The Government response was received on 7 November 20231 and is appended to this report.
The Government welcomes the publication of the Culture, Media and Sport Committee’s final report on the draft Media Bill. We are grateful to the Committee for its thorough consideration of both the draft Media Bill and the views of stakeholders. The Committee’s work has helped to ensure that the Bill delivers the right outcomes for audiences and listeners in the face of rapid technological change.
The Government particularly welcomes the Committee’s assessment that the Bill “balances the needs of audiences, platforms and broadcasters”. The Bill, which the Government has now introduced, is the product of working closely with stakeholders and Ofcom, the independent regulator, to do just that. We are pleased that the Committee shares the view that we have found this balance.
The Government is also grateful to the Committee for their interim report on radio measures in the Bill. We were pleased to see the Committee’s support for the measures on connected audio devices and commercial radio deregulation. These reforms will ensure that commercial radio continues to thrive by removing regulatory burdens, and that UK radio stations remain accessible to listeners on their voice-activated devices.
The Government has outlined its responses to the Committee’s recommendations from both the final and interim reports on the Bill in this document. Recommendations from the final report are dealt with first.
Recommendation one: We recommend that the Government retains obligations on Public Service Broadcasters to provide specific genres of content.
Recommendation two: We recommend that the Secretary of State’s power to specify new categories of audiovisual content should only be exercisable following a recommendation from Ofcom.
The Government recognises the importance of a diverse media sector in the UK, where audiences are able to select from many different kinds of programmes according to their own tastes and interests.
Our public service broadcasters (PSBs) have an important and, crucially, a distinctive role to play in helping achieve this goal. To ensure the regulatory framework supports these outcomes, the draft Bill therefore replaces the 14 overlapping purposes and objectives PSBs must contribute to with a new, shorter remit.
Building on recommendations from the Public Service Broadcasting Advisory Panel, and Ofcom, this new remit maintains the requirement on our PSBs to produce a wide range of programmes, while also providing a much clearer sense of their distinctive role in the sector – ensuring free and universal access to culturally relevant programmes that reflect the lives and concerns of different communities and cultural interests and traditions within the United Kingdom; economically important programmes made in all parts of the UK; and democratically impactful content including news and current affairs. Under the terms of the Bill Ofcom will monitor, and hold PSBs accountable for, delivery of this new remit.
While the Government does not agree that reverting to a list of specific genre requirements is compatible with the aim to modernise the remit, we have reflected on the Committee’s recommendation, and listened to concerns from the Voice of the Listener and Viewer and others. The Bill has therefore been amended to specify that “the range of genres of audiovisual content made available by the public service broadcasters (taken together) constitutes an appropriate range of genres”.
In the Government’s view, this revised drafting strikes the right balance between delivering a streamlined remit for public service television, while retaining a clear obligation on the PSBs to deliver a range of genres.
In its report, the Committee notes concerns from some stakeholders that the removal of specific genres from the remit will limit Ofcom’s ability to monitor the range of audiovisual content available, and make recommendations. In the Government’s view, this concern is also addressed by the revision made to the remit in response to the Committee’s first recommendation. A reference to a range of genres will strengthen Ofcom’s ability to consider genres made available by the PSBs in its regular reporting, and make recommendations to the Secretary of State should a category of audiovisual content appear to Ofcom to be underserved. Given that, the Government accepts the Committee’s second recommendation and has amended the Bill accordingly.
Recommendation three: We recommend that Ofcom uses its monitoring of home internet access to inform its assessments of the accessibility of public service content on broadcasters’ linear channels.
The Government notes this recommendation, which is for Ofcom. The Government agrees with the view the Committee expressed in its report that it is critically important for audiences to continue to be able to access public service content however they choose to watch.
Recommendation four: We recommend that the Bill be amended to allow the Secretary of State to vary the 30-day on-demand requirement for particular types of content, following consultation with Ofcom and other appropriate stakeholders.
The Bill provides new flexibility for the PSBs to use on-demand content to fulfil the public service remit for television, and to count towards most programming quotas. The 30-day rule is designed to protect audiences’ access to that content, so they have a reasonable window in which to watch it on-demand.
