APPENDIX 10
Supplementary Memorandum submitted by
Voice of the Listener and Viewer
Voice of the Listener and Viewer (VLV) welcomes
the opportunity to submit evidence to the inquiry into broadcasting
currently being conducted by the Committee for Culture, Media
and Sport. We have chosen to confine our written evidence to three
key issues which are set out below.
THE BBC AND
OFCOM
In its White Paper (CM 0510) on "A New
Future for Communications", the Government stated its intention
to maintain the BBC, with limited exceptions, as an independent
institution outside the responsibility of the new Office of Communications.
The Select Committee itself, on the other hand, has with others
been urging the Government to reverse this decision with the stated
object of providing a level playing field between publicly funded
broadcasting services and services dependent on commercial sources.
Some of those urging this change of policy, however, are clearly
speaking on behalf of the latter.
VLV, however, continues to believe that the
Government's original instinct was correct and took account of
the profoundly different purposes of the two kinds of service.
Leaving aside the unique case of Channel 4, commercial services
exist to serve the interests of their shareholders and advertisers:
they must deliver audiences to their advertisers and sponsors,
and seek to maximise those audiences through the selection, scheduling
and content of their programmes. In the past successive regulatory
regimes have imposed restrictions to curb the full extent of that
influence, but increased competition and changes in the national
culture have gradually led to a whittling away of many of those
restrictions.
Public funding through the licence fee, by contrast,
is intended to give the broadcaster independence to select and
schedule material that he deems appropriate to serve the public
interest by providing a diversity of choices with majority and
minority appeal. It is an axiom of competition in broadcasting
that the only effective test of success lies in pitting similar
programmes against each other. VLV regrets that, in recent times,
the schedules of BBC1 and ITV1 have provided all too many examples
of this kind of competition, which has reduced the range of choice
available on the mainstream channels, certainly in peak viewing
hours.
VLV believes that, based on a false premise
of comparability between commercial and non commercial programme
services, a move to subordinate the BBC to OFCOM in anything other
than some issues of competition arising from the BBC's limited
commercial activities would be seriously wrong in both philosophy
and practice. We have indicated the objections to the philosophical
argument. The objection on practical grounds is that, for the
first years of its existence, OFCOM will be faced with the huge
task of assimilating the five existing regulatory bodies which
it is to incorporate. The amalgamation, in a single move, of so
many diverse corporate bodies must be almost unprecedented and
little expertise exists of such tricky waters, yet OFCOM will
be responsible for much that is of profound importance to the
protection of the public interest, and for many aspects impossible
to quantify or measure in economic terms. To burden it, at the
same time, with responsibility for introducing a new regulatory
regime for the BBC would, at the very least, add to the stresses
upon it, and at worst risk total disaster. Since legislative change
would also be required to amend the BBC Charter before any such
a move could be effected, VLV submits that a wiser course would
be to wait until the BBC's Charter and Licence is next due for
renewal. If, by that time, OFCOM has established itself as an
effective, respected component of the industry, then that might
be the time to reassess the powers and position of the BBC Board
of Governors.
To bring the Board of Governors under the control
of OFCOM could not avoid compromising the role of the Governors,
who are appointed by the Queen in Council. The appointment of
members of the regulatory bodies now disappearing, by contrast,
is made by Ministers, to whom they are responsible. The Governors,
on the other hand, are currently accountable through the Secretary
of State to Parliament for the use and management of the licence-fee
revenue. VLV submits that, for as long as the main source of the
BBC's revenues remains the licence fee, the responsibility for
supervising its expenditure should remain in the hands of the
BBC Board of Governors with its direct link to Parliament intact.
MEDIA OWNERSHIP
The proposals on Media Ownership in the White
Paper and the subsequent DCMS Consultative Document largely address
commercial issues without reference to the public service obligations
of the commercial sector. The proposals do not indicate how they
are going to generate a leading world-wide media business beyond
providing opportunities for consolidation. VLV would wish to see
a more forward-looking approach designed to ensure the production
of content that will create a dynamic market. Regulatory conditions
will need to be clear and stable to give commercial interests
the best opportunity to develop this market.
The proposal that a single ITV licence in London
should be permitted arises from the wishes of Carlton and Granada
to combine certain activities for financial reasons but pays no
regard to public service obligations currently imposed on the
licensees. In recent years increasingly "light touch"
ITC regulation has allowed the owners of these franchises to drift
markedly from their original obligations in regard to news, current
affairs, documentary, and drama. This drift continues and would
be self-regulated under the new White Paper tiering proposals.
At the same time, the requirement for regional programming has
successfully progressed within Wales and Scotland whist rapidly
diminishing in England.
VLV recommends that primary legislation permitting
a single licence should only be enacted if it is accompanied by
a clear obligation to produce certain minimum levels of news,
current affairs, documentary and drama. These obligations should
stimulate licensees to become providers of quality and profitable
material which will sell internationally using the creative skills
which exist within the UK and which distinguish British public
service broadcasting from other television services internationally.
A similar regional obligation should be imposed which would progressively
relate to existing and developing regional structures in the UK.
An option is proposed in the DCMS consultative
document to increase single holding limits of the nominated news
provider from 20 per cent to 40 per cent. VLV considers this poses
too high a risk to the integrity of such a provider. The potential
for a combination of two shares to permit two companies to hold
more than 50 per cent of any company flies in the face of the
plurality on which the Media Ownership consultation document prides
itself. Moreover, such a move could open the door to foreign ownership,
regulation of which would be contrary to EU law. The high reputation
of broadcast news coverage in this country depends on its independence.
VLV believes the ownership of the provider must reflect this independence.
It is also suggested in the DCMS consultation
document that the government, on advice from OFCOM, should be
able to revoke the nominated news provider system. VLV considers
this could put democratic processes at risk whilst also creating
uncertainties in the market.
