The
Committee consisted of the following
Members:Chairman:
Mr.
Martyn Jones †
Anderson,
Mr. David (Blaydon)
(Lab) †
Berry,
Roger (Kingswood)
(Lab) Bone,
Mr. Peter (Wellingborough)
(Con) Brake,
Tom (Carshalton and Wallington)
(LD) †
Burt,
Lorely (Solihull)
(LD) Davies,
Mr. Quentin (Grantham and Stamford)
(Con) †
Ellwood,
Mr. Tobias (Bournemouth, East)
(Con) Evans,
Mr. Nigel (Ribble Valley)
(Con) †
Field,
Mr. Mark (Cities of London and Westminster)
(Con) †
Follett,
Barbara (Stevenage)
(Lab) †
Irranca-Davies,
Huw (Ogmore) (Lab) †
Jackson,
Glenda (Hampstead and Highgate)
(Lab) †
Laxton,
Mr. Bob (Derby, North)
(Lab) †
Lepper,
David (Brighton, Pavilion)
(Lab/Co-op) †
Strang,
Dr. Gavin (Edinburgh, East)
(Lab) †
Stringer,
Graham (Manchester, Blackley)
(Lab) †
Woodward,
Mr. Shaun (Parliamentary Under-Secretary of State for Culture, Media
and Sport) † attended the
Committee Mark Egan, Committee
Clerk The following also
attended, pursuant to Standing Order No.
118: Whittingdale,
Mr. John (Maldon and East Chelmsford)
(Con) Fourth
Standing Committee on Delegated
LegislationThursday 13
July
2006[Mr.
Martyn Jones in the
Chair]Draft Television Licensable Content Services Order 20062.30
pm
The
Parliamentary Under-Secretary of State for Culture, Media and Sport
(Mr. Shaun Woodward): I beg to
move, That the
Committee has considered the draft Television Licensable Content
Services Order
2006.
The
Chairman: With this it will be convenient to consider the
draft Radio Multiplex Services (Required Percentage of Digital
Capacity) Order
2006.
Mr.
Woodward: I thank the Committee for the opportunity to
debate the two orders together this
afternoon. The debate
will, unfortunately, involve quite a lot of jargon and, if I am honest,
after only eight weeks in the job I am still learning the jargon. I
hope that hon. Members will not test me too far. If they do, I shall
try to play “University Challenge”, but will probably
have to suggest sometimes that I write to hon. Members if they push me
too far. None the less, I shall endeavour to work my way through the
jargon and, for the benefit of the Committee, will share my
understanding of
it. The world of
broadcasting has changed enormously. Over the last few years, the
growth of the creative industries has been meteoric. The opportunities
brought about by technological advances have revolutionised the way in
which we look at, listen to and, crucially, interact with broadcast
content. We need to keep adapting our rules to enable those
opportunities to be realised, both for the growth of the industry and
for the UK economy in general.
A multiplex, or mux, is a means
of bundling several digital services on to one, single frequency. Those
services include TV channels, radio stations and data services. Indeed,
a digital radio mux can carry around 10 DAB radio stations, as well as
data services such as scrolling text and electronic programme guides.
Digital radio multiplexes can cover either national or local areas,
depending on the type of licence awarded by the regulator, Ofcom.
Currently, a radio multiplex is distinguished by two key restrictions:
to carry only digital radio and to use no more than 20 per cent. of its
total capacity for data services. It cannot carry television. The aim
is to ensure that capacity is reserved for radio and not sacrificed for
television. The
orders seek to amend those two key characteristics. First, the draft
Television Licensable Content Services Order 2006 proposes to redefine
the type of content that digital radio muxes can carry. The change will
permit television as well as radio to be carried. Secondly, the draft
Radio Multiplex Services
(Required Percentage of Digital Capacity) Order 2006 will increase the
existing limit on data services from 20 per cent. to 30 per
cent. Taken together, the orders will enable digital radio multiplex
operators to offer consumers a combined package of television and DAB
radio, making the best use of valuable spectrum and utilising the most
recent technological developments. Historically, legislation has
sought to protect digital radio by preventing television from being
carried on radio muxes. That has protected spectrum for digital radio
that could otherwise have been sacrificed for television services.
However, we no longer believe that it is in consumers' interests that
that limitation should continue. Technological advances in compression
techniques—a reduction in the amount of capacity that is needed
to carry a service—have meant that television can co-exist with
rather then replace radio. We believe that, rather than protecting
spectrum for digital radio by restricting use by television, the
current legislation now prevents the development of innovative new
services and runs the risk of having the opposite effect of that
originally intended as a consequence of the technological changes that
have taken place since previous legislation. Those services will make
digital radio both more accessible and more appealing by allowing it to
combine with other services.
In effect, a mobile television
and DAB package will further increase the attraction of and demand for
digital radio. That was the outcome of a test conducted last year in a
pilot by BT Movio, a subsidiary of BT. The pilot allowed 1,000 mobile
phone users with specially designed phones to access three live
television services and more than 50 digital radio stations. The trial,
which was the largest of its kind in Europe, showed that even with the
additional services, consumers listened to more DAB radio than
television. Additionally, more than 73 percent of users said that they
would be prepared to pay for the service on the network. We believe
that the obvious customer demand for those services, along with the
assurance that the additional services will help to promote DAB radio,
make a strong case for a change in the legislation.
