Clause 261: Changes of service policy

545.     This clause mirrors clause 259. The statement described in the notes on clause 260 above must not contain proposals for what is to be regarded (taking account of OFCOM's guidance) as a material change in the character of the service unless OFCOM have been consulted and the service provider has taken account of OFCOM's views. If this process has not been followed, OFCOM may insist that the provider publish a revised statement that has been approved by OFCOM.

Clause 262: Enforcement of public service remits

546.     This clause provides for the case where OFCOM conclude that a provider of a licensed public service channel or the public teletext provider has failed to fulfil its public service remit, or has not contributed adequately to the general requirements for public service broadcasting. If OFCOM are of the opinion that this failure is serious, and cannot be justified by reference to economic or market conditions, OFCOM may exercise their powers under this section. Before doing so, OFCOM must also consider the factors set out in subsection (3) regarding the provider's remit and more general performance.

547.     OFCOM may have recourse to a number of powers. Subsection (4) provides that OFCOM may direct that the provider amend his policy statement as directed, and may direct that the provider remedy its failure to fulfil satisfactorily its public service obligations. Such directions are to be accompanied by a reasonable timetable for compliance and guidance as to how OFCOM will decide whether the failure has been remedied and whether they will exercise their powers under subsection (6).

548.     If OFCOM are satisfied that their directions have not been complied with, that the provider is still failing its public service remit, and that this reasonably merits variation of the provider's licence, they may replace the self-regulatory regime described in the notes above with more detailed regulation. In other words, the conditions set under clauses 257 to 261 would be replaced by specific conditions set by OFCOM in order to ensure that the provider fulfils his public service remit.

549.     One of the general objectives of the Bill is that OFCOM be required to review continually the need for regulation in the sector, ensuring that unnecessary regulatory burdens are neither imposed nor maintained. In accordance with this de-regulatory approach, subsection (8) gives OFCOM the power, having previously exercised their powers in accordance with subsection (6) above, to vary again a provider's licence in order to reinstate the conditions imposed under clauses 257 to 261, and to remove or amend any specific conditions that were inserted in their place.

550.     Before giving any direction, or exercising any of their powers, under this section, OFCOM shall consult the provider affected.

Clause 263: Power to amend public service remits

551.     This clause provides the Secretary of State with the power to make an order amending, on the recommendation of OFCOM contained in their report required under clause 256, the public service remits under clause 257 for any licensed public service channel or the public teletext service, the list of public service television broadcasting purposes set out at clause 256(3), and the list of more detailed matters set out at subsections (5) and (6) of clause 256. Before recommending the making of an order under this provision OFCOM will be under an obligation to consult members of the public, such public service broadcasters (including the public teletext service provider if appropriate) as are likely to be affected by the proposed change and other providers of television and radio services as appropriate. Before making an order the Secretary of State must consult OFCOM, the public service broadcasters likely to be affected and other relevant providers. Any order made by the Secretary of State will be subject to the affirmative resolution procedure.

Clause 264: Must-offer obligations in relation to networks

552.     This clause requires OFCOM to include in the licences for every licensed public service channel, the public teletext service and every licensed television service added to the list of must-carry services under clause 60 conditions which they consider appropriate for securing the three following objectives:

• that digital channels or services on the list of must-carry services under clause 60 are offered for broadcasting and distribution over every appropriate network;

• that each channel or service provider of those channels or services enters into arrangements which ensure that their digital channels or services and any ancillary services are broadcast or distributed on appropriate networks so that those channels and services are made available for reception by as many members of the intended audience (as defined in subsection (7)) for a given service as possible; and

• that such arrangements prohibit the charge being imposed for of the reception of the channel or service provider from charging for reception of the channels or services.

* An "appropriate network" is defined in subsection (7) as a network used to provide public electronic communications services to a significant number of end-users as their principal means of receiving television programmes.

Clause 265: Must-offer obligations in relation to satellite services

553.     This clause requires OFCOM to include in the licences for every licensed public service channel, the public teletext service and every other licensed television service specified by the Secretary of State conditions which they consider appropriate for securing the following three objectives:

• that digital channels or services to which this clause applies are offered for inclusion in every satellite television service available for reception in the whole or a part of the United Kingdom;

• that each channel or service provider of those channels or services enters into arrangements which ensure that their digital channels or services and any related ancillary services are included in satellite television services available for reception by as many members of the intended audience (as defined in subsection (7)) for a given service as possible; and

• that such arrangements prohibit the charge being imposed for the reception of the channel or service provider from charging for reception of their channels or services.

