Select Committee on Culture, Media and Sport Appendices to the Minutes of Evidence

Annex 3


  The Satellite & Cable Broadcasters' Group (the SCBG) wishes to take this opportunity to express some of their concerns regarding the process and execution of the recently published Towers Perrin Report to the Regulators' Steering Group on the OFCOM Scoping Project.

  Firstly, we would like to clarify that we do appreciate this is very much work in progress and much of the future form and role of OFCOM will be decided in the legislative passage. We do not, therefore, assume to make detailed comment on the content of the report. However, we do hope that the way in which the Towers Perrin Report was conducted does not set a precedent for future examination of the regulatory framework, in which we are all stakeholders in our own right as ITC licensees.

  From the outset, the Towers Perrin work was surrounded by lack of openness which seems very much at odds with the Better Regulation Taskforce principles of transparency and accountability. The purpose of the project was not made clear, with the consultants themselves describing it to one of our members as being purely about how the logistics of how to integrate the five buildings, accounting systems and so on. However, it becomes clear that Towers Perrin were consulting a number of external parties of their own choosing, which seemed to indicate a rather different purpose.

  On learning that there was an element of consultation, our members again approached Towers Perrin. Our concern was that all the varied types of business and structural models within the industry had a voice, and the eventual make up of OFCOM would be capable of accommodating them all equally. Yet this request was refused in more than one case. Towers Perrin also declined to reveal whom they were consulting, so we were not even given the reassurance that our sector was represented in their thinking.

  We also have considerable concerns regarding the lack of any kind of cost or resource analysis in the final report. The report projects that "in the short term more work is likely to start than stop" and that there would be an elimination of only a "small amount" of duplication. But the report fails to address overall resource implications on the basis that the functions of OFCOM are not yet defined (despite being somehow able to estimate that the Radio Group could be staffed by a "backbone of 20-25 employees"). These statements would imply that costs will rise. Who will be paying for this increase? And how does increased cost and resource sit alongside the stated aim of the Communications White Paper to reduce regulatory structure and burden?

  Delivering the minimum necessary regulation in a stream-lined and coherent manner is one of the key positions of the White Paper but we fail to see how this is to be achieved if, as it appears from the report, the same amount of regulation, or even more, is to be delivered by the same separate regulators—even if they are under one OFCOM roof. This desire to preserve all the existing regulators, in all but name, is completely at odds with the stated aims of the White Paper and calls into question the validity of the entire exercise.

  We hope that these concerns will be taken into consideration by those who will be involved in the continuing work towards establishing OFCOM, and that as we move forwards we are able to share thinking and debate, and remain informed as to progress. The regulatory environment shapes our business health and wellbeing more than any one other factor. As stakeholders in the regulatory future, we have a vital role to play in its establishment.

November 2001

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