Office of Communications Bill [Lords]

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Michael Fabricant: Let us remind ourselves precisely why we are engaging in the formation of Ofcom. This is being driven by the emergence of new technologies such as different ways of analogue broadcasting, which still has a life and which we should not write off, and the introduction of digital broadcasting. We can take pride in the United Kingdom that 35 per cent. of homes have access to digital television, which is the highest percentage rate of penetration in any country in the world. It is certainly better than any continental country despite the best efforts of Directorates-General IV, with or without my hon. Friend the Member for Vale of York being a solicitor there.

4.30 pm

Miss McIntosh: I should regret it if I misled the Committee. I am not a solicitor. I am a member of the Faculty of Advocates. I am a Scottish advocate, which is different from being a solicitor.

Michael Fabricant: A non-practicing Scottish advocate. Is the word ''lawyer'' appropriate? I think that it is.

Miss McIntosh: Loosely.

Michael Fabricant: Loosely.

The Bill's introduction is due to the emergence of new technologies and the possibilities that they provide. There are several platforms on which digital broadcasting can be provided. There is digital terrestrial television, the ITV box, satellite television and cable television. There are other forms, which are not well used in this country, using microwave links. There are many ways in which to deliver digital television. We still have the more conventional forms such as newsprint, although it is interesting to note that most broadsheets in this country provide excellent and free website access to their newspapers. Again, we see a convergence between the traditional forms of delivery of media and digital television.

It is strange that, in clause 2—the heading of which is ''Initial function of OFCOM''—no recognition is made that the raison d'etre of the Bill comes through the development of new forms of delivery of the internet, broadcasting and the print media through the use of websites. There will be multi-access to those media without having to duplicate in one's home the means by which those media are received. It would be extraordinary if, through lack of control of competition, one found that in order to receive all digital channels, one must have a digital set-top box receiving digital terrestrial broadcasts, a satellite dish and cable. That would be the obvious extension of the argument if there were no controls.

The Government recognise that there must be controls, and these have been covered in depth in a good White Paper, ''A New Future for Communications'', which has a picture of the former Secretary of State for Trade and Industry and the

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former Secretary of State for Culture, Media and Sport, who has changed his views on the BBC, and on so many other things, since finding intellectual freedom by joining the Disney Corporation.

The Minister says that the Bill is born out of the White Paper, so it is incongruous that, although the White Paper contains considerable discussion about how cross-media ownership should be regulated, clause 2, entitled ''Initial function of OFCOM'', does not refer to that. Again, surely there should be a clear direction to existing regulators and broadcasters as to the Government's intentions.

The Minister and the hon. Member for Newcastle-under-Lyme correctly pointed out that the concept of two regulators was not unusual. Oftel and the Office of Fair Trading are jointly responsible for competition control in the media. However, the Culture, Media and Sport Committee argues that there should be one communications Ministry, because sharing responsibility between two Departments is not the best way to proceed. Given that argument, surely we can equally argue that having one competition agency, whether Ofcom or the OFT, is more logical than two organisations, even though there are two at present.

Miss McIntosh: Can my hon. Friend help me by saying whether the Competition Act 1998 changed that, or should we wait for the Minister to provide an explanation?

Michael Fabricant: My hon. Friend asks an interesting question, but I do not know the answer. I hope that the Minister will provide an explanation, because the 1998 Act is yet another factor in a complex equation. The question of competition is interesting because technology does not stand still. If we are not careful, we shall end up with an Ofcom Bill—I do not mean the one that we are debating now—that defines structures that will be wholly inappropriate, possibly by the time that it is enacted, and certainly within two, three or four years. The reason is simply the pace of change. We cannot blame the Government for that, because no Government can predict accurately what technological changes might occur, but we can certainly try to make provision for them. One way of doing that is to get people to start thinking about the issues sooner rather than later. To do that, we need to give a steer, which is why I commend my hon. Friend for tabling the amendments. At least we have an opportunity to discuss these matters now.

I hope that the Minister will talk about how the Government intend to address cross-media ownership, but of course that is not the only issue. It is not just a question of balancing the ownership of apples and pears, because the two are very different. How it is argued that one newspaper is equal to two small radio stations or one large television station, I do not know. It is not easy.

