Examination of Witnesses (Questions 580
- 586)
TUESDAY 26 OCTOBER 2004
OFCOM
Q580 Rosemary McKenna: Based on commercial
advertising.
Mr Carter: Based on subscription.
20 years ago there was no subscription market; today there is
more subscription income in television than there is advertising.
That is a revolution in the economics of television.
Q581 Chairman: One can have arguments
about the nature of the content of the BBC programming schedules;
one can have arguments about the funding of the BBC; but what
is universally agreed now, including by the Chairman of the BBC,
is that there area very serious issues relating to the governance
and accountability of the BBC. Perhaps you could share your thoughts
with us on that?
Lord Currie of Marylebone: We
went a certain way in our report into that question but, broadly
speaking, the Ofcom position is that it is really not for us,
sharing regulatory responsibility in parallel with the BBC Governors,
to be putting forward proposals as to how that set of issues should
be addressed. What we are clear about is that we do think there
is a very important distinction between regulation and governance.
Those are two functions that the BBC Governors at present have
been asked to combine. We think being clear about that distinction
is important. There are many ways in which that distinction could
be carried through and I do not think it is for Ofcom to particularly
express a view on that. I think it is for us to make whatever
arrangement Parliament and Government decide to make work—just
as we are making with the BBC the arrangements in the Communications
Act, which are complex; we are making those work in cooperation
with the BBC.
Q582 Chairman: Mr Grade, both when
he came before us and on other occasions since he took over as
Chairman, has stated very openly there is schizophrenia between
the Board of Governors as a champion of the BBC and the body to
whom the BBC is accountable, without going into the merits of
the Hutton affair. What is clear is, that is a problem, and it
is a difficult problem which needs to be solved. I know it is
your view—and it has, on the whole, become my view—that
you should not take on total responsibility for the BBC. How do
you deal with that? Do you set up yet another new body, an Ofcom
for the BBC alone, as it were? Do you set up two different sorts
of management within the BBC, or do you change the whole nature
of the BBC as it has operated since 1927 of governance and
administration and get rid of the Board of Governors and the chairmanship
as it is now, and have an Executive Chairman and a Board of Directors,
including some non-executive directors? Is it really appropriate
in this day and age that the BBC should be governed by people
who, on the whole, have got no experience in broadcasting, and
who are largely there on tokenism, whether it is ethnic tokenism,
sexual tokenism, class tokenism or territorial tokenism?
Mr Carter: Blimey!
Q583 Chairman: That is what you are
there for!
Mr Carter: No-one told me that
when I took the job, I have to tell you, Chairman! If we had a
pound for every time we have been asked the question, "Surely
you would like to take on full regulatory responsibility for the
BBC", we could probably fund Ofcom without any tariffing
on industry. We have no imperial ambitions at all. We are more
than busy enough. With that caveat I will give you my view on
the important question. The first point is, I genuinely believe—and
I think we have some responsibility for this and I think the BBC
have some responsibility for this—there is a lack of clarity
of understanding about the range of our regulatory remit with
the BBC. It is quite substantial already: Tier 1; Tier 2: independent
quotas; we are a competition authority of broadcasting; we license
the multiplexes. I could go on. My strong advice and recommendation
on this question is that if change is going to be made, please,
let us not have an incremental change which just layers another
tweak on a series of changes that appear to already have been
made incrementally. That would be my first point. On the second
point—is an Ofbeeb or Ofpsb a good idea—it may well
be. My only personal observation on that, Chairman, would be that
the regulator needs to have institutional clout and size and scale.
I think there are some important questions about how that could
be achieved as a solitary regulator of one entity, even if that
entity is of scale. Thirdly, is it possible for that schizophrenia
to be made to work with hard and fast separation of roles between
the Governors as regulators and the Governors as champions? In
theory I think it is and we, like others, look forward to seeing
the BBC's recommendations on how they could do it. I do not know
if that helps or answers your questions?
Q584 Chairman: I must confess it
does not. It is not so much the role of Ofcom—I can quite
understand that Ofcom does not want to take on any more. The problem
is—although, as you have said, the range of responsibilities
towards the BBC that Ofcom has does not solve the central dilemma—that
central dilemma will not go away; because although, with luck,
there will never again be an episode of the kind that there was
last year, one cannot rule out the problem. As long as you have
got a Board of Governors made up of amateurs who can be railroaded
by their Chairman when it comes to the crunch, and as long as
you have got that schizophrenia then the problem of the BBC remains.
Channel 4 is very clear: (a) it has a structure but (b) it is
accountable to you on a statutory remit, which the BBC has not
got. Peter Mandelson's grandfather, Herbert Morrison, when asked
what socialism was said, "Socialism is whatever a Labour
government does". I do not think Tony Blair would say that
today. The BBC's attitude appears to be public service broadcasting
is whatever the BBC does. If we are going to go on having the
BBC, and we are going to go on giving it incrementally large sums
of money, as Adrian Flook has pointed out, then in this day and
age, well into the 21st Century, 77 years after the BBC's present
structure was created, this is a problem which is not going to
go away and may cause another crisis at some point, although one
hopes it will not.
Lord Currie of Marylebone: You
are reinforcing the point we have made, that separation between
regulation and governance is important. There are different ways
of accomplishing it, one of which would be to put the BBC into
the same relationship to Ofcom as Channel 4 is. There are other
solutions. I am sure these are issues that Lord Burns and his
team, who advise the Secretary of State on this question, will
be considering very carefully indeed.
Q585 Derek Wyatt: I just wanted to
ask an additional question. Lord Currie, in your Fleming Lecture
you say that the Communication Act is carefully framed to make
the distinction between television and radio, broadcast content
as opposed to material delivered over the Internet, so a complaint
to Ofcom about harm and offence in a television programme would
be investigated by the regulator. You go on to say if the same
material were then to be screened on a broadcaster's website it
would be for the Internet user to act and choose their own regulator.
Often there is no role to play whatsoever. Earlier this morning
I asked whether you would consider a 24 hour, seven days a week
broadband channel, but if you do that you could not regulate it.
One of the problems, therefore, is how we approach this next area.
This is really just a suggestion. Is there some way that Ofcom
would hold a conference to look at this particular issue, because
you do not want to hold it but, on the other hand, if we are going
down the broadband route somehow we have got to tease these issues
out?
Lord Currie of Marylebone: I agree
with you that that issue, the collision between these two worlds,
one regulated and one unregulated, is a big issue. In that lecture
I think I indicated there needs to be a strong public debate around
these questions without pre-judging what the solutions might be.
Q586 Derek Wyatt: Will you lead that
debate?
Lord Currie of Marylebone: We
will think very seriously about that.
Chairman: You have satisfied everybody.
Thank you very much indeed.
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