Having been convinced of the
demand for a combined DAB and TV package, we do not believe that there
is a case for preventing development in the industry or, indeed, for
restraining consumers from access to that technology. It may be worth
sharing with the Committee the fact that the findings from the BT Movio
pilot showed that only 11 per cent. of users would want fewer than 5
per cent. of television services. Users expect, as a minimum, dedicated
channels for sport, news and music, as well as additional channels for
a combination of films, sitcoms, reality TV and soaps. Consequently, BT
Movio stated that it cannot sustain a business model with less than
five services. This is why we propose to increase the maximum data
limit to 30 per cent., thus allowing for five television stations in
addition to the existing DAB radio services. Of course, television to
mobiles is not a new concept and some operators are already offering
mobile television services.
The Committee may ask whether
this is a special case for BT Movio and whether it represents an unfair
advantage for BT, particularly when others would seem to have
paid for spectrum for that purpose. I urge hon. Members to look at the
terms of the Broadcasting
Act 1996, which allowed for a certain amount of digital radio spectrum
to be used for services other than radio. Inasmuch as the proposal is
BT-specific, it is currently in relation to the existing one national
digital radio multiplex and BT is the first company to demand use of
that potential. However, there is nothing to prevent other companies
from developing similar services on local muxes or the same service on
a new national multiplex later next year. It is also important to note
that BT Movio’s proposals are also as a content provider and
that their services—effectively they work to warehouse the
services—will be open to other phone operators. Having put the matter into
context, we believe that the orders are a necessary response to the
technological changes in this very fast-moving industry. Both the
Broadcasting Act 1996 and the Communications Act 2003 recognised and
anticipated that technology in broadcasting would change and that we
would need to revisit the regulatory regime. We believe that the orders
will make possible innovative, converged services that can increase
take-up of and listening to DAB services. Not only will more people
listen to DAB on new devices but, having got used to those services,
they may want all their listening to be on DAB. We hope that that will
be the case but, at the very least, we believe that it is right to let
consumers decide. I hope that the Committee will approve the draft
orders. 2.38
pm
Mr. Mark
Field (Cities of London and Westminster) (Con): I thank the
Minister for his presentation. I have a few
questions. I entirely
agree and recognise that we are living in a fast-changing commercial
environment and that digital TV channels should perhaps be broadcast on
frequencies that are currently carrying only digital audio and data
services. The Minister was candid in suggesting that there may be
certain difficulties when those who paid significant sums in the
spectrum auction a few years ago see that BT has walked away with what
seems, at least in the short term, a commercial advantage.
A broader ranging concern
rather than a narrow commercial one—the Minister rightly pointed
out that is open to other players to come into the market—is
that in this fast-changing world there is a question of whether in the
longer term when there may be a further spectrum auction the obvious
bidders will be dissuaded from bidding, or bidding at as high a level
as the Government of the day would wish, simply because they might
think that in a fast-changing world other opportunities will open up
within a few years, such as the current opportunity for BT to move
forward. I am anxious that there should be a level playing field in a
fast-changing world, but I am not suggesting that there are any easy
answers. There is a worry that with a spectrum sale over a period, as
we had for third-generation licences, there may be an erosion of the
advantage that commercial operators bought and that that may prevent a
future Government from deriving full value. My hon. Friend the Member
for Maldon and East Chelmsford (Mr. Whittingdale) may have something to
say about that and other
matters. Turning to
the draft Television Licensable Content Services Order 2006, I want to
ask the Minister a few questions about the details of the consultation
but not,
he will be glad to know, about any matters of jargon. He may have been
involved in the matter for onlyeight weeks and I have been
involved for perhaps a few more months, but I am taking the place of my
hon. Friend the Member for North-East Cambridgeshire(Mr. Moss)
in the debate today. What is the Minister’s vision for the
future in this area? Does he believe that there will be sufficient
spectrum for the anticipated explosion of channels in future? As he
rightly pointed out, demand goes beyond the standard channels into
reality television, sport, arts and so on. There is now a demand among
all television consumers, even my generation which grew up with three
television channels and a fourth after 1982, for literally
hundreds of channels, many of which I suspect will increasingly come
from overseas. Does he believe that there will be sufficient spectrum?
I shall return to the other radio multiplex services issue, which
has returned to the House within a decade of previous spectrum
expansion. The
Minister touched on the whole issue of BT. With regard to competition,
is he satisfied that other organisations have been given sufficient
opportunity to put their own bids forward and that if other players in
the market want to come forward within a short period there will be
sufficient spectrum? Will the current digital audio and data services
operators suffer as a result of a diminution of their frequencies? Have
there been any thoughts in relation to the consultation? May I also ask
whether there is an extension in Government policy on mobile TV and
what discussions he has had? I realise that he has been in his job for
only a short period and that the matter may be in his in-tray for the
months and years
ahead. Turning to
radio multiplex services, I note that we have returned within eight
years or so to the minimum capacity to be reserved for broadcasting
services other than data services. In May 1998, that was raised from 10
per cent. to the current 20 per cent. and we are now looking to raise
it again to 30 per cent. Has the Minister given any thought to how soon
we may have to return to the matter? What percentage is being used? Are
we already reaching the ceiling of 20 per cent. and is there an urgent
need for the expansion that is being proposed today? What is his vision
for the future? I note
that paragraph 2.5 of the regulatory impact assessment suggests that if
the Government do not raise the percentage as proposed
today “a number of
innovative services may not be brought to
market”. What is the
evidence for that and does the Minister have any particular services in
mind that would be prevented from further research and development
before coming to the
market? Conservative
Members are fairly satisfied that there is a need and a desire to move
things forward. I appreciate that some of my questions may have to be
subject to correspondence after our sitting, but we are fairly
satisfied with the proposals. This is a fast-changing world and it
would be regrettable if we had to come here regularly, so I hope that
the Minister is satisfied that there will be some commercial certainty,
not just for BT but for other players in the years ahead without the
matter having to return to the
House.
2.44
pm
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