Examination of Witnesses (Questions 480-483)
BSKYB
8 MAY 2007
Q480 Chairman: So you see the total
revenue from the licence fee as potentially better used by the
BBC to produce public service broadcasting; you do not see it
as offering an opportunity to fund other broadcasters through
the licence fee for public service programming or, indeed, a new
vehicle like the PSP?
Mr Darcey: I guess we get nervous
about the PSP because, as soon as people start talking about that,
it inevitably seems to move round to the subject of more money,
more public investment, more public intervention, and that, I
think, as I laid out in my opening remarks, we do not think is
warranted. If the PSP was wholly restricted to a reallocation
of the existing degree of subsidy, I think that is a different
question, although many other issues are raised in terms of whether
that money just ends up being used to fund things that were already
going to happen anyway.
Mr Le Jeune: The other issue with
the PSP is that it has been a fairly slippery concept as far as
we can see. As you know, having started originally as a tool to
tackle market failure—let us assume for the sake of argument,
that market failure genuinely did exist—it has now evolved
into a commissioning arm which would create public sector content
on the Internet, of which there is no shortage whatsoever. In
fact, there is probably more now than there has ever been in human
history. Therefore, we consider it to be a very puzzling concept
at the moment, verging on the bizarre.
Q481 Chairman: Leaving aside the
PSP and just focusing on traditional broadcasters, would you see
some merit in making available a proportion of the licence fee
funding on a contestable basis for perhaps other channels that
currently broadcast on Freeview or satellite?
Mr Darcey: In principle I think
that is an interesting idea, but, as I said, I think there are
areas which make us nervous. One, as I said, is how you deal with
the extreme likelihood that broadcasters who were already considering
doing something because they found it commercially attractive
to do so manage now to characterise that project as something
needing public subsidy and money is simply moved to fund something
that would in fact have happened anyway. I think that is quite
challenging to deal with, and I guess we could put our hands up
and say, "We would like some money for Sky News."
I doubt that any would be sent in our direction, because people
would say, "You already do Sky News, so you do not
need any public subsidy", but if things are being considered
like that, you can imagine that broadcasters will create departments
whose jobs will be to repackage such proposals and bid for such
money, and I do not really know how you deal with that. The other
issue that I think would concern us is when you start mixing public
subsidy, financial subsidy like that, in with a broadcaster who
is also funded by advertising. When you have a mixed funding world
like that, I think you enter into a complex world in which you
have the potential for distortion of competition and state aid
type concerns where there is cross-subsidy between the public
funding and the advertising funding competition.
Q482 Philip Davies: Martin said "if
there were a market failure", if there happened to be. Do
you believe there is any area of genuine market failure that warrants
any government intervention, or do you think that a free for all—
Mr Darcey: Over and above what
is the situation by the BBC?
Q483 Philip Davies: Do you think
there is some need for some Government intervention? You do not
think that a commercial free-for-all without any licence or anything
would deliver the right kind of broadcasting?
Mr Darcey: At the moment we tend
to take three billion pounds of licence fee money. That is taken
as read. We are not really debating whether, were that to disappear
in a puff of smoke, there would be market value? That is another
big debate. We did quite a lot of that over the last few years,
but for the foreseeable future that that is in place, that is
part of the back-drop. I think the question is: with that in place
is there unaddressed or unaddressable market failure where you
need to bring to bear more public subsidy, and I think we find
that hard to crack.
Chairman: I think that is all we have.
Thank you very much.
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