House of Commons - Explanatory Note
Communications Bill - continued          House of Commons

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Clause 195: Removal of members of C4C

414.     This clause gives OFCOM the power, after consulting the Secretary of State, to remove members of the Channel 4 Corporation appointed by them.

Clause 196: Deficits and surpluses of C4C

415.     This clause repeals sections 26 and 27 of the Broadcasting Act 1990 (revenue deficits and excesses of Channel 4 Corporation to be met or distributed to providers of Channel 3 services) in respect of any year ending after the commencement of this clause.

Clause 197: Borrowing limit for C4C

416.     The Secretary of State may by order limit the amount of money that the Channel 4 Corporation is permitted to borrow. Before making an order under this clause, the Secretary of State must consult the Channel 4 Corporation and obtain the consent of the Treasury. The Channel 4 Corporation must not borrow money in excess of any limit set by the Secretary of State. The effect of this will be only to circumscribe new borrowing - the setting of a limit at a figure below that of the Channel 4 Corporation's actual outstanding borrowing would not require the Corporation to take positive steps to reduce its outstanding borrowing to a level which did not exceed the limit.

Clause 198: Function of OFCOM in relation to the Welsh Authority

417.     OFCOM are to regulate the services provided by the Welsh Authority to the extent provided by Part 5 of the Broadcasting Act of 1996 and the present Bill.

Clause 199: Welsh Authority's function of providing S4C and S4C Digital

418.     The Welsh Authority, as currently constituted, shall continue to exist. However, their functions as described under section 57 of the Broadcasting Act 1990, will be replaced with the function in subsection (2), namely of providing high quality television programmes for reception in Wales. The Welsh Authority must continue to provide S4C and may continue to provide S4C Digital. However, the Secretary of State may by order require the Welsh Authority to provide S4C in digital rather than analogue form, to merge S4C and S4C Digital and/or to provide the whole or part of the merged service in analogue digital simulcast for a period specified in the order.

419.     Subsection (5) imposes a duty on the Welsh Authority to ensure that S4C and S4C Digital are public services used for the dissemination of information, education and entertainment. The Welsh Authority may provide programming subtitles and other ancillary services for their S4C programmes. They may also provide programming assistance for disabled people and other ancillary services for their S4C Digital services.

Clause 200: Powers to provide other services

420.     This clause confers on the Welsh Authority the power to provide certain services in addition to S4C and S4C Digital. Subsection (1) prohibits the Welsh Authority from providing any television programme service (other than S4C and S4C Digital) unless its provision is approved by an order made by the Secretary of State and it is a public service of high quality used for the dissemination of information, education or entertainment wholly or mainly to the Welsh public. Any television broadcasting services provided under this clause must broaden the existing range of public television broadcasting services in Wales.

*The meaning of a television programme service is given in clause 348(1).

421.     Subsection (2) allows the Welsh Authority to provide services other than television programme services or sound services, provided they are public services of high quality used for the dissemination of information, education or entertainment which will be made available wholly or mainly to the Welsh public, or for use in Wales, and have been approved by the Secretary of State. Examples of the types of service that the Welsh Authority may provide under this subsection include (but are not limited to) an interactive service delivered via the Internet. Paragraph 20(1) of Schedule 18 stipulates that the Welsh Authority are not required to obtain the Secretary of State's approval for the continued provision of any service that they are providing before clause 200 comes into effect.

422.     In the course of providing a service approved by the Secretary of State under clause 200, the Welsh Authority may under subsection (7) also provide: assistance for the disabled in relation to programmes included in the service, services ancillary to programmes included in the service and related to their content, and other types of ancillary services offered in a digital format.

423.     Any programme service approved by the Secretary of State under this clause must contain a substantial proportion of programmes in the Welsh language.

