Memorandum submitted by The History Channel
UK
The History Channel UK is a company founded
in 1995 by A&E Television Networks and BSkyB. It programmes
historical documentaries and dramas. It is well regarded for the
high quality of its programmes, its work in the community with
organisations such as English Heritage and the National Archive
and for its website which is recommended by the National Grid
for Learning. An ITC poll found that The History Channel UK was
considered as one of the UK's "most respected and high quality"
broadcasters.
With regard to BBC Charter Review The History
Channel UK has two specific concerns: new commercial BBC channel
launches and the BBC's behaviour in acquiring and commissioning
programmes. These concerns specifically regard the nine commercial
channels which the BBC owns through its UKTV joint venture. Although
these channels are not directly financed by the licence fee, they
nevertheless enjoy significant competitive advantage through their
close association with the BBC.
In 2002 the BBC launched UKTV History, according
to the BBC "in direct competition with the History Channel".
Since then the BBC has launched several new commercial channels.
As the BBC's commercial channel presence has increased, so too
has its aggressive approach to programme acquisition and commissioning
with a view to denying its competitors important programme supply
by leveraging its purchasing strength as a licence fee-funded
broadcaster. These factors have created the very real risk for
the BBC's competitors of eventual foreclosure as a result of the
BBC's aggressive behaviour.
The History Channel UK has been invited to give
oral evidence before the Committee on 14 September 2004. In anticipation
of our appearance we submit this brief summary of our views regarding
BBC Charter Review.
1. In its various guises as (i) a licence
fee funded broadcaster, (ii) a commercial broadcaster (through
its UKTV venture with Flextech) and (iii) the dominant supplier
and purchaser of programming in the UK, the BBC constitutes a
massive structural intervention in the UK's broadcasting market.
2. The History Channel UK (alongside other
commercial competitors of the BBC) was understandably alarmed
at the DCMS' covert decision in April 2000 to lift its 1997 restriction
on the launch of new BBC commercial channels with UKTV, such that
the BBC is now apparently free to launch as many commercial channels
as it pleases. Our concerns were exacerbated when the DCMS granted
this very significant permission without either a public consultation
or the apparent knowledge of (and review by) this Committee. Since
that decision, the BBC's UKTV venture has launched several new
channels with severe consequences for its competitors.
3. The DCMS has not, therefore, provided
any guarantee of proper regulation of the BBC. The BBC's competitors
are entitled to greater certainty about the scope of the BBC's
activities than is currently the case. Ofcom should have a formal
role in relation to any future approvals of new channels, including
commercial channels operated in joint venture with the BBC.
4. Our other key concern relates to programme
acquisition. In its 2002 Review of the UK Programme Supply Market,
the ITC commented that BBC Worldwide's involvement in commissioning
of programmes by the BBC did not seem to occur on arm's length
terms. In relation to commissioning programmes from independent
suppliers, Ofcom's guidelines for public service broadcasters
now make it clear that there should be no terms in the BBC's contracts
making them (actually or in effect) conditional on the acceptance
of a bundled deal (bundling primary and secondary rights) or on
the use of BBC Worldwide for distribution. The History Channel
UK acquires rather than commissions many of its programmes. The
History Channel UK is concerned that behaviour by the BBC which
would not be permitted by Ofcom's guidelines in relation to commissioned
programming, and which would appear to contravene the BBC's Fair
Trading Condition, is occurring in relation to acquisitions by
the BBC. The History Channel UK considers that Ofcom, rather than
the Governors, is better placed to obtain the necessary evidence
and consider these issues objectively.
5. The History Channel UK believes that
Charter Review should address these deficiencies in the regulation
of the BBC. This is necessary because the BBC has repeatedly manipulated
its programme rights and launched new channels in a way which
threatens both the BBC's competitors and the health of the UK's
broadcasting market.
September 2004
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