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Mr. Whittingdale: I am not sure that the Minister's assurances take us further forward. He says, for example, that the regime applied to cable and satellite operators is the same, because if a cable operator were to provide its own channel, it would be subject to those powers, whereas a satellite operator that did not provide channels would not. That theoretical argument is undoubtedly correct, but the practical effect is that, in the present market, cable operators have to be outside the arrangements and satellite operators do not. The Bill's provisions appear to be discriminatory.
Although the Bill states that Ofcom should use its Competition Act powers in preference to its Broadcasting Act powers, it is left to Ofcom to decide whether that is the more appropriate way to proceed. That an appeal to the tribunal is available in respect of competition purposes is something, but the Minister appears to concede that Ofcom may use its Broadcasting Act powers for purposes that do not relate to, for example, content regulation, taste and decency, or standards, which come under part 3, but that do relate to economic matters, even though they do not necessarily come under the competition requirements of clause 3(1).
I have a feeling that the Minister is confirming my fear that it is at least possible that Ofcom may interpret its general duties to impose conditions using its Broadcasting Act powers, which most people would see as economic regulation rather than content regulation. Even though the Minister has not reassured me, I shall not press for a Division, as I suspect that the subject will be debated again later in our proceedings. We are to debate some procedural safeguards that might help under amendments to clause 305 that stand in the name of my hon. Friend the Member for South Cambridgeshire. I beg to ask leave to withdraw the amendment.
Amendment, by leave, withdrawn.
Clause 304 ordered to stand part of the Bill.
Clause 305
Exercise of Broadcasting Act powers for a competition purpose
Mr. Whittingdale: I beg to move amendment No. 620, in
clause 305, page 263, line 10, leave out 'and'.
The Chairman: With this it will be convenient to discuss the following:
Amendment No. 621, in
clause 305, page 263, line 12, at end insert
'and—
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Amendment No. 622, in
clause 305, page 263, line 20, at end insert—
'(3A) In any case where OFCOM decide to exercise any of their Broadcasting Act powers for a competition purpose, OFCOM shall give written notice to any person affected by that decision, stating that—
(a) the exercise of the power in question is to any extent for a competition purpose; and
(b) any person so affected may appeal to the Competition Appeals Tribunal against the decision in accordance with this section.'.
Amendment No. 623, in
Amendment No. 626, in
clause 306, page 264, line 15, leave out 'and'.
Amendment No. 627, in
Amendment No. 628, in
clause 306, page 264, line 18, leave out 'his' and insert 'their'.
Amendment No. 630, in
clause 306, page 264, line 30, at end insert—
'(4A) If, and to the extent that, OFCOM determines that a provision subject to periodic review under this section is or may be expected no longer to be necessary—
(a) in order to secure fulfilment of their duties under section 3(1)(a); or
(b) because the market to which the provision relates is effectively competitive and no licence holder is able to exercise significant market power, as defined under section 74 of this Act,
then OFCOM shall be required to revoke or withdraw that provision, or modify it to the extent consistent with its continuing requirement under subsection (4).'.
New clause 42—Test for setting or modifying conditions or directions—
'(1) When exercising any of their Broadcasting Act powers for a competition purpose as defined in section 305, OFCOM must not—
(a) set a condition or issue a direction; or
(b) modify such a condition or direction,
unless they are satisfied that the condition or direction or (as the case may be) the modification satisfies the test in subsection (2).
(2) That test is that the condition, direction or modification is—
(a) objectively justifiable in relation to the services to which it relates;
(b) not such as to discriminate unduly against particular persons or against a particular description of persons;
(c) proportionate to what it is intended to achieve; and
(d) in relation to what it is intended to achieve, transparent.'.
New clause 43—Procedure for setting, modifying and revoking conditions or directions—
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the publication of a notification setting out the conditions, directions or modifications; and
(b) the way in which such a condition or direction is to be revoked is by the publication of a notification stating that the condition or direction is revoked.
(2) Before setting conditions or directions, or modifying or revoking a condition or direction so set when OFCOM are exercising any of their Broadcasting Act powers OFCOM must publish a notification—
(a) stating that they are proposing to set, modify or revoke the conditions or directions that are specified in the notification;
(b) setting out the effect of those conditions, directions, modifications or revocations;
(c) giving their reasons for making the proposal; and
(d) specifying the period within which representations may be made to OFCOM about their proposal.
(3) That period must end no less than one month after the day of publication of the notification.