Clause 201: Other activities of Welsh Authority

424.     This clause enables the Welsh Authority to carry out activities carried out in association with or connected (other than merely in financial terms) with the provision of S4C, S4C Digital and any other service approved by the Secretary of State under clause 200. Prior to carrying out such activities, the Welsh Authority must obtain the approval of the Secretary of State under subsection (2). The types of activities that may be approved by her under subsection (2) include those needed to secure, and those in connection with, the provision of licensable services, such as the formation of a company to provide a programme service, but do not include the provision of a licensable service. Subsection (6) amends the provisions in the Broadcasting Act 1990 which govern the power of the Welsh Authority to do things incidental or conducive to the carrying out of their functions. Paragraph 20(2) and 20(3) of Schedule 18 provides that the Secretary of State's approval is not required for the continuation of activities undertaken by the Welsh Authority or an S4C company before this clause comes into effect.

*A licensable service is defined in subsection (7) as an independent television or independent radio service that would be regulated under clause 206 or 239 if provided by an S4C company.

Clause 202: Welsh Authority finances

425.     It is unlawful under subsection (2) for the Welsh Authority to charge people in Wales for the reception or use of any of their public services, any assistance provided to disabled persons for programmes included in their public services or any of the ancillary services that they provide in a digital format.

*Under subsection (9), a public service includes S4C, S4C Digital or other services approved by the Secretary of State under clause 200.

426.     Subsection (3) states that the power of the Welsh Authority to do anything that is conducive or incidental to the carrying out of their functions includes the power to borrow money. However, they may not do so without the approval of the Secretary of State and the consent of the Treasury. The Welsh Authority must also pay such fees towards the carrying out of OFCOM's functions as may be agreed between the Authority and OFCOM (or, in the absence of agreement, as are set by the Secretary of State).

427.     Subsection (7) amends section 61 of the Broadcasting Act 1990 so that the Secretary of State may increase the annual grant paid to the Welsh Authority if she is satisfied that additional funding is appropriate in light of the costs they incur in providing their public services and broadcasting and distributing such services.

428.     Subsection (8) amends section 61A of the Broadcasting Act 1990 so that the Welsh Authority must use the money in their public service fund only for the provision of television programme services that are "public services" as defined by subsection (9). Subsection (8) also amends section 61A of the Broadcasting Act 1990 so that the first broadcast of any programme funded from the public service fund must be on one of the Authority's public television services.

Clause 203: The Gaelic Media Service

429.     This clause renames the Gaelic Broadcasting Committee (Comataidh Craolaidh Gaidhlig), originally the Gaelic Television Committee (Comataidh Telebhisein Gaidhlig) established under section 183 of the Broadcasting Act 1990, as the Gaelic Media Service (Seirbheis nam Meadhanan Gaidhlig). It also inserts new subsections (3B), (4), (4A) and (4B) to section 183. These set out the functions and powers of the Gaelic Media Service who must secure that a wide and diverse range of high quality programmes in Gaelic are broadcast or otherwise transmitted so as to be available for reception in Scotland.

430.     The Gaelic Media Service may apply the Gaelic Broadcasting Fund for the purpose of, or any purpose connected with, the carrying out of their functions. In carrying out their functions, the Gaelic Media Service may finance, or engage in, the making of television and sound programmes in Gaelic to be broadcast or transmitted so as to be available for reception in Scotland, provide or arrange training in relation to programme-making and carry out research to discover the types of television and sound programmes that the Gaelic-speaking community would like to be broadcast. The Gaelic Media Service may not provide any of the services specified in subsection (4B).

431.     Paragraph 21 of Schedule 18 provides for transitional provisions in respect of the membership of the Comataidh Craolaidh Gaidhlig. Paragraph 22 of that Schedule provides for the continuation of the Multiplex Licence (Broadcasting of Programmes in Gaelic) Order 1996 (S.I. 1996/2758).