However, the Government has listened to evidence from the PSBs on how audiences engage with different types of content. We now agree that applying the 30-day rule for both news and sports content would not meaningfully benefit audiences and is therefore disproportionate. The exceptions for news and sport have been made on the face of the Bill. The Government therefore does not see the need to take an additional power here.
Recommendation five: We recommend that the Bill should lower the threshold at which Ofcom can intervene to protect the public service broadcast regime, enabling it to step in before concerns about whether a Public Service Broadcaster is meeting its remit have already become serious.
Section 270 of the Communications Act 2003 provides Ofcom with broad powers to direct the provider of a licensed public service channel to remedy a “serious” failure to meet the public service remit for that channel, or to adequately contribute in any respect to the fulfilment of the public service remit. There was extensive discussion when the 2003 Act was before Parliament on the correct bar for intervention in this regard.
The Government recognises that the Bill amends the remits of the licensed public service channels, but is not persuaded that it follows that the bar in section 270 should be lowered.
In particular, it is important to note that Ofcom’s enforcement powers under section 270 form just one part of their much larger regulatory toolkit. For example, a PSB struggling to meet its remit is likely to be in breach of one or more of the conditions of its licence. This can result in Ofcom imposing a financial penalty (as was the case in 2009 when Ofcom found 11 channel 3 licensees in breach of their regional productions quotas), or, in extreme cases, revoking the PSB’s licence. Depending on the severity of the breach, Ofcom may also choose to set out publicly any initial or emerging concerns, for example in the form of a letter, as it has done on several occasions in relation to Channel 4.
In addition, while the Government agrees with Ofcom that the “serious” test represents a “relatively high” bar for intervention,2 the difficulty for Ofcom to satisfy this test has sometimes in our view been overstated. There are many reasons why Ofcom might form the opinion that the failure of the provider is serious. For example, Ofcom might consider a failure to be more serious if it is likely (absent regulatory intervention) to be repeated, or a failure of a general kind more serious than one arising from particular circumstances.
While the Government therefore agrees with the principle that Ofcom should be willing to actively intervene to protect the PSB system, we are of the view that Ofcom has the appropriate tools to do that already.
Recommendation six: We recommend that the Government amend the Media Bill to close the loophole allowing an unregulated streaming service to buy the rights for a listed event and put them behind a paywall.
The Government shares the Committee’s concern regarding this potential loophole. In light of the Committee’s recommendation and further input from stakeholders, we have amended the Bill to allow Ofcom to draw up a list of ‘relevant services’ for the regime to capture streaming services not covered under the definition of an internet programme service. This will close the loophole and ensure that rights for Category A events continue to be offered on fair and reasonable terms to qualifying services. The Government thanks the Committee for highlighting this issue.
Recommendation seven: We recommend that the Government includes provisions in the Bill to enable digital rights to be included in the Listed Events regime without the need for further primary legislation.
The Government is considering this issue and we plan to set out more detail in due course. Above all, it is important that we maintain the right balance between access for audiences, and the commercial freedoms that allow rightsholders to reinvest in their sport at all levels. This is a complex issue and it’s important we get it right. We are therefore still considering the best way of addressing it.
Recommendation eight: We recommend that the descriptor for prominence is changed from “appropriate” to “significant”.
The Government agrees with the Committee on the importance of ensuring that public service content is easily accessible on smart TVs, set-top boxes and streaming sticks. We thank the Committee for their work on this issue over a number of years.
In addition to that core aim of securing prominence for PSB services and content online, the regime must also be flexible, operable and proportionate to allow for design innovation and consumer choice.
Since publication of the draft Bill earlier this year, the Government has looked carefully at whether requiring “significant” prominence would be preferable to requiring “appropriate” prominence, and has met with a wide range of stakeholders on both sides of the debate to interrogate this issue.