* A "satellite television service" is defined in subsection (7) as a service which consists of broadcasting television programme services from a satellite and is used by a significant number of those who receive it as their principal means of receiving television programmes.

554.     These two objectives apply to a service or channel only whilst its digital form is included in the list of "must provide" services for the purpose of clause 266 (see below).

Clause 266: Securing reception of must-provide services in certain areas

555.     This clause requires OFCOM to include in the licences for every licensed public service channel, the public teletext service and every licensed television service added to the list of must provide services under clause 267 conditions which secure the reception of those services. Such conditions may provide that where persons required to provide must-provide services fail to enter into or maintain arrangements that meet the requirements of subsection (3), OFCOM may impose such arrangements. Before doing so, OFCOM must consult all persons who provide must-provide services. The arrangements that may be entered into by, or imposed upon, providers of must-provide services must secure that, where necessary, any member of the intended audience (as defined in subsection (10)) for a given service, who has bought the relevant equipment (for instance a dish and a digital satellite decoder), has available to them a facility for receiving the must-provide services (including any that are broadcast by satellite) and that this is made available free of charge. The effect of the arrangements currently, for example would be to require the relevant broadcasters to supply "smart" cards for the operation of receiving equipment that will permit reception of the free-to-view services ("solus cards"). They must also establish complaints procedures and ensure that these procedures are publicised in accordance with OFCOM guidance. Any such arrangements will only take effect if approved by OFCOM.

556.     Subsections (6) and (7) clarify when reception of a service is to be regarded as being free of charge. Subsection (8) provides that OFCOM shall determine the quality of reception required before someone can be treated for the purpose of this clause as receiving a service in an intelligible form.

Clause 267: Must-provide services for the purposes of s.266

557.     This clause provides that the list of must-provide services for the purposes of clause 266 includes the following: every digital television programme provided by the BBC and in relation to which OFCOM have functions; the Channel 3 services, Channel 4 and Channel 5 services, so far as any of them are provided in digital form; S4C Digital and the digital public teletext service. The Secretary of State may by order amend the list of must-provide services.

Clause 268: Co-operation with the public teletext provider

558.     OFCOM are to include, in each licence granted under the Broadcasting Acts 1990 and 1996 to provide a Channel 3 service or Channel 4, conditions that secure that the public teletext provider and any person authorised by him under clause 215 have access to such of the facilities of the relevant provider as are needed in order to provide the public teletext service. A provider of a Channel 3 service and Channel 4 or S4C may require the public teletext provider and authorised persons to pay a reasonable charge for such access.

Clause 269: Programming quotas for independent productions

559.     OFCOM are to include conditions in the licences of all licensed public service channels in order to secure that at least 25 per cent (or such other figure as is substituted by the Secretary of State by order) of the time allocated to the broadcasting of qualifying programmes on that channel is allocated to the broadcasting of a range and diversity (judged both in terms of the types of programmes involved and of the cost of their acquisition) of independent productions.

*qualifying programmes are defined in subsection (2)(a) as programmes of such a description as the Secretary of State may by order specify as qualifying programmes. Paragraph 27 of Schedule 18 provides that any order under the Broadcasting Act 1990 as to the definition of qualifying programmes shall continue to be effective after the commencement of clauses 269 or 298 of the Bill and paragraphs 1 and 7 of Schedule 12 to the Bill.

*independent productions are defined in subsection (2)(b) as programmes of such a description as the Secretary of State may by order specify as independent productions. Paragraph 27 of Schedule 18 provides that any order under the Broadcasting Act 1990 as to the definition of independent productions shall continue to be effective after the commencement of the Bill as specified above.

*licensed public service channels are defined in clause 348 as meaning any of the following services (whether provided for broadcasting in digital or in analogue form): any Channel 3 service; Channel 4 and Channel 5.

Clause 270: Programming quotas for original productions

560.     OFCOM are to include conditions in the licences of all licensed public service channels in order to secure that an appropriate amount of airtime is allocated to original productions and that the time allocated is divided as may be appropriate between peak viewing times and other times. OFCOM may also include conditions excluding specified descriptions of programmes from the calculation of the necessary proportion of original productions. Before including such a condition, OFCOM must consult the licence holder on whom it is to be imposed. The Secretary of State must also consult OFCOM, the BBC and the Welsh Authority before making any order under this clause.