Clause 204: Membership of the Service

432.     This clause inserts a new section 183A into the Broadcasting Act 1990 that deals with the composition of the Gaelic Media Service. The Service must consist of no more than 12 members, each of whom must be appointed by OFCOM, having regard to the matters listed in subsection (6) of section 183A, and must be approved by the Secretary of State for Scotland. OFCOM must appoint one member as chairman. One member must be nominated, respectively, by the BBC, Highlands and Islands Enterprise and the Bard Gaidhlig na h-Alba (Gaelic Development Agency).

433.     OFCOM must also secure that the members of the Services are able to adequately represent the interests of (i) regional Channel 3 services for areas wholly in Scotland or such other areas as determined by OFCOM under section 184(4)(b) of the Broadcasting Act 1990; (ii) the independent radio and television production industries in Scotland; and (iii) other persons and bodies concerned with the promotion and use of Gaelic language.

434.     Schedule 19 to the Broadcasting Act 1990 (Gaelic Broadcasting Committee: supplementary provisions) (as amended by clause 205) also applies to the Gaelic Media Service.

Clause 205: Supplementary provisions about the Service

435.     This clause amends Schedule 19 (supplementary provisions) to the Broadcasting Act 1990.

Chapter 2: Regulatory Structure for Independent Television Services

436.     Paragraph 23 of Schedule 18 provides that, subject to any express provision of this Bill, any pre-transfer Broadcasting Act licence shall continue to have effect on the same terms and conditions, and for the same period, as it would have done had this Bill not been passed.

Clause 206: Regulation of independent television services

437.     This clause specifies the television services that OFCOM shall regulate. The first group of services comprises television broadcasting services (other than those broadcast only from a satellite), restricted television services and additional television services broadcast or provided from places in the United Kingdom, and television licensable content services and digital television programme services provided by persons under United Kingdom jurisdiction. OFCOM is not under this section to regulate these services where they are provided by the BBC or the Welsh Authority. The second group of services comprises multiplex television services provided from places in the United Kingdom and digital additional television services provided by persons under United Kingdom jurisdiction. OFCOM is not under this section to regulate these services where they are provided by the BBC.

* television broadcasting service is defined in clause 348 as a service (other than any text service) which consists in a service of television programmes provided with a view to its being broadcast (whether in digital or in analogue form), and which is provided so as to be available for reception by members of the general public. It does not include a restricted television service, a television multiplex service, a service provided under the authority of a licence to provide a television licensable content service, or a service provided under the authority of a licence to provide a digital television programme service.

*restricted television service has the same meaning as in section 42A of the Broadcasting Act 1990 (as amended in Schedule 15of this Bill), namely a service which consists in the broadcasting of television programmes for a particular establishment or other defined location, or a particular event, in the United Kingdom (although the label in the 1990 Act is simply a "restricted service": the word "television" has been added here and in relation to digital television programme services and digital additional television services to distinguish them from radio-related service which, in the 1990 or 1996 Act are given the same name).

*the meaning of television licensable content services is given in clause 226 described in more detail in the notes to that clause below.

*a digital additional television service is defined under section 24 of the Broadcasting Act 1996, which is amended by Schedule 15, as being any service provided with a view to its being broadcast in digital form by means of a television or general multiplex service, but not including a Channel 3 service, Channel 4, Channel 5, a public television service of the Welsh Authority, the public teletext service, a digital programme service, a digital sound programme service, an ancillary service, or a technical service.

*a digital television programme service means any digital programme service within the meaning of section 1(4) of the Broadcasting Act 1996, namely a service consisting in the provision of television programmes (together with any ancillary services as defined by section 24(2) of that Act) with a view to its being broadcast in digital form so as to be available for reception by members of the public (see the amendment in paragraph 75(3) of Schedule 15), but does not include a teletext service, any service in the case of which the visual images to be broadcast do not consist wholly or mainly of images capable of being seen as moving pictures (except to the extent that either of these services are ancillary to the television programme) or a qualifying service.