(4) OFCOM may give effect, with or without modifications, to a proposal with respect to which they have published a notification under subsection (2) only if they have considered every representation about the proposal that is made to them within the period specified in the notification.
(5) The publication of a notification under this section must be in such manner as appears to OFCOM to be appropriate for bringing the contents of the notification to the attention of such persons as OFCOM consider appropriate.'.
New clause 44—Setting and publication of guidance and codes—
'(1) Before setting guidance and codes which includes matters which will have effect to any extent for a competition purpose under a provision of this Part of this Act (other than under sections 291, 294 or 312), of the 1990 Act or of the 1996 Act, OFCOM must publish, in such manner as they think fit, a draft of the proposed guidance or code.
(2) After publishing the draft guidance or code, OFCOM must consult every person who holds a relevant licence.
(3) Subsections (1) and (2) apply to a proposal by OFCOM to revise any guidance or a code as they apply to a proposal to set such guidance or code.
(4) Where OFCOM set guidance or a code, they must publish the guidance or code in such manner as they consider appropriate for bringing it to the attention of the persons who, in their opinion, are likely to be affected by the guidance or code.
(5) Where OFCOM revise a guidance or code, they shall similarly publish the guidance or code containing the standards as revised.
(6) Where OFCOM publish a guidance or code under subsection (4) or (5), they shall send a copy of it to the Secretary of State.
(7) In this section a person who holds a ''relevant licence,'' in relation to draft guidance or a draft code, means—
(a) to the extent that the draft guidance or code relates to—
(i) television programme services,
(ii) the public teletext service, or
(iii) an additional television service,
a person who holds a licence under any of Part 1 of the 1990 Act (independent television services), section 18 of the 1996 Act (digital television programme services), section 25 of that Act (digital additional television services), or section 214 of this Act;
(b) to the extent that the draft guidance or code relates to radio programme services, a person who holds a licence under Part 3 of the 1990 Act (independent radio services), section 60 of the 1996 Act (digital sound performance services) or section 64 of that Act (digital additional services); and
(c) the BBC and Welsh Authority.'.
Mr. Whittingdale: I shall not set out at great length the background to the amendments, because they
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cover essentially the same issues as we discussed in our debate on clause 4. Instead, I shall outline the purpose of each amendment, as my hon. Friend the Member for South Cambridgeshire has explained it.
Amendments Nos. 620 and 621 would ensure that the safeguards in the clause applied not only to the items in subsection (1)(a) to (d) but to codes and guidance. Amendment No. 622 would require the issuing of a notice so that the availability of an appeal is fully transparent to those who might be affected. Amendment No. 623 would narrow the scope of subsection (6) so that the decision whether it was more appropriate to use powers under the Competition Act 1998 would be subject only to judicial review; but if in making such a decision Ofcom was alleged to have acted in contravention of subsection (3) and to have used its Broadcasting Act powers for a competition purpose when it had determined that Competition Act powers would be more appropriate, that, too, could be adjudicated on its merits. Judicial review would be too procedural in that instance, and it is important that there should be an opportunity to examine the merits of the decision.
Amendments Nos. 626 and 627 to clause 306 would require conditions applied for a competition purpose to be subject to review. Amendment No. 628 is a minor drafting amendment, which I hope that the Minister will consider acceptable. Amendment No. 630 would amend clause 306 as amended by amendment No. 627. It introduces a request that if, following a review, a provision is held to be not necessary to fulfil the duty to further the interests of consumers through competition where appropriate, that provision should be withdrawn or modified; and, as a separate test, if the market is effectively competitive, Ofcom should liberalise by disapplying the unnecessary provision. That would bring the competition provisions of the broadcasting part of the Bill more into line with the telecoms part, in which an effectively competitive market is not subject to conditions and there is a periodic review.
New clause 42 would provide for tests of proportionality, justification, non-discrimination and transparency in the application of competition-related powers. New clause 43 is procedural: it sets out how Ofcom should go about setting or modifying conditions and directives. New clause 44 sets out desirable procedures for the creation of transparent and accountable processes under which Ofcom can establish and publish guidance and codes where a competition purpose is involved.
The amendments and new clauses would provide a more complete structure of competition powers and safeguards, which Ofcom could use in relation to the broadcast industry. They build on the arguments that I advanced in relation to clause 304, and I hope that the Minister will consider strengthening the safeguards in the way that we suggest, because there is a widespread view in the industry that that is necessary.
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