CHAPTER 5: CONTENT REGULATION |
(i) The scope of the
284. The main aims of Part 3 of the draft Bill are
to reform the arrangements for licensing broadcasters under the
Broadcasting Acts of 1990 and 1996 and to create a new framework
for the regulation of those licensed broadcasters. There are to
be three tiers of regulation: "tier one" regulatory
obligations, relating particularly but not exclusively to programme
standards, apply to all licensed broadcasters; "tier two"
establishes the quantifiable elements of regulation to which all
public service television broadcasters are subject; "tier
three" relates to qualitative regulation of public service
285. A key determinant of the impact and effectiveness
of "tier one" regulation will be the scope of the licensed
sector to which such regulation applies. Changes in technology,
and in particular the use of different networks for the transmission
of similar content characterised as convergence, pose problems
in defining the licensed sector.
286. The Government's policy since the Communications
White Paper has been that Internet content should be excluded
from the licensed sector. There are seen to be several reasons
for such an approach: first, the Internet is subject to the general
law, based on the principle that what is illegal off-line is illegal
on-line; second, the Internet has evolved with a tradition of
self-regulation in the absence of spectrum scarcity; third, Internet
content is generally "pulled" by the user, rather than
"pushed" by the provider; fourth, Internet provision
is inherently international in character and therefore not readily
susceptible to enforceable national regulation in a free society.
287. The draft Bill seeks to deliver this policy
by a new definition of what is termed a "television licensable
content service" in Clauses 154 and 155 and a comparable
definition of a "radio licensable content service" in
Clauses 170 and 171.
These definitions are structured around a broad formulation encompassing
the broadcasting of any service by satellite or the distribution
of any service by means of an electronic communications network.
The term "service" is also broadly defined to include
television or radio programmes, and, in the case of television,
electronic programme guides and "relevant ancillary services",
a term including services which relate to the promotion or listing
of television programmes. The sweeping effect of this definition
is then mitigated by a series of exclusions, the most important
of which are as follows:
- a two-way service, essentially defined as one
in which the user has a transmission capacity not solely related
to the content service;
- a service for use within a single set of premises;
- a service provided solely for business use, such
as by bookmakers or stockbrokers;
- a service that is not "available for reception
by the general public" because it meets three conditions,
namely that it is subject to a selection procedure by users of
that content, is only conveyed in response to such selection and
that the process of selection is not confined to choosing to receive
material "available for broadcasting or distribution simultaneously,
or virtually so".
288. Patricia Hewitt told us that she thought these
definitions succeeded in excluding Internet content, including
Jowell gave a contemporary example to illustrate this view: she
told us that a live web-cast of Big Brother on the Internet
would not be licensable content; transmission on E4 would be licensable
content subject to "tier one" regulation; edited programmes
on Channel 4 would be subject to public service television broadcasting
will become apparent when we consider the evidence we received
on this matter later, this contention of the Ministers is open
to question. To use the example given by Tessa Jowell, the status
of Channel 4 and E4 transmissions is clear, but the exclusion
of a web-cast of Big Brother from the scope of the licensable
sector as proposed to be defined in Clauses 154, 155 and Clause
238 is far less clear and, in fact, a matter of some uncertainty.
289. As an additional safeguard, the Government proposes
to take a power, under Clauses 156 and 172, to amend by secondary
legislation subject to affirmative resolution procedure the definitions
described. Patricia Hewitt saw this power as important as a means
of ensuring that the definition could adapt to reflect changes
In exercising this power, the Secretary of State will be enjoined
to have regard to factors relating to public expectations, filtering
and other technological developments and cost implications. The
ITC viewed Clause 156 as "one of the few places in the Bill
where it is unequivocally good sense to have an order-making power".
290. In the Policy document accompanying the draft
Bill the Government has served notice that it is already minded
to exercise the power under Clause 156. The definition as it stands,
in the Government's view, excludes video-on-demand services. The
Government has stated that it wishes to receive industry-wide
assurance by this autumn that providers of video-on-demand services
will put in place and maintain adequate means of protecting children,
incorporating a binding code. In the absence of such an assurance,
ideally in the form of self-regulation that would achieve accreditation,
the Government might use the power under Clause 156 to extend
licensing requirements to video-on-demand services.
291. While there was a broad welcome for the Government's
commitment in principle to exclude Internet content from licensing,
there was considerable discussion as to whether the draft Bill
in its present form would deliver that commitment in practice.
It was argued that, under the proposed definitions, web-casting
and web pages providing TV listings might be covered.
In particular, it was suggested that the conditions to be met
for exclusion from the definition of availability to the general
public in Clause 238 might not have the effect of excluding a
292. Concern was also expressed about the power to
amend definitions to be granted by Clause 156. It was argued that
there was no justification for licensing video-on-demand services,
which are fundamentally no different from a viewer's decision
to rent a video in a store.
It was suggested that any amended definition designed to encompass
video-on-demand might also encompass web-based services.
There were calls for a requirement to be placed on the Secretary
of State to consult widely before exercising the power to amend,
to ensure that any change did not have unforeseen consequences.