* persons under United Kingdom jurisdiction are defined, by reference to the Television without Frontiers Directive primarily as persons established in the United Kingdom. A provider is deemed to be established in the United Kingdom where its head office is located here and this is where editorial decisions are taken, or if a significant part of the workforce engaged in the television broadcasting activity operates in the United Kingdom, or if this is where the provider first began broadcasting, assuming that the provider still maintains a stable and effective link with the economy of the United Kingdom. If these tests are not met, persons established under UK jurisdiction may also, in descending order, be persons using a frequency granted by the United Kingdom, persons who use a satellite capacity appertaining to the United Kingdom, and persons who use a satellite up-link situated in the United Kingdom.

*additional television service is defined under section 48 of the Broadcasting Act 1990 as any service which consists in the sending of telecommunications signals for transmission by wireless telegraphy by means of the use of spare capacity within the signals carrying any television broadcasting service.

*qualifying service has the same meaning as is given in section 2 of the Broadcasting Act 1996.

*an ancillary service refers to subtitling for the deaf, or other services that are ancillary to a programme and directly related to its content, or which relate to the promotion or listing of such programmes. Such a service is provided by the holder of a digital programme licence or by an independent analogue broadcaster.

*a technical service is a service provided for the encryption or decryption of digital programme services, digital sound programme services, or digital additional services.

Clause 207: Abolition of function of assigning television frequencies

438.     The Secretary of State shall no longer have the power to assign television frequencies for independent television services which are licensable under Part I of the Broadcasting Act 1990, for S4C, or for television multiplex services which are licensable under Part I of the Broadcasting Act 1996. The function of managing radio spectrum (from which the function of assigning frequencies derives) is transferred by the Bill to OFCOM.

Clause 208: Abolition of licensing for local cable systems

439.     From the television transfer date the provision of a local delivery service shall no longer require a licence under Part 2 of the Broadcasting Act 1990.

*a local delivery service is defined in section 72 of the 1990 Act to mean (broadly) a service of a kind specified by the Secretary of State consisting in the use of a telecommunication system (whether run by the person providing the local delivery service or not) for the delivery of various television and radio services listed in section 72(2). Licences are awarded on a system of cash bids.

*television transfer date means the date on which the ITC's functions under the Broadcasting Acts of 1990 and 1996 are transferred to OFCOM.

Clause 209: Digital Channel 3 and Channel 5 licences

440.     Any Channel 3 or a Channel 5 licence granted after the television transfer date must provide for the licensed service being broadcast digitally. Such a licence may also contain such conditions requiring the service also to be provided in analogue form as OFCOM consider appropriate. In such cases the programming (apart from advertisements) should replicate that of the digital service.

441.      The conditions included in the licence must enable compliance with any directions given from time to time by the Secretary of State about the continuation of analogue services.

442.     Any licence taking effect before 31st December 2014 must remain in force until the end of that day. Any licence taking effect thereafter must remain in force for a period of 10 years to the end of the next licensing period. This licence shall be renewable subject to the Secretary of State's decision to use the power provided for in clause 224. There can be no charge levied for the use of a licensed service or for any related assistance for the disabled or for ancillary services.

* Subsection (12) of clause 211 provides that a licensing period is the period beginning with the commencement of this clause and ending with 31 December 2014; or any subsequent period of 10 years beginning with the end of the previous licensing period.

Clause 210: Replacement of existing Channel 3 and Channel 5 licences

443.     As soon as practicable after the television transfer date OFCOM must offer persons who hold a Channel 3 or the Channel 5 licence the opportunity to exchange that licence for a replacement licence, being a licence of the kind described in the notes to clause 209 above. The replacement licence must provide for substantially the same service as the existing licence, although does not have to be identical in all respects.

444.     Any offer made by OFCOM to replace an existing licence under clause 210 must specify the conditions on which they propose to grant the replacement licence, the time frame of their offer, the date on which the licence will be granted if the offer is accepted, the time from which the licence will take effect if the offer is accepted (which must fall within the period of twelve months after the television transfer date), and the time from which the licence will cease to have effect if the offer is rejected.

