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

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Clause 312: Setting and publication of standards

637.     This clause concerns the procedures for setting the codes containing the standards for the content of television, radio and teletext services. Subsections (1) to (5) deal with the consultation process that OFCOM must enter into prior to setting or revising these standards. Different provision is made regarding the persons to be consulted depending on the relevance of the code to their interests.

638.     Following this process, OFCOM may modify its draft standards code, if at all, as they see fit, and must then publish the code. If new standards are being set, or old standards being revised, OFCOM must bring them to the attention of those whom the standards are likely to affect and, always, the Secretary of State, the BBC (unless it is a code containing only standards for advertising or sponsorship) and, if the code relates to television programme services, the Welsh Authority.

Clause 313: Observance of standards code

639.     OFCOM are to include in every Broadcasting Act licence for a programme service such conditions as they deem to be suitable in order to safeguard the standards listed in clause 307. OFCOM must also implement procedures for hearing complaints in connection with the non-observance of such standards. OFCOM may report to the Secretary of State periodically regarding issues relating to OFCOM's standards code that appear to raise questions of general broadcasting policy.

640.     Regarding advertising and sponsorship, OFCOM may include a further licence condition obliging the licence holder to comply with any direction from OFCOM on the matters set out in subsection (5), all of which relate to the exclusion of certain advertisements or sponsorship.

Clause 314: Duty to observe fairness code

641.     This clause requires OFCOM to include in each Broadcasting Act licence for a programme service such conditions as they consider appropriate for securing observance, in connection with the provision of that service and in relation to programmes included in that service, of the fairness code for the time being in force under section 107 of the Broadcasting Act 1996.

Clause 315: Standards with respect to fairness

642.     This clause relates to the exercise by OFCOM of functions relating to the consideration of complaints regarding fairness and privacy which were formerly exercised by the Broadcasting Standards Commission under Part V of the Broadcasting Act 1996.

643.     A standards complaint under Part V of that Act may not be made after the commencement of this section. This clause amends the provisions in sections 115,119 and 120 of the 1996 Act relating to the consideration of fairness complaints.

*a standards complaint is defined in section 110(2) of the Broadcasting Act 1996 as a complaint which relates to the portrayal of violence or sexual conduct or to standards of taste and decency.

Clause 316: Duty to publicise OFCOM's functions in relation to complaints

644.     OFCOM are to include in a licence for every service to which this clause applies conditions to ensure that their functions in relation to the setting and maintenance of standards (including the handling of complaints) are publicised. This section applies to those television and radio services listed at subsection (3).

Clause 317: Proscription orders

645.     Where OFCOM have notified the Secretary of State that a foreign television or sound service repeatedly contains programmes with content that offends taste and decency, incites crime or disorder or is offensive to public feeling, she may issue a proscription order where she is satisfied that to do so is in the public interest and compatible with the international obligations of the United Kingdom. Subsection (6) sets out the services to which this clause applies.

    *The meaning of a foreign service is given in subsection (7) and broadly encompasses those services which do not need to be licensed under the Broadcasting Acts 1990 and 1996 but would be if they were provided in the United Kingdom or the provider fell within the jurisdiction of the United Kingdom for the purposes of the Television without Frontiers Directive.

Clause 318: Effect of proscription order

646.     Any service prescribed by the Secretary of State in an order made under clause 317 cannot be included in any multiplex service or any cable package service (as defined in subsections (3) and (4) respectively). The effect of subsection (5) is that the provision of radio and/or television (or similar) services via the internet will not constitute the provision of a cable package service.

Clause 319: Notification for enforcing proscription

647.     Where OFCOM have reasonable grounds to believe that a service proscribed by an order made under clause 317 is included in a multiplex service or cable package, they may notify the multiplex service provider or cable packager accordingly and require that person to cease including the proscribed service. OFCOM must give the notified provider at least 7 days to comply with their request, although he must cease to include the service within 7 days (if practicable). A notified provider has a statutory duty to comply with OFCOM's request, failure to comply with which may be enforceable in civil proceedings by OFCOM.