293. There are various ways in which the concerns
of the Internet sector about an essentially unintended inclusion
of Internet content within the scope of licensing might be met.
One, suggested by Microsoft, would be a broadening of the definition
of excluded two-way services.
A second approach would be to provide an explicit exclusion for
A third option, which attracted much support from Internet service
providers, would be to insert an exclusion mirroring the exemption
from legal liability for intermediary service providers under
Articles 12 to 14 of the E-commerce Directive. This gives service
providers immunity from legal liability in respect of transmission,
caching and hosting where the providers do not originate or modify
the content, adhere to self-regulatory best practice and are unaware
of any illegal activity.
294. Each of these approaches carries potential drawbacks.
Attempts to broaden the exclusions give rise to questions about
whether they also exclude non-Internet services that might be
intended to be subject to licensing requirements. A definition
of Internet content injects technological specificity into the
provisions and potentially poses a great many drafting problems
itself. The analogy
between legal liability and licensing is imprecise, since it is
not proposed that the content provider (who has legal liability)
be subject to licensing requirements.
295. We have considered two further options in addition
to those suggested by witnesses from the Internet sector. We canvass
these options in the knowledge that the difficulties in distinguishing
between Internet provision and what is now thought of as broadcasting
will increase in future.
296. One option would be to move from an essentially
compulsory system of licensing to one that is permissive. Under
the terms of section 13 of the Broadcasting Act 1990, as proposed
to be amended by Clause 157, all television licensable content
services would be subject to a requirement to obtain a licence.
OFCOM could be granted a power to designate certain categories
of licensable content service as exempt from the need for licensing;
in other words, the licensed sector would be a sub-set
of the licensable sector. This would essentially pass the
problem of determining the practical boundaries of licensing down
the line from primary legislation to OFCOM, ensuring that the
broad terms of an Act would not create a requirement for licensing
where it was not desirable or practical.
297. Another option would be to draw a clearer distinction
between services that are "pushed" by the broadcaster
and those that are "pulled" by the user and exclude
all of the latter from licensing. The draft Bill certainly moves
in this direction, but does not go as far as some advocate.
As more and more services move to being pulled services, the scope
of the licensed sector would diminish over time until it withered
away. The focus
then would lie on regulating content itself, rather than content
One way of achieving this would be to remove the third condition
to be met under Clause 238 in order for a service not to be deemed
available for reception by the general public: in other words,
provided that the service was conveyed only in response to selection,
it would be excluded regardless of whether or not conveyance in
response to such selection was simultaneous.
298. The Government has faced genuine problems in
defining the scope of the licensable sector, problems for which
we do not claim to have found definitive and satisfactory answers.
We are concerned at the Government's statement that it is already
minded to use its power to amend the key definitions to bring
video-on-demand within the scope of the licensed sector if satisfactory
arrangements for self-regulation are not made by autumn 2002.
If this is indeed the timetable, there would seem no logical reason
not to include any provision for video-on-demand in the initial
definition in primary legislation, allowing both Houses to give
full consideration to the rationale and consequences during passage
of that legislation. If the Government does decide that it
is appropriate to include video-on-demand services within the
scope of the licensed sector, we recommend that it propose to
do so by means of provision in the final Bill subject to full
parliamentary scrutiny, rather than by means of subsequent secondary
299. More generally, we support the powers for
the Secretary of State to amend the definitions of licensable
content services by means of secondary legislation subject to
affirmative resolution procedure as an important means of "future-proofing",
but remain to be convinced the Government should not go further
at this stage. In particular, we recommend that the Government
consider, and in its reply to this Report respond to, the cases
for removing the condition in Clause 238(5) and for granting OFCOM
discretion in choosing whether to license all services falling
within the definition of licensable content services.
543 HC (2000-01) 161-I, paras 112-116; Policy,
paras 3.2.2, 8.1 and 18.104.22.168; Ev 101, paras 10.4.2-10.4.3; Memorandum
submitted by Children's Charity for Internet Safety; QQ 198, 338,
379, 965. Back
Q 55. Back
Clauses 155(3) and (4) and 171(2) and (3). Back
Clauses 155(5) and (6) and 171(4) and (5). Back
Clauses 155(7) to (10) and 171(6) to (9); EN, para 279. Back
Clause 238. Back
Q 1007. Back
QQ 1007-1009. Back
Q 1006. Back
Ev 1-8. Back
Policy, paras 22.214.171.124-126.96.36.199. Back
Ev 102, para 10.6.2. Back
Ev 110. Back
Ev 557, paras 9-10; Q 376. Back
Q 354. Back
Ev 101, para 10.6.5; Ev 119; QQ 366-368. Back
Appendix 108. Back
Q 376. Back
Ev 102, para 10.7.1; Ev 88; Ev 136, Ev 119; Q 365; Directive 2000/31/EC
of the European Parliament and of the Council of 8 June 2000 on
certain legal aspects of information society services, in particular
electronic commerce, in the internal market, Articles 12 to 14. Back
Ev 136; Ev 145, para 9. Back
Ev 67; Q 379. Back
QQ 381, 402. Back
Q 197. Back
Policy, para 188.8.131.52. Back