VLV submits that the 20 per cent limit on ownership
of the nominated news provider should be maintained and that the
system must only be revoked under primary legislation.
The DCMS consultation on media ownership document
offers as an option that ownership rules should be delegated to
the competition authorities. VLV believes such a move would put
the decision into strictly quantified circumstances and ignore
the issues of citizenship and democracy which public service broadcasting
serves. It would also offer the option for ownership rules to
be changeable by secondary legislation, which VLV opposes.
VLV strongly resists the proposal that ownership
issues should be delegated to competition authorities only, or
modified by any means other than by primary legislation.
INTELLECTUAL PROPERTY
RIGHTS & FAIR
USE OF
BROADCAST OR
INTERNET MATERIAL
For many years, viewers in the UK have been
able to make off air recordings of broadcast programmes without
additional payment for time shifting purposes. The arrangements
have worked well and there have been few, if indeed any, threats
to the intellectual property rights (IPRs) of either broadcasters,
writers or composers. Unless carefully regulated however, new
technological developments could disturb this balance and have
a profound impact on the fair use by individual viewers and consumers
of broadcast, or internet, material. The fundamental issue for
UK viewers is whether they can continue to be able to watch broadcast
programmes at a time which is convenient for them.
New technological developments, notably conditional
access systems, theoretically enable holders, or licensees, of
IPRs to do two things that could potentially deprive UK television
viewers of their current right to make off air recordings of television
programmes for time shifting purposes, without additional payment.
These are:
to deprive viewers of the technical ability
to make any off air recordings for time shifting purposes:
and/or
to require viewers to sign individual contracts
that require viewers either to undertake not to make any off air
recordings of broadcasts for fair use purposes, or alternatively
to require them to make additional payments to make off air recordings.
VLV submits that any new statutory provisions
should preserve the current balance between the protection of
a broadcaster's IPRs and the fair use of those broadcasts by viewers.
THE LEGAL
SITUATION
Viewers are currently authorised by the 1988
Copyright Designs and Patents Act to make off air recordings for
time shifting purposes without additional payment. However, the
UK now has to amend its domestic law to take account of the EU
Directive 2001/29 of 22 May 2001: Copyright in the Information
Society. VLV has been advised that the Government intends to do
this by means of a Statutory Instrument (SI) deriving its authority
from s. 2(2) of the European Communities Act, which only permits
the minimum amendments to UK law necessary to implement the relevant
EU legislation. VLV therefore submits that this means that the
Statutory Instrument must afford no powers to rights holders to
change the traditional balance between the protection of IPRs
and individual fair use of broadcast material. The simplest way
to do this would be to ensure that holders of UK broadcasting
licences, or service providers' licences, are statutorily required
to preserve the traditional balance, and not to attempt to undermine
them, either by the deployment of technological measures or by
contractual requirements imposed upon viewers of subscription
or pay per view services.
The EU Directive allows each Member State a
substantial degree of freedom to choose the manner in which it
implements Article 6 of the Directive, and in particular Article
6(4) which relates to the manner in which rights holders may use
technological measures to restrict the making of copies of their
works for fair use purposes. The points at issue are the precise
conditions under which a rights holder may use technical measures
to prevent users from making copies of their work for fair use
purposes in this case the right of viewers to make copies for
time shifting purposes.
VLV submits that the EU Directive only requires
Member States to afford to rights holders the right to use technological
measures to constrain any rights to make copies for fair use or
time shifting purposes, when the provider makes the work available
at a time and a place selected by the user.
VLV therefore submits that the UK should only
allow UK rights holders to use technical measures to prevent private
recording for time shifting purposes when the rights holder is
able to make the work available at a time and at a place demanded
by the user. Furthermore, VLV submits that if the UK enacts the
provisions of the EU Directive by means of a Statutory Instrument,
if the Government is not to exceed its powers under the European
Communities Act, it can only allow rights holders to use technical
measures to restrict copying for time shifting purposes if the
work is available both at a time and at place specified by the
user. This is a double condition. It does not mean at a time or
a place specified by the user, nor does it mean at a series of
times and in a place specified by the rights holder.
VLV therefore submits that it is important for
Parliament to draw a clear distinction between the fair use of
broadcast material and the fair use of material that is made available
via the Internet. Programmes which are broadcast cannot currently
be made available at a time and a place specified by the viewer,
nor are they likely to be until broadcasters can develop and invest
in highly sophisticated interactive software that has not yet
been invented. On the other hand, information which is made available
via the Internet may possibly be available at a time that is convenient
to the viewer, although as yet, little of it is available at a
place convenient to the viewer. The principal exception is the
limited amount of information which is currently available on
third generation mobile telephones.
VLV recognises that in the long term, broadcasting
as we know it today may disappear, but in practice we submit that
this is a long way off. VLV therefore submits that:
Viewers and other users of broadcast IPRs should
continue to be able to make off air recordings for time shifting
and other fair use purposes, until such time as the rights holder
can make the material available at a time and a place convenient
to the user.
VLV submits that the Select Committee should
examine a further issue, namely the potential for broadcasters
and holders of IPRs to abuse these arrangements by requiring viewers
and users of subscription services and other broadcast services
protected by technological measures to sign away their rights
to make off air recordings for fair use purposes. For viewers
and other consumers, the difficulty is that in the UK, legal contracts
can override statute law. VLV submits that the simplest way for
Parliament to avoid this danger would be to impose a requirement
on all holders of UK broadcast, or service providers licences
not to do this. It is arguable, although not certain, that Parliament
would be entitled to include this provision in a Statutory Instrument
arising from the European Communities Act on the grounds that
it would preserve the traditional balance between broadcasters
and viewers.
11 January 2002
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