Select Committee on Culture, Media and Sport Minutes of Evidence

Examination of Witnesses (Questions 480 - 499)



  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 channels?
  (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 programming—in other words, public service broadcasting—and 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.

Derek Wyatt

  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 OFCOM?
  (Ms Bradley) The reason why they should not come under OFCOM?

  484. Yes.
  (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.

Derek Wyatt

  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 answer.

Derek Wyatt

  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 actually—internet access, digital and broadband—is 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.

Mr Bryant

  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 you.

  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 view—I would not speculate a personal view—which 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 one.

  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 issue.

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