*References to original productions in clause 270 are to programmes of such description as the Secretary of State may by order specify as original productions.

*Peak viewing time is defined in subsection (9)(a) as such time as appears to OFCOM to be - actually or potentially - a peak viewing time for any given public service channel.

Clause 271: News and current affairs programmes

561.     OFCOM are to include conditions in the licences of all public service channels in order to secure that the programmes included on those channels include news and current affairs programmes and that the time allocated to the broadcasting of news and current affairs programmes is an appropriate proportion of the total time allocated to the broadcasting of all other programmes. Such programmes are to be of a high standard, and are to cover both national and international matters. News programmes should be broadcast at intervals throughout the day, and the times at which both news and current affairs programmes are to be broadcast should include an appropriate amount of peak viewing times. OFCOM must consult with the channel provider before determining the proportion of broadcasting time to be allocated to news and current affairs programmes and what constitutes a peak viewing time.

*peak viewing time is defined in subsection (5) as such time as appears to OFCOM to be - actually or potentially - a peak viewing time for that channel. In deciding this, OFCOM are to consult the provider of the channel.

Clause 272: Appointed news providers for Channel 3

562.     OFCOM are to include in every regional Channel 3 licence conditions to secure nationwide broadcasting for news programmes that are able to compete with other television news programmes broadcast nationwide in the United Kingdom. Such conditions must require that all holders of regional Channel 3 licences maintain arrangements for the appointment of a single body corporate as the appointed news provider and that at all times when a licensee is providing a regional Channel 3 service there is a news provider appointed under those arrangements.

563.     News programmes must always be provided by the person who is the appointed news provider, and must be broadcast simultaneously with the broadcasting of news programmes included in other regional Channel 3 services.

564.     Subsection (3) sets out the arrangements for appointing the news provider. The appointment must be made from among bodies nominated by OFCOM (in accordance with section 32 of the 1990 Broadcasting Act). The appointment must cease if that nomination by OFCOM is terminated. OFCOM must approve the terms of appointment, to ensure that the finances of the appointed person are adequate to meet news obligations throughout the period of appointment.

Clause 273: Power to repeal Channel 3 news provider provisions

565.     This clause allows the Secretary of State, on OFCOM's recommendation or after consultation with OFCOM, and by an affirmative procedure order, to revoke the news provider arrangements for Channel 3, by repealing clause 272 and section 32 of the 1990 Act. Unless simply giving effect to recommendations made by OFCOM, the Secretary of State must consult OFCOM before making an order under this clause.

Clause 274: News providers for Channel 5

566.     The Secretary of State will have order-making powers to establish requirements for the provision of Channel 5 news programmes that correspond to the news provider provisions for Channel 3 services, with such modifications as the Secretary of State sees fit. An order may only be made on OFCOM's recommendation or after consulting OFCOM. Before the Channel 5 licence is varied, the licence-holder must be given opportunity to make representations to OFCOM.

567.     The Secretary of State is prohibited from imposing new obligations in relation to Channel 5 unless he is satisfied that Channel 5's share of the audience is broadly equivalent to that for the services comprising Channel 3.

Clause 275: News provision on the public teletext service

568.     OFCOM are to include in the licence of the public teletext provider conditions that secure that news items are included in public teletext services, and that they are up-to-date and regularly revised.

Clause 276: Programme production

569.      OFCOM are to include in every licence for a Channel 3 service conditions to secure that a certain proportion (as OFCOM consider appropriate) of Channel 3programmes that are made in the United Kingdom should be made outside the area enclosed by the M25. Such programmes should make up a suitable range of programmes. An associated requirement is that Channel 3 providers invest sufficiently in programme production in different parts of the United Kingdom outside the area enclosed by the M25. None of these requirements need be included as a licence condition for a national Channel 3 service, unless OFCOM considers this to be appropriate, and OFCOM must consult the licence holder on whom it is to be imposed.

*a national Channel 3 Service is defined in clause 348 as a Channel 3 service provided between particular times of the day for more than one area for which regional Channel 3 services are provided.

