Annex B
THE BBC AND OFCOM
INTRODUCTION: EXISTING
REGULATORY FRAMEWORK
1. The existing regulatory framework for
the BBC's public service role is quite distinct. It flows from
the way in which the BBC is constituted. Within the framework
provided by the Charter and the Agreement with the Secretary of
State for Culture, Media and Sport the Governors are responsible
for ensuring that the BBC meets all its statutory and other obligations.
Charter renewal (next due in 2006) offers the opportunity for
Parliament to review the working of the BBC. The Agreement between
the Secretary of State and the BBC sets out a detailed remit,
the closest equivalent to a licence. It does not, however, include
detailed content requirements for broadcasting of so many hours
of news, drama etc. (The BBC's commercial services which are licensed
by the ITC are fully regulated and subject to the same measures
as the services provided by other commercial broadcasters.)
2. Some elements of the present BBC system
are subject to external regulation. This includes some statutory
regulation: for example, the BBC is subject to the complaints
procedures operated by the Broadcasting Standards Commission.
The Secretary of State's power to approve and review the operation
of new services and for material changes to existing services,
also provides external regulation. The publication of the criteria
and direct consultation by the Secretary of State have recently
made the approvals process more transparent.
3. Other public service broadcasters (providers
of Channels 3, 4, and 5) are regulated through conditions imposed
in their licences by an independent regulator, currently the Independent
Television Commission. Particular conditions are agreed with each
licensee upon the award of the relevant licence and licensees
are then are then subject to ongoing monitoring and enforcement
by the regulator.
THE WHITE
PAPER: THE
3-TIER SYSTEM
OF REGULATION
& ITS APPLICATION
TO THE
BBC
4. The White Paper describes a new system
of regulation which is to be generally deregulatory and, in the
interests of fairness, will apply across the board. There will
remain some differences in regulation between the BBC and others,
reflecting the differences in the way they are established.
5. It is an integral part of the new system
to extend the involvement of the external regulator in the BBC,
while increasing the self-regulation of all other broadcasters.
The purposes of the BBC remain different from other broadcasters
and so the form and extent of self-regulation will differ, and
we will retain the core responsibilities of BBC Governors. These
will include upholding and protecting the BBC's political and
editorial independence and calling management to account.
6. The role of the Governors internally
will be unchanged, but the BBC will in addition be subject to
new external requirements policed by OFCOM. Broadly speaking the
BBC will be subject to the same degree of external standard setting
and monitoring as all other public service broadcasters for each
of the three tiers regulated by OFCOM. In addition the introduction
of self regulatory measures for commercial broadcasters (eg requiring
them to review their own performance) will also help create a
common framework for all broadcasters. For both the BBC and other
broadcasters broadly the same balance of self-regulation and external
regulation will be struck. The overall result will be that the
BBC will be subject to greater external regulation and its position
brought much closer to that of other broadcasters.
7. Tier 1 governs those matters that apply
to all broadcasters including such matters as guidelines on the
portrayal of sex and violence. OFCOM will develop overarching
codes tied to the statutory principles, which will bind all broadcasters.
These will also apply to the BBC, and the Governors will be responsible
for developing more detailed guidelines building on the overarching
codes and applying the standards to BBC services. There will be
one specific exception for the BBC: regulation of the impartiality
requirements will remain exclusively with the Board of Governors,
because this is so closely bound up with their overriding role
of ensuring the BBC's editorial independence.
8. Tiers 2 and 3 will apply to public service
broadcasters only. Tier 2 provides for consistent regulation by
OFCOM of quantifiable elements for which quotas or targets can
be set. These will cover the UK quota for independent production,
and quotas or targets for regional production and output, original
production, and the requirement for news/current affairs to be
broadcast in peak time. The same system of quotas will apply to
all. The White Paper says specifically that OFCOM will be responsible
in future for both agreeing and monitoring the BBC's compliance
with the regional production targets, and that there will be a
requirement on the BBC for the first time to provide news and
current affairs in peak time.
9. Tier 3 relates to the qualitative obligations
on all public service broadcasters, including the BBC. For this
tier greater fairness will be achieved by giving other public
service broadcasters a freedom similar to that already enjoyed
by the BBC. A system of self-regulation will operate. All the
public service broadcasters, including the BBC, will continue
to be required to provide a mixed and high quality range of programmes.
They will also be required to develop statements of programme
policy and self-regulatory mechanisms. The statements will be
updated annually.
10. Under this system the broadcasters will
have an opportunity to demonstrate that their obligations can
be better delivered and monitored through self-regulation. The
BBC Governors must equally demonstrate that they are regulating
the BBC effectively. In the run-up to the Charter Review in 2006,
they must show not only that the BBC continues to reach the vast
majority of the audience, but that it also fulfils its public
service remit.
11. OFCOM will report periodically on the
key cross industry issues of public service broadcasting and we
would expect OFCOM's advice to be published. The BBC's Board of
Governors will naturally want to consider observations made by
OFCOM in drawing up the BBC's annual statement and all other broadcasters
will be expected to undertake a similar and formal process.