Clause 320: Penalties for contravention of notification under s.319

648.     OFCOM may impose a penalty on any multiplex service provider or cable packager who contravenes a requirement notified by OFCOM under clause 319. Before imposing a penalty, OFCOM must give a multiplex service provider or cable packager a reasonable opportunity to make representations. Any fine imposed must be appropriate and proportionate to the contravention, and in any case may not exceed £5,000 per day for each day (or part thereof) that a multiplex service provider or cable packager includes a proscribed service in contravention of a notification made under clause 319. The Secretary of State may, by order, amend the maximum penalty set out in subsection (3).

Clause 321: Party political broadcasts

649.     OFCOM must include in the licence for every licensed public service channel and every national radio service conditions requiring the licensee to broadcast party political broadcasts and referendum campaign broadcasts and to observe associated rules set by OFCOM. These rules may include provision for determining which political parties and designated organisations may make broadcasts, and how long and frequent these broadcasts may be. OFCOM are subject in this respect to the Political Parties, Elections and Referendums Act 2000 (c.41), and shall have regard to the views of the Electoral Commission. Paragraph 33 of Schedule 18 provides that any rules made by the ITC under section 36 of the Broadcasting Act 1990 or by the Radio Authority under section 107 of that Act, which are in force immediately before the commencement of this clause, shall have effect as rules made by OFCOM under this clause.

Clause 322: Retention and production of recordings

650.     OFCOM are to include in the licence for every programme service licensed under the Broadcasting Acts conditions requiring the licensee to record every programme that they broadcast, and to keep each recording for a specified period (which for radio programmes shall be no longer than 42 days, and for television programmes shall be no longer than 90 days) and, at OFCOM's request, to provide them with any such recording as well as any script or transcript of the relevant programme that the licensee is able to produce. Under subsection (3), OFCOM may themselves make and use recordings of programmes for the purposes of supervision. However, subsection (4) makes it clear that they are not required to vet programmes in advance of their being broadcast.

Clause 323: Conditions securing compliance with international obligations

651.     OFCOM are to include in the licence for every service of the types listed in subsection (3) conditions to secure compliance with such of the United Kingdom's international obligations as have been notified to OFCOM by the Secretary of State.

Clause 324: Government requirements for licensed services

652.     The Secretary of State, or any other Minister of the Crown, has the power by notice to require OFCOM to issue a direction to licence holders to include a particular announcement in their service at specified times. The Secretary of State alone may require OFCOM to direct licence holders to refrain from including any particular matter in their services.

*Subsection (9) makes clear that Minister of the Crown includes the Treasury.

653.     Where a licence holder is obliged to make a particular announcement, they may make clear in their service that this is being carried out further to a direction given by OFCOM. Similarly, where a licence holder has been obliged to refrain from including a particular matter in their services, the licence holder may announce in the service that this is the case, and may also announce when that obligation has come to an end.

654.     The purpose of these provisions is principally to allow Ministers to address matters of national security or major public interest, and to do so in such a way that the affected broadcasters are not required to take editorial responsibility for the content of such directions.

Clause 325: Promotion of equal opportunities and training

655.     OFCOM are to include in the licence for every service to which this clause applies (as defined in subsections (5) and (6)) conditions to promote equality of opportunity in relation to employment with the licence holder. The conditions must promote equality between men and women and between different races. Licensees must also be required to promote the fair treatment of disabled persons.

656.     OFCOM must also impose on licensees any conditions necessary to ensure that licensees make such arrangements for the training and retraining of their employees (employed both in the provision of the service and in the making of programmes to be included in the service) as OFCOM consider appropriate.

657.     The conditions imposed by OFCOM must require licensees to ensure that the arrangements put in place by the licensees to meet equal opportunities and training requirements are notified to those affected by them. Also the licensee must review the arrangements from time to time and publish annually his observations on their operation.

