Joint Committee on The Draft Communications Bill Appendices to the Minutes of Evidence


Memorandum submitted by the Rt Hon Chris Smith MP

  I am writing to make a personal submission to the Joint Committee, in relation to the provisions of the draft Communications Bill, which you are currently considering. As you will know, I was responsible as Secretary of State—jointly with my colleagues at DTE—for the publication of the White Paper in December 2000, and I note that the Draft Bill follows broadly the themes and proposals of that White Paper. In particular, the bringing-together of the disparate group of regulators in the telecommunications and broadcasting fields under the umbrella of OFCOM is very welcome—as a rationalising and modernising measure—and the development of an overall approach based on lighter-touch regulation makes economic and philosophical sense.

  There are, however, a number of points that I believe merit further consideration, and it is these I would like to concentrate on in this submission. In making them I would of course draw the Committee's attention to the interests I have declared in the Members' register, relating to Classic FM and to the Walt Disney Company Ltd.

  I hope that the Committee might consider the following:

  1.  Throughout the draft Bill reference is made to "customers" receiving telecoms and broadcasting services. This is surely infelicitous, and implies a purely commercial relationship. Can the reference be, insisted, to "consumers" or to "citizens"?

  2.  One of the great challenges of the next few years is going to be the development of broadband communication for households around the country. At present, although some 60 per cent of households are capable of receiving broadband, only about three per cent actively choose to do so. The economic and quality-of-life benefits that could be secured by far wider take-up are considerable. Would it be possible, therefore, to craft an additional duty for OFCOM, "to facilitate the availability and promote the take-up of broadband communications technology"?

  3.  One of the inevitable consequences of increasingly rapid and easy digital communication is the enhanced danger of piracy of creative material, especially in movies and music. The principal weapon against such piracy lies of course in the various copyright protection agreements and statutes—and the early implementation of the European Copyright Directive should help. But much can be done, also, by the use of digital technology itself—to include watermarks or digital "signatures" in creative material—in order to combat unauthorised use. To be effective, such efforts have to be based on commonly agreed standards, and I hope that you might consider giving OFCOM a power to lead a process of securing agreement on such standards. A power to co-regulate in order to secure common standards of protection for copyright creative material could, I hope, be considered as part of the functions of OFCOM.

  4.  The role of OFCOM in relation to the BBC does, I believe, the need further discussion. I have noted the role given to OFCOM under the first two tiers of regulation, on matters such as regional programming, independent and original productions, complaints, and news in peak time. I have noted also the slight movement now made by the Secretary of State in changing the BBC Agreement to include a requirement to consider OFCOM's overview reports on public service broadcasting. I still believe, however, that these provisions do not go far enough. I hope that the Joint Committee would consider placing the back-stop power to intervene in the event of a breach of the self-regulatory trust under the third tier in the hands of OFCOM, rather than the Secretary of State. The Board of Governors of the BBC would still be in charge of the management of the organisation, and the detailed implementation of its remit, in exactly the same way as now. The back-stop power however, would shift from the Secretary of State to OFCOM as an independent regulator; and I believe this would be a change to the benefit of the BBC itself, the Secretary of State, and the general public.

  5.  Under Clause 181 of the draft Bill, OFCOM is required to prepare its overview report on the whole of public service broadcasting every three years. A three-year gap is far too long. Can this please be made a more regular duty?

  6.  The proposed provisions for restricting radio ownership seem to be rather more strict than those pertaining to any of the other branches of the media. Is this entirely fair? I note that the formula adopeted is a "3 + 1" prescription. Could a "2 + 1" alternative be considered?

  7.  Much of the section of the Bill dealing with telephony follows closely the requirements of the telecoms directives. There is one issue, however, which the directives leave unsettle and therefore the Bill does too. Under the present terms of the Bill, the provision of pay-per-view services across the telephone wires counts as a one-to-one service, and is therefore completely removed from licensing requirements. The formula used to include other services under licensing requirements—that of the provision of "television-like" services—does not appear to apply to pay-per-view delivered by telephony. Is there any way in which they can be brought within the definition of "television-like" services?

  8.  Once it is established, OFCOM will become an extremely powerful body. It is therefore important that it is properly answerable to Parliament and the public for the decisions it makes and the way it goes about making them. I would be sensible, surely, to create a special joint sub-committee for Culture, Media and Sport, and Trade and Industry, specifically to monitor the work of OFCOM, to receive reports from it on recommended, by your Committee.

June 2002

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