12. OFCOM will have restricted powers to
resume more detailed controls if there is a major failure by the
commercial broadcasters. The backstop powers for the BBC will
remain with the Secretary of State for Culture, Media and Sport
and with Parliament through Charter Review.
13. The Secretary of State will also retain
the power to approve new BBC licence fee-funded services and material
changes to existing services. OFCOM will, however, give formal
advice to the Secretary of State on the market impact of both
proposals for new BBC public services and for material changes
to existing ones, before she reaches a decision.
14. The BBC will also continue to be subject
to economic regulation, in future principally by OFCOM instead
of the OFT. As now, all broadcasters will be within the same legal
framework and subject to the common obligations imposed by such
measures as competition law and State aids controls.
15. The White Paper refers to the need for
amendments to the Agreement between the Secretary of State and
the BBC. The Agreement itself and any amendments are approved
by Parliament and it is through amendments that the Government
intends to set out the relationship between the BBC and OFCOM.
The amendments will work alongside the statutory duties and powers
that OFCOM will hold and both will be available for discussion
when the Bill is published next Spring.
16. This route fits the constitutional position,
which was reviewed at the time of the licence fee review in 1999.
It will be fully reviewed again in the run-up to 2006 when the
Charter will expire. We do not see the need for another review
at this time and by using amendments to the Agreement we can construct
a relationship that gives OFCOM a role without disturbing the
existing constitutional structures.
BBC COMPLIANCE WITH
REGULATORY STANDARDS
In all cases the BBC's delivery of its remit
and compliance with regulatory obligations will remain the responsibility
of the Governors. However, the BBC will usually be subject to
the same basic rules and standards as other broadcasters and these
will be set out either in legislation or in OFCOM codes.
| Categories regulated
| Standards to be applied | Subject to OFCOM regulation
| Sole responsibility of BBC Governors
| Comment |
| Tier 1—all broadcasting |
| |
| |
| Codes establishing negative minimum content standards set by OFCOM.
| same standards will be applied to all broadcasters
| Y
over-arching code
| own codes within OFCOM framework | Wherever OFCOM develops codes for the whole industry the BBC must comply with those codes but the Governors may set more stringent requirements for the BBC alone.
|
| OFCOM will have powers to consider complaints against its basic standards for all broadcasters including the BBC. Includes the current statutory powers of the BSC.
| same standards will apply to all broadcasters
| Y |
| BBC is already subject to BSC but OFCOM's responsibilities will cover a wider range of basic content requirements. All apply to the BBC.
|
| Rules on advertising and sponsorship. | not applicable to BBC public service
| |
| |
| Provision of fair, impartial and accurate news
| all broadcasters under the same obligation
| | Y
| |
|
|
| EC quotas (independent production). | all broadcasters comply with EU 10 per cent quota
| Y |
| OFCOM will take on OFT's responsibility for monitoring compliance.
|
| Targets for access for people with disabilities.
| same standards will be applied to all broadcasters
| Y
in OFCOM codes
| |
|
| Other existing or potential industry-wide requirements and rules on other aspects of programming eg equal opportunities, training.
| OFCOM will promote across the industry |
Y |
| |
| Tier 2—public service broadcasting
| |
| |
|
| Quotas for independent productions. | 25 per cent set in legislation
| Y |
| OFCOM will take on OFT's responsibility for monitoring compliance.
|
| Quotas for original programming. | different quotas appropriate to each broadcaster
| Y
agreed by OFCOM
| |
|
| Targets for regional productions and regional programming.
| different targets appropriate to the broadcaster
| agreed by OFCOM |
| |
| Availability of news and current affairs in peak time.
| OFCOM defines peak time |
| |
|
| Tier 3—public service broadcasting
| |
| |
|
| Qualitative aspects of broadcasting | all broadcasters will be self-regulating
| | Y
| All broadcasters including BBC prepare annual statements of programme policy and report annually on their performance against them.
|
| | OFCOM monitoring
| Y |
| OFCOM will report periodically on the key cross industry issues of public service broadcasting. "The BBC's Board of Governors will naturally want to consider observations made by OFCOM and all other broadcasters will be expected to undertake a similar and formal process." (WP 5.8.4)
|
| | fall-back powers
| |
| OFCOM will have fall-back powers to intervene in respect of the broadcasters it licenses if they consistently fail to meet their obligations. In respect of the BBC, Parliament and the Secretary of State have fall-back powers at Charter Renewal.
|
| New service approvals |
| |
| |
| New services. | OFCOM licenses commercial broadcasters BBC requires Secretary of State approval
| |
| OFCOM licenses non-BBC services and any BBC commercial services.
Secretary of State advised by OFCOM on market impact of BBC services.
|
| Economic regulation |
| |
| All broadcasters including the BBC are within the same legal framework, eg competition law and State aids controls.
|
February 2002
| 