Clause 277: Regional programming

570.     OFCOM are to include in national, regional and local Channel 3 licences conditions to secure that the areas served by the licensee are provided with programmes appropriate to the area concerned. In relation to regional and national services, the objectives to be secured are set out in subsections (1) and (4), respectively, and include ensuring that a sufficient amount of time is given in the service to regional programmes, including news programmes, which are of high quality, that a suitable proportion of regional programmes included in the service consists of programmes made in the relevant regional area and that a sufficient proportion of such programmes are broadcast at or around peak time.

*regional programme is defined in subsection (7) as - in relation to a regional Channel 3 service - a programme included in that service as being of particular interest to persons within the area covered by the service or - in relation to a national Channel 3 service - as being of particular interest to persons within a particular area of the United Kingdom.

571.      In this clause, a Channel 3 service is a local service if it is required to provide programmes for specific areas or specific communities within that region. In the case of a local service, OFCOM shall include conditions requiring that a sufficient amount of time is given in the service to an appropriate range of local programmes, including news programmes, which are of high quality; that a sufficient proportion of such programmes are broadcast at or around peak time; and that an adequate proportion of such programmes have been produced in the relevant locality.

*local programme is defined in subsection (7) as a programme for part of an area, or for a particular community.

572.     Before including a licence condition in this respect OFCOM must consult the licence holder on whom it is to be imposed.

Clause 278: Regional programme-making for Channel 4

573.     OFCOM are to include in the Channel 4 licence conditions providing that a certain proportion (as OFCOM consider appropriate) of the programmes to be broadcast on Channel 4 that are made in the United Kingdom should be made outside the area enclosed by the M25. Such programmes should make up an adequate range of programmes. Before imposing a condition under this clause, OFCOM must consult with the Channel 4 Corporation.

Clause 279: Inclusion of regional matters in the public teletext service

574.     OFCOM must include, in the public teletext service licence, conditions which ensure that an appropriate proportion of material reflecting the interests of the different regions of the United Kingdom is included in the analogue and digital teletext services.

Clause 280: Proposals for arrangements

575.     Any application for a regional Channel 3 licence must include the applicant's proposals for participating in networking arrangements. OFCOM may publish guidance for applicants on the kinds of proposals which they are likely to consider satisfactory.

*For the purposes of Part 3, arrangements are networking arrangements if they: (1) apply to all holders of regional Channel 3 licences; (2) allow programmes made, commissioned or acquired by a Channel 3 licensee to be made available to all other regional Channel 3 licensees for broadcasting; and (3) enable regional Channel 3 services (taken as a whole) to compete effectively with other television programme services provided in the United Kingdom.

Clause 281: Obligation as to making and continuance of approved arrangements

576.     OFCOM are to include in every regional Channel 3 licence conditions to secure that, where no conditions imposed by OFCOM under clause 282 are in force, the licensee has entered into and given effect to networking arrangements (including any modification thereto) that are approved by OFCOM in accordance with Schedule 11, The Chapter 1 prohibition of the Competition Act 1998 does not apply to any networking arrangements that have been approved by OFCOM in accordance with any licence condition imposed by them under this clause or that have been considered and approved under Schedule 4 to the Broadcasting Act 1990.

577.     Under paragraph 29 of Schedule 18, networking arrangements that are in force immediately before the commencement of this clause have been approved under section 39 of the Broadcasting Act 1990 will be treated as if approved by OFCOM under this clause.

Clause 282: OFCOM's power to impose arrangements

578.     Any notice published by OFCOM stating that they propose to award one or more regional Channel 3 licences must specify a networking date by which networking arrangements must be entered into if they are to be effective before the new Channel 3 licensees start to provide their licensed services. If suitable networking arrangements do not exist by the networking date or subsequently cease to apply, OFCOM may impose appropriate network arrangements on all regional Channel 3 providers, including the new licensee. Subsection (7) allows OFCOM to set licence conditions appropriate for securing that regional Channel 3 providers comply with the networking arrangements.

Clause 283: Review of approved networking arrangements etc.

579.     This clause imposes a duty on OFCOM to carry out general reviews of the networking arrangements approved under clause 281 or imposed under clause 282. The first review must be carried out no more than six months after the last closure date for an offer of a regional Channel 3 licence, made under clause 210. Reviews must be undertaken yearly thereafter. OFCOM may also, at any other time, carry out a review of whether the networking arrangements continue to satisfy one of the two competition tests set out in paragraph 6 of Schedule 11 (approval, imposition and modification of networking arrangements).

*The first competition test is that the networking arrangements do not have the object or effect of preventing, restricting or distorting competition within the United Kingdom. The second competition test is that the networking arrangements do have such an object or effect but would satisfy the criteria set out in section 9 of the Competition Act 1998.