In its report, the Committee notes that “interfaces on smart TVs, streaming sticks and set-top boxes are very different to Electronic Programming Guides”. The Government agrees, and it is for precisely that reason that we think the word “appropriate”, with further detail to be set out in a Code of Practice (consulted on by Ofcom), strikes the right balance between ensuring public service content is easy to find, and providing flexibility across different user interfaces. By contrast, requiring “significant” prominence (even when such prominence may be inappropriate) raises clear operability concerns. It would be at odds with the existing linear prominence regime (which refers to “appropriate” prominence3) and too inflexible, for example, to account for regional variation, which the Committee rightly notes elsewhere in its report is crucial for STV and S4C. Ofcom, who will be enforcing the new prominence framework, told the Committee that “appropriate” works well from an enforcement perspective, and aligns with their approach to enforcement under the existing linear EPG prominence regime.4
The Government also notes that there is not necessarily a consensus on this issue amongst the PSBs. ITV in their written evidence questioned if there is a difference between them since “significant prominence could be appropriate and appropriate prominence could be significant”.5 This highlights the complexity of this issue.
The Government has therefore decided not to change from “appropriate” to “significant”. We have however taken the opportunity to provide additional clarity around the agreement objectives (recommendation eleven, below) to ensure both PSBs and TV platforms are able to negotiate effectively and reach appropriate arrangements which look to support the sustainability of PSB.
Recommendation nine: We recommend that the Bill should allow Ofcom to de-designate legacy devices so that they are no longer subject to the provisions on prominence.
A key objective of the new online prominence regime is to approach regulation proportionately and flexibly to ensure it is adaptable for the future.
The draft Bill as published in March included provisions to allow the Secretary of State to designate and de-designate television selection services, following advice from Ofcom. However, the Government accepts the need for further assurances in relation to legacy devices (older devices which are no longer sold and/or supported by providers). It is not our intention to impose duties on either PSBs or platforms that cannot feasibly fulfil them.
Changes have therefore been made to the Bill to ensure that technical functionality and duration on the market can be considered as part of the designation and de-designation processes.
Recommendation ten: We recommend that the affirmative procedure should be used when the Secretary of State designates or specifies a description of regulated television selection services.
While the Government recognises the need for parliamentary scrutiny of secondary legislation, we do not agree that the affirmative procedure would be appropriate here.
As set out in the Government’s written evidence to the Committee and in the Delegated Powers Memorandum published alongside the Bill, this power does not amend primary legislation, but specifies what television selection services will be considered in scope of the new prominence framework. Furthermore, the Secretary of State cannot make any designations until they have received advice from Ofcom, which the Government expects Ofcom will consult providers on.
We also expect Ofcom will consider practicality and proportionality to be part of that assessment. This will provide the necessary evidence required to inform any designations (or ‘de-designations’) made by the Secretary of State and will ensure these measures remain proportionate.
Recommendation eleven: We recommend that the Government should examine the principles on which existing successful carriage deals have been negotiated and use this to improve the drafting of this provision in the legislation.
The Government’s overall objective is to encourage healthy and effective commercial negotiations between PSBs and platforms, independent from Government, where both parties are able to explore mutually beneficial arrangements. To support these negotiations, and provide some additional legislative direction to Ofcom, the Bill provides “agreement objectives” setting out expectations for the sorts of deals the Government wants to see reached.
However, it is important these objectives are not overly prescriptive, to allow the commercial freedom for mutually beneficial deals to be reached between PSBs and platforms and to give sufficient flexibility for any commercial or regulatory changes.
The Government has heard stakeholder concerns and carefully considered the Committee’s recommendation, which we accept. As a result, the Bill has been amended to clarify the drafting of the specific agreement objective relating to PSB sustainability to better reflect how deals are made. In particular we have removed the word “cost” from the drafting which stakeholders agreed could create challenges for both PSBs and platforms. The objectives aim to ensure any commercial arrangement reached between a PSB and platform does not impact the PSB’s ability to fulfil its remit or the continued provision of PSB content. It also looks to ensure that arrangements do not disproportionately restrict how the platform may innovate in the ways it provides its service. We believe the new drafting delivers these twin goals.
We have also expanded the accompanying explanatory notes, following stakeholder feedback, to provide further clarity around the intention of this objective and to reflect—where helpful—current market practice. For example, we know that in some cases a zero net fee arrangement (which is currently agreed industry practice in the linear space) may be deemed an appropriate outcome for both PSBs and platforms under this new regime. We now clarify in the explanatory notes that such an outcome would be compatible with this agreement objective. Equally, parties would be able to agree alternative arrangements consistent with these objectives if a zero net fee arrangement was deemed inappropriate.