658.     Those licensees that employ no more than 20 people, or broadcast for no more than 31 days per year, are not covered by these provisions.

Clause 326: Corresponding rules for the BBC and the Welsh Authority

659.     This clause provides that Schedule 12 shall have effect. Schedule 12 provides for the imposition on the BBC and the Welsh Authority of obligations that correspond to those described above in the regulatory regime for licensed providers and is described in more detail below.

Clause 327: Review of fulfilment by Welsh Authority of public service remits

660.     The Welsh Authority is under a duty to ensure that that S4C, S4C Digital and services approved by the Secretary of State under clause 200 fulfil their public service remits. The Secretary of State may review the Welsh Authority's performance in this regard, but not within five years of the passage of the Act. Any subsequent review must not be undertaken within a further five-year period. The Secretary of State must consult the National Assembly for Wales and the Welsh Authority on the matters under review, must have regard to their opinions when reaching her conclusions and must publish a report of those conclusions after each review.

Clause 328: Directions to Welsh Authority to take remedial action

661.     If the review described in the notes to clause 327 above reveals that, without reasonable excuse, the Welsh Authority has not properly performed their duty to fulfil their public service remits, the Secretary of State may, having consulted the Welsh Authority, direct the Welsh Authority to take remedial action. Any such direction must first be approved, in draft, by both Houses of Parliament.

Clause 329: Imposition of penalties on the Welsh Authority

662.     This clause gives OFCOM the power to fine the Welsh Authority where they are satisfied that a contravention of any requirement listed in subsection (1) has occurred. Broadly, these include Tier 1 or Tier 2 obligations relating to programme quotas, news and current affairs, programming standards, advertising or sponsorship, complaints procedure publicity, international obligations, assistance for the disabled and fairness. The maximum fine is £250,000. Under subsection (6), the Secretary of State may increase the maximum penalty by order. Subsection (4) states that OFCOM may not fine the Welsh Authority without giving it a chance to make representations in its defence. Subsection (5) makes clear that the imposition of a fine would not prevent OFCOM from issuing a direction to the Welsh Authority, under paragraph 14 of Schedule 12, to broadcast a correction or a finding by OFCOM of a breach of the standards code issued under clause 307.

Clause 330: Contraventions recorded in Welsh Authority's annual report

663.     This clause amends Schedule 6 to the Broadcasting Act 1990 to ensure that any notifications given to the Welsh Authority by OFCOM about contraventions by the Authority of either of the Broadcasting Acts or Part 4 of this Bill are recorded in the Welsh Authority's annual report.

Clause 331: Provision of information by Welsh Authority

664.     This clause imposes a duty on the Welsh Authority to provide such information as OFCOM reasonably request in order that OFCOM may fulfil their functions, under this Bill and the Broadcasting Acts, as regards the Welsh Authority.

Clause 332: Transmission of statement of findings

665.     This clause amends sections 40 and 109 of the Broadcasting Act 1990 (power to direct licensee to broadcast correction of apology). To require instead that OFCOM may direct the broadcast of a correction or a statement of OFCOM's findings in relation to a contravention of licence conditions, for example failure to comply with OFCOM's standards code. This change arises from a recommendation of the Joint Committee on Human Rights.

Clause 333: Financial penalties imposable on licence holders

666.     Schedule 13, which modifies the maximum penalties that may be imposed on the holders of Broadcasting Act licences, shall have effect. Further detail on this Schedule is set out below.

Clause 334: Broadcasting Act licence fees and penalties

667.     Under the provisions of subsection (2), where OFCOM receive a payment of the kind listed in subsection (1), it is recoverable by them as a debt due from the person who must pay it. These payments include additional licence fees paid under certain licences granted under the Broadcasting Acts 1990 and 1996 (additional to those made towards the administrative costs of OFCOM), or fines imposed by OFCOM on licence holders for contraventions of Parts 1 or 3 of the Broadcasting Act 1990, Part 1 or 2 of the Broadcasting Act 1996 and Part 3 of this Bill.

