Select Committee on Culture, Media and Sport Memoranda

Annex B



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.


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.


In all cases the BBC's delivery of its remit and compliance with regulatory obligations will remain the responsibility of the Governors. However, the BBCwill 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


Tier 1 - all broadcasting


Codes establishing negative minimum content standards set by OFCOM

same standards will be applied to all broadcasters


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 be applied to all broadcasters


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


Tier 1 continued


EC quotas (independent production)

all broadcasters comply with EU 10% quota



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


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



Tier 2 - public service broadcasting


quotas for independent productions

25% quota set in legislation



OFCOM will take on OFT's responsibility for monitoring compliance

quotas for original programming

different quotas appropriate to each broadcaster


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


All broadcasters including BBC prepare annual statements of programme policy and report annually on their performance against them

OFCOM monitoring


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 licences 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.

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Prepared 13 March 2002