Ofcom is also required to develop guidance to support these agreement objectives and the deals being negotiated. Ofcom’s guidance will provide further detail around what are considered “appropriate” terms and they will be required to consult on this guidance. Therefore, there will be a further opportunity for PSBs and platforms to input their views/concerns and shape this guidance after Royal Assent.
Channel 4 Corporation
Recommendation twelve: We recommend that the Government should review the wording of the sustainability duty to ensure that it is compatible with C4C’s existing obligations.
The Government has worked closely with Channel 4 on the drafting of the sustainability duty. Working with Channel 4, we have made revisions to the duty to ensure it is compatible with C4C’s existing statutory obligations.
Recommendation thirteen: We recommend that, on introduction of the Bill, the Government should publish a policy statement setting its intended monitoring and mitigations for any harm to the wider production sector from the changes to Channel 4’s model.
The Government has been consistent in its aim to support Channel 4’s long term sustainability alongside measures to protect the wider production ecosystem, which is a British success story.
[On 8 November] the Government announced a package of mitigations to accompany the removal of Channel 4’s publisher-broadcaster restriction. We worked closely with the television production sector on the mitigations, including through a Call for Input, which will safeguard Channel 4’s important role driving investment into the sector in the event they choose to start a production business. This will include increasing Channel 4’s independent production quota from 25% to 35% of qualifying programmes, and new measures to ensure fair and open access to Channel 4’s commissions with oversight from Ofcom.
We have also published, alongside introduction of the Bill, an assessment of impact which provides further detail of the package of mitigations that we have announced, as well as our plan for monitoring the impact of these changes on the sector moving forward. This will include a requirement for Ofcom to review the impact of Channel 4 starting a production business, should they choose to do so, on the fulfilment of the public service remit for television, as part of one of their five-yearly reviews of the UK’s PSB system.
The Committee’s conclusion on the measures relating specifically to S4C are welcome. We were pleased to note that the Committee did not have any specific recommendations or suggested amendments to these measures. The Government has worked closely with S4C to draft these measures, which will help the UK’s only dedicated Welsh-language broadcaster adapt to the changing media landscape and remain relevant for the future. The measures on regional prominence will also help maximise S4C’s contribution to the Welsh Government’s ambition to reach one million Welsh speakers by 2050, which the UK Government is committed to supporting.
Recommendation fourteen: We recommend that, in the same way that the Broadcasting Code applies to all broadcasters, the Video-on-Demand Code applies to all Video-on-Demand services.
Recommendation sixteen: We recommend, should the Government proceed with its tiered approach, it should be required to lay before Parliament a list of services to be designated no fewer than 5 sitting days before the statutory designation is made.
The Government remains of the view that the approach set out in the draft Media Bill will ensure that mainstream video-on-demand services, who target and profit from UK audiences, are subject to similar rules to TV broadcasters, while also remaining proportionate. A decision on which services, or thresholds that will be used, will be made following a review of the video-on-demand market by Ofcom.
Regulatory change must be proportionate and practical. A huge number of video-on-demand services notified to Ofcom simply do not provide TV-like content or are not widely accessible. Extensive public and industry consultation have produced evidence to show that applying the Video-on-demand Code to the smallest niche services, such as a football team’s video-on-demand service, could unfairly and unnecessarily penalise them, with little or no benefit to overall audience protection.
Smaller, lower risk UK on-demand services will continue to be regulated under existing On-Demand Programme Service (ODPS) rules which cover specific harms like hate speech and some younger audience protections. Importantly, the Bill has been designed to ensure that smaller services can be placed into Tier 1 if evidence were to emerge of potential harm.
Given that the Government intends to continue with the tiered approach, we accept the Committee’s recommendation on laying a list of services before Parliament no fewer than 5 sitting days before the statutory designation is made. This will be in addition to the existing commitment in new section 368HB to make public that information before making regulations.
Recommendation fifteen: We recommend that the Government should monitor the extent to which the fairness and privacy code is requiring Ofcom to manage complaints from abroad and resource it accordingly.
The Government has worked closely with Ofcom throughout the drafting process to ensure it is well placed to deliver these additional regulatory responsibilities. We will continue to work closely with Ofcom once the Media Bill has been given Royal Assent, and the regulator moves into the implementation phase. Ofcom’s resourcing is a matter for the Ofcom Board. The Bill provides Ofcom with the necessary powers to levy appropriate fees and charges on industry to cover the cost of its regulatory activity, as is the case now for its other regulatory functions.
