Consumer
Council has a view on whether we should be liberalising all the
rules, whether it is in consumers' interests in this country to
allow a single ITV to exist, whether Sky should be allowed to
own Channel 5, and so on. What is it?
(Ms Bradley) To be perfectly honest, we have not done
any work in this area in the context of broadcasting. We have
a fantastically wide remit as an organisation and we are really
quite small. We deal with everything from education to world trade
and communications is a one-person operation in an otherwise really
quite small organisation. No, I am afraid, I have to disappoint
494. I will try it another way. You would not
want to speculate. Do you have any personal views on the issue?
(Ms Bradley) We have a broad policy viewI would
not speculate a personal viewwhich is that competition
to a great extent serves the consumer purpose and that sometimes
combinations of organisation in different ways will achieve new
offerings for consumers which are beneficial in terms of creating
dynamic markets, but that always has to be tempered with an appropriate
level of regulation to achieve both an acceptable level of protection
for the consumers to minimise their treatment and to guarantee
universal access, which tends to be the big issue in this environment.
We have that rather general principled position but not a specific
495. That sounds like quite a right-wing ideology
really: basically the market will provide except that sometimes
where the market will not provide, then we have to rig it a bit.
(Ms Bradley) I would not say it was right wing. It
recognises that markets can deliver some very good things for
the consumers but it also recognises that even where markets are
operating really quite well, there are very often problems either
for particular groups of consumers or in certain market sectors
which require someone to intervene, a regulator, and that is where
it ceases to be a market solution.
(Ms Lennard) May I add that this question obviously
needs to be considered within the public policy arena of public
service broadcasting and therefore we would also have considerations
to do with diversity and plurality. Again, we are looking at those
at the moment as general principles because we have not done the
detailed work. Those are the sorts of issues, as I understand
it, we will be taking into account.
496. In terms of universal access, do you think
we have a genuinely open regime which allows consumers free and
intelligent choice in digital television?
(Ms Bradley) No.
497. What do you think Government should be
doing to make sure that we do?
(Ms Bradley) There are a number of things there. The
first is that it is quite clear from research we have done at
the retail end that consumers are being ill-informed and often
actually ill-advised when it comes to making decisions about what
to purchase and why. So there is a crying need for some much more
transparent information which is made available to consumers in
ways which relate to decisions they need to make. We have called
for a government information campaign in that respect, but there
also needs to be better information at point of sale, so training
for sales assistants, for instance, is the sort of thing we would
want to see. There are then also questions about the extent to
which there is technology delivery of what people want because,
although there has been a reasonably rapid take-up amongst a significant
proportion of the population of digital services, there is a very
substantive group of consumers who are absolutely not persuaded
clearly that this is something to which they want to have access.
It is clear that there is a group of consumers, unquantified but
a significant group of consumers, who would not want to take advantage
of the new digital services which might be on offer and will only
want to access broadcasting as it is now and who will require
cheap set-top boxes which give them that access. We do not yet
have that, although we now understand that is in development.
498. It is a shame, it seems to me, that still
if you want to buy an integrated digital television set, you end
up buying something which may be incompatible and you will not
be able to change from ITV digital to Sky in a year's time. That
seems to be a major consumer problem and can only harm the market
developing faster. As it happens, I have bought two televisions
in the last two years and I bought both traditional analogue ones
because I just had no confidence that anything else was not going
to be obsolete in 18 months' time. Can I go briefly to the BBC
issues that I know you have already talked about a bit with the
Chairman. As I understand it, you are fully in favour of abolishing
the Governors. That seems to be bizarre in the extreme to me.
(Ms Bradley) No, what we are interested in doing is
separating what we see as being two very different roles which
are sometimes going to be in conflict with each other. One is
the functions that the Governors fulfil as regulators in setting
objectives for a public policy delivery, if you like, through
public service broadcasting and measuring those, and the other
is as a non-executive body determining the strategy and policy
of the BBC as an organisation, whether it is a public organisation
or a commercial organisation. Those two things will, from time
to time, come into conflict with each other and we think they
should be separated. We think there is a very strong case for
making it clear that regulatory functions will be fulfilled in
the same manner and with the same broad policy framework as regulation
of the broadcasters. We cannot see any logic in having it done
under a different framework.
499. I think I agree that the Governors should
be more self-evidently independent and I felt that the reforms
that were brought in a week ago involving another ten people being
employed by the Governors probably means that they will be able
to do more work, but still the Secretary of the Board and the
Secretary of the Governors are the same persons; they are housed
in the same building. My worry is that the Governors will still
be supernumerary members of the board of management. Do you think
if the BBC were to adopt the Dearing recommendations of 1948 and
to take them out of the building and fund them separately, that
that would meet some of your requirements?
(Ms Lennard) Physically taking them out of the building
would not solve that because one is looking at what their roles
are. If they were still retained, as Anna said, with possibly
conflicting roles in terms of their regulatory role and non-executive
management roles setting the overall policy of the BBC, those
roles would still remain to be in conflict. We are pleased that
they will have some interim measures but, as we said earlier,
there are some serious questions to be asked as to how effective
those measures would be. I do not think that physically removing
the Governors from the building would actually solve the underlying