I commend the authors of the White Paper, because page 43 gives a brief and interesting analysis of how France, Germany, the Netherlands and my beloved Australia regard cross-media ownership and how they deal with the problem. Surprisingly, the United States, which has particularly interesting ownership rules, is omitted. The Select Committee hopes shortly to visit

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the Federal Communications Commission, which governs the ownership of commercial television and commercial radio as well as other media in the USA. That omission is worrying, because there is no clear guidance on the Government's thinking on cross-media ownership for those who hope to be future regulators.

There is another factor. I mentioned the three platforms earlier and it is worth referring to the memorandum submitted by Sky to the Culture, Media and Sport Committee inquiry into the future of communications, which is being undertaken concurrently with this Committee. Sky argues that despite the ''digital dividend'' from broadcasting on satellite, ITV withheld ITV1 from the Sky platform for three years in order to boost the take up of ONdigital, which is now ITV Digital; the pay TV operator that is jointly owned by Carlton and Granada. Those issues are addressed by amendment No. 62, which talks about the promotion of open and competitive markets. The market primarily involves not only the viewers and the listeners; it is also the platform to enable those programmes to be delivered.

Amendment No. 61 also refers to the need of the Secretary of State to make proposals conferring on Ofcom any functions relating to the promotion of open and competitive markets. That applies not only to the market, as in those who will listen to, view or operate the internet, but the market to transmit these programmes, which brings us to the issues of having free and open access to all three digital platforms by programme providers. There is a problem with digital terrestrial television in that the number of channels available is limited by the frequency spectrum. That is less the case with satellite and cable. It is beholden on owners of satellite and cable networks to provide that access at a market rate.

At the moment, the rules are in place and they are controlled primarily by the ITC and the OFT. But there is confusion in the industry about whether Ofcom will continue to maintain those rules. The Minister says—I welcome it—that Ofcom will be a light-touch regulator, yet he gives no clear guidance as to whether the rules currently maintained by the ITC will be maintained by Ofcom. Indeed, some Labour Members—including the hon. Member for Newcastle-under-Lyme, who made some intelligent remarks—questioned whether it should be the role of Ofcom to set those rules.

That is a valid point. First, it is dangerous when two organisations have overlapping responsibilities for competition policy. Secondly, if the OFT has a remit to ensure that cross-media ownership does not create monopolies or that monopolies do not deny programme producers access to any particular digital platform, why do we need Ofcom to have that function? That point was put so well by the hon. Member for Newcastle-under-Lyme.

Paul Farrelly: Perhaps the hon. Gentleman would do us another service by explaining the meaning of amendment No. 39, which conjures up images of Slickergate and dodgy dealings by financial journalists. Does he agree with the suggestion to bring some

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aspects of the Press Complaints Commission's activities under Ofcom?

Michael Fabricant: As far as the latter is concerned, the Broadcasting Standards Commission will fall within the orbit of Ofcom. I have often said that the Press Complaints Commission is, in some respects, redundant. My personal view is that the BSC should be included in Ofcom's remit, but that is not the main issue in amendment No. 39.

4.45 pm

Surprisingly, the hon. Gentleman does not understand what amendment No. 39 means. It is designed to ensure, as my hon. Friend the Member for Vale of York eloquently said, that pension and other schemes operated for the benefit of employees in the media are regulated by Ofcom.

Paul Farrelly: By virtue of providing a different analysis, the hon. Gentleman seems to agree with me that the proposal is ambiguous and open to further interpretation.

Michael Fabricant: If Bills or Acts were not open to interpretation, lawyers would have no job to do. If the hon. Gentleman were arguing that a clause that is open to interpretation is badly drafted, I would have to say that the draftsmen of all Bills were doing a bad job. All Bills and Acts of Parliament are open to interpretation, which is good. If it were otherwise and everything were rigid, as in the French Napoleonic code, my hon. Friend the Member for Vale of York, a non-practising lawyer, and others would be out of business and the law could not progress. We all know that it takes much longer for laws to be changed in Assemblies and Parliaments than it takes for judges to make judgments under changed circumstances.

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Prepared 31 January 2002