Recommendation seventeen: We recommend that the Government prioritise the Media Bill in the upcoming fourth session of this Parliament.
The Government is pleased to be responding to the Committee alongside introduction of the Bill. We look forward to engaging with parliamentarians as the Bill moves through passage, to ensure that it delivers the right outcomes for audiences and listeners.
Recommendation one: We recommend the Government provide Ofcom with clearer guidance regarding enforcement of the obligation on local radio to provide locally-gathered news. This guidance should either be included on the face of the Bill, or published alongside the introduction of the Bill to ensure Parliament is able to scrutinise it appropriately.
The Government accepts the principle that the definition and enforcement of the obligations on local radio to provide locally-gathered news could be clearer. We have therefore made some technical changes to the Bill to do so. The Explanatory Notes have also been updated to reflect that additional clarity now on the face of the Bill.
Given those changes, the Government does not intend to publish further guidance on these provisions at this stage. The Government has worked closely with Ofcom on the drafting of these provisions and, as the independent regulator, Ofcom is best placed to monitor and draw up additional guidance on this issue.
Recommendation two: We recommend that the proposed power to make regulations regarding localness requirements is amended to require consultation with Ofcom.
The Government agrees with the Committee’s recommendation and has amended the Bill accordingly. The Committee correctly points out that this was the Government’s intention in the draft Media Bill, however, accepting this recommendation adds welcome further clarity.
Recommendation three: We recommend that the Bill should specify those Acts of Parliament which would be subject to this power.
The Government has amended the Bill to make clear that the power to amend other legislation must be consequential to the main power and to ensure consistency with other similar provisions in the Bill. The Government considers going any further would create unhelpful inflexibility. In the event we exercise the power to make regulations under new section 315A(1), we may need to make consequential amendments to other primary and secondary legislation. But at this stage, it is not feasible to produce a list of all the primary and secondary legislation we may need to amend.
Recommendation four: We strongly support the inclusion of provisions on radio in the Media Bill, and recommend the Government includes the Bill, with these measures in the legislative programme for the next session of this Parliament.
The Government welcomes the Committee’s view. We, like the Committee, strongly support UK radio. Radio remains a strong, trusted medium in the UK, delivering significant public value; 88 percent of the population (aged 15+) tunes in every week.6 We also recognise the mutually beneficial partnerships between radio and new platforms through which listeners can access radio. We want to see that continue. Smart speaker listening now represents 14 percent of radio listening, up from zero in 2016 (when the first of these devices entered the UK market).7 These provisions are about updating the regulatory framework as listening habits continue to shift rapidly, ultimately to secure the future of those mutually beneficial arrangements.
Recommendation five: We urge the Government to pursue its technical engagement with stakeholders with the utmost urgency and to provide an update on progress to us when the House returns in September.
The Government has engaged stakeholders on the policy and technical detail throughout the process of developing its understanding of this area and drafting these measures. The Digital Radio and Audio Review provided an opportunity for both the radio industry and the tech sector to identify and discuss the key issues relating to the growth of online listening, and at draft publication, the department had significant technical engagement with the platforms, with stakeholders being given the opportunity to consider and discuss drafting suggestions. DCMS Ministers and officials have continued engagement with stakeholders since publication of the draft Bill. Changes were made in response to concerns raised by tech platforms to make the provisions work better in practice (see for example the response below to recommendation 13 of the Committee’s Interim Report).
The Committee may wish to note that a full Regulatory Impact Assessment on Part 6 of the Bill has been published, and has been rated fit-for-purpose by the independent Regulatory Policy Committee (RPC).
Recommendation six: Noting the Government’s current position that in-car infotainment systems should not be included within the scope of the Bill, we recommend that the Government and Ofcom should proactively keep this issue under close review.
The Government is alive to the potential threats and opportunities that come with changing listening habits and evolving technology, and recognises that the car in particular has historically been an important environment for radio. The Government therefore welcomes this recommendation and will keep this issue under review.
Recommendation seven: We recommend the Government redraft the Secretary of State’s power to amend the definition of a radio selection service to require the Secretary of State to consult Ofcom before issuing regulations.