445.     The financial terms of the offer must propose that the licensee will pay the same annual amount and percentage of qualifying revenue as would have been payable under the existing licence had it continued in force until the end of the period for which the replacement is granted.

A licence holder refusing this offer will have his existing licence revoked on a date specified by OFCOM in the offer. This date must fall no later than eighteen months after the closing date for agreeing the offer.

Clause 211: Renewal of Channel 3 and 5 licences

446.     This clause permits the holders of a licence to provide a Channel 3 service or a licence to provide Channel 5 to apply to OFCOM for the renewal of his licence for the next licensing period.

447.      An application for renewal may only be made in the period beginning four years before the end of the current licensing period and ending three months before the day that OFCOM determine they would have to publish a tender notice if they were proposing to grant a fresh licence to take effect from the end of the current licensing period. Any determination of that date must be made at least one year before the date on which the tender notice would have to be published and must be notified, at the time that the determination is made, to every person who is then a holder of a licence to provide a Channel 3 service or the Channel 5 licence.

448.     Unless the Secretary of State makes an order suspending the rights of renewal under clause 224, where OFCOM receive an application for the renewal of a licence, they must determine whether or not they will renew the licence and the financial terms on which the licence will be renewed (if they will renew the licence). They must also notify the applicant accordingly. Subsections (6) and (7) provide that OFCOM may determine that they will not renew a licence if:

  • they are not satisfied that the applicant (if his licence were renewed) would provide a service complying with the requirements imposed under Chapter 4 of Part 3 of the Bill relating to the public service remit for the licensed service, programming quotas, news and current affairs programmes or regional programming; or

  • they propose to grant a fresh licence for a service replacing the licensed service which would differ from the licensed service in the areas where it would be provided or the times of the day, or days of the week, between or on which it would be provided.

449.     OFCOM must not grant a renewal under this clause more than 18 months before the end of the current licensing period.

450.     Where OFCOM determine that a licence should be renewed, they must renew it on the same terms and subject to the same conditions with such modifications required to give effect to the requirements imposed under clause 212(4).

Clause 212: Financial terms of licence renewed under s.211

451.     Any offer made by OFCOM to renew an existing licence under clause 211 must specify the fee that the licensee is required to pay during the first year of the replacement licence and the percentage of qualifying revenue to be paid for each accounting period of the applicant falling within the relevant licence period.

452.     The fee for the first year of the renewed licence must approximate to what OFCOM estimate would have been the cash bid of the licensee had the licence been offered by a tendered notice under section 15 of the Broadcasting Act 1990. When determining the percentage of qualifying revenue, OFCOM may set different percentages (including nil percentages) for different accounting periods.

453.     OFCOM must include conditions in any replacement licence requiring payment of: the fee for the first calendar year of the licence, that fee increased by an appropriate percentage for each subsequent year and a specified percentage of the qualifying revenue attributable to a licence holder in each accounting period of the licence term. Payments required under these conditions are in addition to those required by OFCOM under section 4(1)(b) of the Broadcasting Act 1990.

Clause 213: Duty to secure the provision of a public teletext service

454.     This clause imposes a duty on OFCOM to secure the provision of a single, nationwide, public teletext service in a digital format broadcast by way of a television multiplex service and, until Channel 3 services, Channel 4 and S4C cease to transmit in analogue format, the provision of an analogue teletext service.

    *Subsection (3) specifies that the analogue teletext service is a single additional television service that uses the spare radio spectrum allocated to Channel 3 services, Channel 4 and S4C for the provision of additional television services.

455.     OFCOM must ensure that the analogue and digital teletext services are provided by the same person, although the content of the two services may differ and the licence holder may appoint third parties to provide the teletext services in accordance with clause 215.

456.     OFCOM shall have regard to their duties under this clause when making radio spectrum available to Channel 3 services, Channel 4 and S4C and making determinations of spare capacity under section 48(2)(b) of the Broadcasting Act 1990.

 
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Prepared: 20 November 2002