Chapter 5: Media Ownership and Control

Clause 335: Modification of disqualification provisions

668.     This clause amends Part 2 of Schedule 2 to the Broadcasting Act 1990. Under subsection (1) persons not resident or established in the EEA are no longer disqualified from holding Broadcasting Act licences. The disqualification of advertising agencies under paragraph 6 of that Part is also lifted. Subsection (3) allows OFCOM to give consideration to applications from religious organisations for the following licences granted under the Broadcasting Acts 1990 and 1996:

  • restricted service licences;

  • digital programme licences;

  • digital additional services licences;

  • licences to provide television licensable content services;

  • licences under Part 3 of the 1990 Act (other than a national licence) - meaning local analogue radio licences, licences to provide radio licensable content services, and licences to provide additional services;

  • national and local digital sound programme licences

669.     OFCOM are required to publish guidance for persons wishing to make such applications.

670.     Subsections (5), (6) and (7) allow the Secretary of State, following consultation with OFCOM and with Parliament's approval, to make an order amending or repealing the provisions of paragraph 2 or 2A of Part 2 of Schedule 2 to the 1990 Act (those that deal with the remaining disqualifications relating to religious bodies).

Clause 336: Licence holding by local authorities

671.     This clause inserts a new provision into Part 2 of Schedule 2 to the Broadcasting Act 1990, the effect of which is that local authorities will no longer be disqualified from holding a licence where the service in question is provided solely in order to comply with the functions of local authorities under section 142 of the Local Government Act 1972.

672.     The function referred to in section 142 relates to the provision by a local authority of information concerning the services available within the area of that authority and that are provided by the authority, another local authority, or any authority, board or committee which discharges similar functions. Subsection (2) provides for the insertion into section 142 of provisions allowing a local authority to broadcast such information, or information generally relating to the functions of the authority, by way of an electronic communications network or electronic communications service.

*electronic communications network and electronic communications services are defined in clause 28.

673.     Subsection (3) amends section 2(1) of the Local Government Act 1986 in order to widen the prohibition on a local authority from publishing any material which appears to be designed to affect public support for a political party, to a local authority arranging for such a publication.

Clause 337: Relaxation of licence-holding restrictions

674.     Subsection (1) repeals the rules in Parts 3, 4 and 5 of Schedule 2 to the 1990 Broadcasting Act relating to restrictions on accumulations of interests and on licence holding by newspapers and telecommunications providers, some of which are replaced by Schedule 14 of this Bill. Rules relating to licences for local sound broadcasting and local digital sound programme service licences are to be replaced by provisions made by order under paragraphs 11 and 12 of Schedule 14. Subsections (4), (5) and (6) ensure that these rules will not lapse before the relevant orders come into force.

675.     Part 1 of Schedule 14 establishes the new rules relating to the ownership of television services, replacing the rules repealed by clause 337. These apply only to Channel 3 services and not, as before, to Channel 5.

676.     Paragraph 1 sets out the circumstances in which a person may not hold a licence for a Channel 3 service. A person may not hold any such licence if he runs national newspapers with more than a 20 per cent of the total national market share. No one may own a regional Channel 3 licence if he runs local newspapers which together have more than a 20 per cent of the local market share in the coverage area of the service. In calculating the relevant market share of any proposed licensee, he is to be treated as though he and every person connected with him are one person.

677.     Paragraph 2 establishes further restrictions on participation in companies holding Channel 3 licences. No one may hold more than a 20 per cent share in such a company if he runs national newspapers with more than a 20 per cent share of the total national market share. A company in which such a newspaper proprietor holds more than a 20 per cent share cannot be a participant with more than a 20 per cent share of a company that holds a licence. No licence-holder may own more than a 20 per cent share of any national newspaper company.