The Government agrees with the Committee’s recommendation and has amended the Bill accordingly.
Recommendation eight: We recommend the Bill be amended to enable Ofcom to de-designate legacy devices so that they are no longer subject to the provisions.
We welcome the Committee’s feedback in relation to this issue. The provisions contained within this Part of the Bill are device-neutral (in contrast to those relating to online television prominence), and intended to apply to the voice-activated services which process the responses to listener commands wherever those services may be found. However, the Government recognises that there may be situations where de-designation of a service is required (i.e. where a significant number of users no longer access radio from it), and the Bill has been amended to include a specific process for an RSS to apply for de-designation.
Recommendation nine: We recommend regulations that designate and specify descriptions of radio selection services are subject to the affirmative procedure.
The Committee will note that since publication of the draft Media Bill in March, the Bill no longer includes provisions enabling designation via description. Instead, the new provisions limit this to specific designation.
The Government does not, however, agree that the affirmative procedure would be proportionate here. Parliament will set the framework for designation through the passage of the Bill. Advice on which services and platforms meet the definitions set out in the framework will be a matter for Ofcom. The designation itself is therefore a largely administrative step.
Recommendation ten: We recommend that consultation with Ofcom and industry stakeholders prior to the Secretary of State exerting the powers provided in the draft Media Bill to make secondary legislation on the designation of radio selection services be made a prima facie statutory requirement in the Media Bill.
As stated in the Committee’s report, it was always the intention of the Government to consult Ofcom on the designation of radio selection services. The Government has therefore accepted this recommendation and amended the Bill. We thank the Committee for suggesting this clarification.
Recommendation eleven: We recommend the Government amend the Bill to include on-demand and online-only content from Ofcom-regulated broadcasters.
The Government recognises the views of broadcasters on this issue, but does not agree that there is a policy case for intervention here. The measures in this Part of the Bill are being put in place to protect the collective public value of the live content provided by the BBC and licensed commercial and community radio stations - as underpinned by the regulatory framework within which those stations operate.
We acknowledge that the radio market is evolving. The Bill will retain the flexibility to adapt to that evolution as the evidence base grows as to the dynamics of the on-demand market and the manner in which the public value brought by on-demand content is secured. At this stage, however, and in view of the fact that live radio still represents the main way in which content produced by stations is consumed by listeners, these measures represent a targeted and proportionate intervention.
Recommendation twelve: We recommend that the Bill include an explicit power to amend the definition of an internet radio service. This would enable the current definition, which specifies that only stations providing online live simulcasts of their broadcast radio service and which make “reasonable efforts” to use the same advertisements, to be amended in the future to include other types of content. Such a power should require that any amendment by the Secretary of State is preceded by a report from Ofcom and be subject to the affirmative procedure, requiring it to be actively approved by both Houses of Parliament.
The Government welcomes this recommendation and has amended the Bill to include an explicit power to amend the definition of an internet radio service. Exercising the power will require a report from Ofcom and be subject to the affirmative procedure, as the Committee recommends. We thank the Committee for this suggestion which will further future-proof the Bill.
Recommendation thirteen: Ofcom should consider the resource implications of providing preferred routes when recommending the threshold at which radio selection services should be designated. The Government should take account of this recommendation in its decision on designation.
The Government understands the Committee’s concerns here, and has listened carefully to similar concerns raised by some stakeholders. We continue to think that enabling access to all licensed UK stations will not result in a disproportionate burden on platforms. Smart speaker platforms, for example, already facilitate routes for UK radio stations to reach listeners which, in the Government’s view, are compatible with the provisions in this Bill. As such, the measures are largely intended to reflect and secure the current situation on those platforms which are likely to fall within scope. Furthermore, very complex, bespoke routes can impose costs on radio stations as well as platforms. We do not agree, therefore, that a plausible outcome of these provisions will be disproportionate demands on platforms.
However, the Government does recognise that the platforms have expressed concerns with the current drafting. As a result, without undermining the core principle that UK stations may specify a “default route” to the listener, the Bill has been amended to make it clear that a station’s request for a particular route must be reasonable. That test will provide additional assurances to platforms on the ways in which UK stations may request a particular default route.