580.     Where, following a review, OFCOM are satisfied that modifications to the networking arrangements are required, they may require regional Channel 3 licensees to give effect to those modifications or, in the case of arrangements imposed under clause 282, make those modifications themselves. OFCOM may not require modifications to be made to approved networking arrangements already in force without conducting a review under this clause 283 unless they have the consent of the Channel 3 licensees affected by the modification.

581.     Subsection (7) allows OFCOM to set licence conditions that secure that Channel 3 licensees to give effect to any modifications of the networking arrangements proposed by OFCOM.

Clause 284: Supplemental provision about networking arrangements

582.      Schedule 11 sets out the procedures to be followed by OFCOM when approving, imposing or modifying networking arrangements under clauses 282 and 283 and conditions included in Channel 3 licences in accordance with clause 281.

583.     Where networking arrangements (and modifications thereto) are submitted to OFCOM for their approval in accordance with conditions included in regional Channel 3 licences under clause 281, OFCOM must publish a description of those arrangements and allow third parties a reasonable period of time to comment on them. OFCOM may then approve or conditionally approve, or reject the arrangements (or modifications to them). Before deciding to give a conditional approval OFCOM must consult each holder of a regional Channel 3 licence about the changes. OFCOM must then, subject to confidentiality, publish their decision and their reasons for it. Once a set of arrangements have been approved by OFCOM they are not to be modified without OFCOM's approval.

584.     Paragraph 5 requires OFCOM to publish, subject to confidentiality, reports explaining any networking arrangements that they impose under clause 282 and the outcome of any reviews carried out under clause 283.

585.     Under paragraphs 6 and 7, OFCOM must not approve, impose or modify any networking arrangements under clauses 281 to 283 unless:

• they are satisfied that the arrangements satisfy the first or second competition tests (as described in the note to clause 283 above); and

• they consider that the networking arrangements represent a satisfactory, means of achieving the purpose of enabling regional Channel 3 services (taken as a whole) to compete effectively with other television programme services provided in the United Kingdom. OFCOM must also take into consideration the likely effect of the arrangements on the ability of regional Channel 3 licensees to maintain the quality and range of their regional programmes and the regional character of their services.

586.     OFCOM may not approve, impose or modify any networking arrangements where it appears to them that they are likely to prejudice the ability of regional Channel 3 licensees to comply with their public service remits or conditions imposed under clauses 276, 277 or 340.

587.     Paragraph 9 confers a right of appeal against OFCOM decisions concerning the competition aspects of networking arrangements. The right of appeal extends to any holder of a regional Channel 3 licence. An appeal may be brought only by sending a notice of appeal to the Competition Appeal Tribunal and on the grounds listed in sub-paragraph 9(4). A Channel 3 licensee is not required to comply with OFCOM's decision, pending the outcome of the appeal.

588.     The CAT is to decide the appeal on the merits. The CAT is to decide whether OFCOM's decision was appropriate and may confirm OFCOM's decision or issue any directions it considers are necessary to give effect to its decision. OFCOM must comply with any such directions. A decision of the CAT may be appealed under paragraph 11 on a point of law to the Court of Appeal, or in Scotland, to the Court of Session. Such an appeal may, with the permission of the CAT or the appellate court, be brought by a party to the original CAT proceedings.

589.     Paragraph 12 allows OFCOM to require any person to provide them with information necessary to enable OFCOM to carry out their functions under clauses 282, 283 or Schedule 11. Sub paragraphs (4) and (5) limit the types of document and/or information that OFCOM may demand. Where a person does not comply with an information request from OFCOM, OFCOM may certify the non-compliance to the High Court, the Court of Session or, in Northern Ireland, the High Court or a judge of the High Court. If, after a hearing, the court is satisfied that a person has not complied with a request from OFCOM and there is no reasonable excuse for the non-compliance, then it may hold that person in contempt of court and punish him accordingly.

590.     A person is guilty of an offence under paragraph 13 if he:

• intentionally alters, suppresses or destroys a document requested by OFCOM; or

• knowingly or recklessly provides OFCOM with false or misleading information himself or knowingly or recklessly provides false or misleading information to a third person which he knows will be provided to OFCOM.

591.     The penalties to which any person found guilty of committing an offence will be liable are set out in sub-paragraph (10).