678.     Paragraph 3 explains how 'national newspaper', 'local newspaper' and 'market share' are to be defined for the purposes of the above rules. References to national or local newspapers are references to newspapers that circulate wholly or mainly in the United Kingdom (national) or in a part of the United Kingdom (local). Where there is any difficulty with this definition (for example if a newspaper is published in different regional editions) OFCOM have the power to define whether the newspaper in question is national, local or both. Market share is defined as the percentage of total newspaper sales in the relevant area (either the UK or a Channel 3 licence region) represented by sales of the newspaper in question over the previous six months. If a newspaper is distributed free of charge, 'sales' are taken to include the number of copies distributed.

679.     Paragraph 4 identifies a person as running a newspaper if he is either the proprietor of the newspaper or controls a body which is the proprietor. The definition of 'control' is that of the Broadcasting Act 1990, Schedule 2, Part 1, paragraph 1(3).

680.     Paragraph 6 gives the Secretary of State power to repeal or modify any of the rules in Part 1 by order.

681.     Part 2 of Schedule 14 establishes the rules relating to the ownership of radio multiplex licences, again replacing the rules repealed by clause 337. Paragraph 7 prevents one person from owning more than one national radio multiplex licence at the same time.

682.     Paragraph 8 deals with the ownership of local radio multiplex licences. It establishes a limit of one multiplex licence per owner in areas where there is overlap of services so that the potential audience of one service includes at least half the potential audience of another. OFCOM are to lay down the technical standards by which 'coverage area' can be determined. If a person is in contravention of this rule when it is enacted, but is not in contravention of the existing rules on multiplex ownership, the contravention will be ignored and no divestment will be required until another person becomes the holder of the licences in question.

683.     Under Paragraph 10, the Secretary of State is given power to repeal or modify any of the rules in Part 2 by order.

684.     Part 3 of Schedule 14 outlines the scope for the Secretary of State to impose by order new rules on the holding of local sound broadcasting licences and local digital sound programme services. Such rules would replace those repealed by clause 337.

685.     That Part allows the Secretary of State to impose limits on the number of licences that any person owns, or to prevent a person owning any licences at all in certain circumstances. The factors that would be considered in establishing rules of this sort include:

  • the degree of overlap of the different services involved;

  • the size of the potential audience for those services and the times when they would be made available

  • the extent to which there would be other persons with licences to broadcast to the same potential audience, the number of those persons and the audience size and coverage area of their stations;

  • whether that person runs national newspapers, and the national market share of those newspapers;

  • whether that person runs local newspapers that serve any part of the coverage area for which they would hold a radio licence, and the newspapers' local market share;

  • whether and to what extent the coverage area of the licence in question overlaps with the coverage area of a regional Channel 3 service for which he also owns the licence.

686.     Paragraph 12 gives the Secretary of State the same powers to impose limits on local digital sound programme services, with the exception that the newspaper and Channel 3 assets held by a person are not included in the list of factors that may be considered when establishing rules.

687.     Paragraph 13 explains that definitions of the different forms of licence-holding, and of national and local newspapers and their market share, may be made under the order-making powers in paragraphs 11 and 12. Paragraph 14 contains transitional provisions for orders made under paragraphs 11 and 12. If a person is in contravention of any rule established by such an order when it is enacted, but is not in contravention of the rules that preceded it, then the contravention will be ignored and no divestment will be required until there is a relevant change of circumstances in the licence-holding arrangements.

688.     Part 4 of Schedule 14 contains supplementary provisions relating to its implementation and interpretation. There is a requirement for the Secretary of State to consult OFCOM before making an order under any provision in the Schedule. There is also a stipulation that Part 1 of Schedule 2 to the 1990 Act should apply to Schedule 14 in the same way as it does to Part 2 of that Schedule. An overlapping area is defined as including any area that is the same as, or lies wholly inside, another area.

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Prepared: 20 November 2002