Joint Committee on The Draft Communications Bill Minutes of Evidence

Examination of Witnesses (Questions 828-839)




  828. I delight in declaring an interest as being an honorary member of your organisation.

  (Mr Darlington) I am tempted to do a card check to see if anybody else is!

Brian White

  829. One of the thing I have struggled with throughout the bill is the relationship between OFCOM and the Secretary of State and the different powers they have. How comfortable are you with this balance between what the Secretary of State is going to do and what OFCOM is going to do?
  (Mr Darlington) May I say I am delighted to be back before the Committee, having previously given evidence on behalf of the Internet Watch Foundation. On the last occasion I was tempted to quote Arnold Schwarznegger and say, "I'll be back" but I know that the cultural interests of the members of this Committee are much higher than that. The comment we would like to make in respect of that question I think strikes at the very heart of the notion of independent regulation. Certainly as a union we have had a lot of experience of so-called independent regulation. We have been dealing with Oftel since 1984 and that is one of the public bodies which is going to go into OFCOM, and more latterly we have dealt with POSTCOM. Our view, which is shared by a growing number of people, not least the politicians, is that so-called independent regulation has become just too independent and it is not good enough for the Government and Parliament to create a piece of legislation, appoint usually one person—but now we are moving towards a commission of very distinguished people—and then sit back and say that something as fundamental to the future of broadcasting and the future of telecommunications is essentially a matter for them. There obviously is a balance to be struck. We do not believe that it is appropriate for the Secretary of State to choose who should be given licenses and to monitor compliance with licensed conditions, but we do think that the Secretary of State—or Secretaries of State, plural, in the case of OFCOM—ought to, on behalf of government, periodically make a statement of what the strategic objectives of the regulator should be and then the regulator exercises the powers under the statute consistent with those broad policy objectives and the extent to which they do that of course is monitored by Parliament in the appropriate way. We think that is a different kind of balance, a better balance, one which captures a response to the growing concern that regulators have become essentially a power unto themselves.

  830. You are actually talking about the relationship there between the regulator and government. What do you think the relationship between the regulator and Parliament should be?
  (Mr Darlington) Government is itself, of course, accountable to Parliament. If government sets out every year or every three years of every parliament these broad strategic objectives, they would be published and government could debate them, and when the appropriate regulator, in this case OFCOM, is reporting to the appropriate body, either the Select Committee on Trade and Industry or the Select Committee on Culture, Media and Sport, or it might be a new select committee, that select committee will obviously look at the strategic objectives, look at the decision of the regulator and see to what extent the regulator had been able to meet those objectives. Ultimately, government and regulator would both be accountable to Parliament.

  831. Do you think that the different clauses of the bill actually give effect to that or are there specific changes that you would like to see in the bill?
  (Mr Darlington) As we see it, the Secretary of State essentially makes the appointments to OFCOM, sits back and forgets about OFCOM for whatever it is, five years, the duration of the terms of the commissioners. As regards the public accounting, Secretaries of State do not express a view. Parliament decides how often and in what form they are going to meet the regulator. Our experience has been that that is a very inadequate control mechanism. Oftel goes to the Select Committee on Trade and Industry about once a year and it depends on the mood of the select committee and how much time there is as to how stringent the questioning is. We would like to see more accountability to parliament of regulators as a whole, which would require more time and more expertise, and perhaps even the creation of a specific select committee governing regulators.

Lord McNally

  832. As a point of interest, I was at the bankers dinner for the Chancellor of the Exchequer last night and in ringing tones he assured his audience that it was the policy of the Government to get politicians out of regulation and this seems to be absolutely contrary to what you are advising us and the direction the Government is going.
  (Mr Darlington) It is difficult for me to challenge Gordon Brown, but one of Gordon Brown's other objectives is to make this country the most competitive in the world in terms of e-commerce and another of his objectives is to make broadband availability in this country amongst the best in the G7 by 2005. Now, are we saying that OFCOM has no role in the development of those government objectives? In a sense, I think the Government is. If I am allowed to quote from the policy document, the Government's policy on broadband is relegated to an annex and in that annex it states, "This comprehensive strategy does not require any legislation in order to achieve its objectives. As a result we are not looking to the bill to help deliver our strategy." In our view, issues as big as the competitive position of this country internationally, the availability of broadband, the development of e-commerce are issues where a body with the authority and the power of OFCOM has a role to play. But that should be consistent with government policy and government policy should be stated in a transparent way, so that government is not dictating to the regulator but setting the broad strategic objectives in the hope and expectation that the individual decisions will be consistent with those objectives.

  Paul Farrelly: I suppose at this stage I should declare an interest. The Communication Workers Union has long been a strong financial supporter of my constituency Labour Party. In fact the association goes back to my predecessor John Golding, who is the former political officer of the Post Office Engineering Union in the days when BT made its own telephones. Acting Chairman, you might allow me a shameless plug for a great parliamentary tale of the past. John Golding holds the record for the longest ever speech in parliament: 11 and a quarter hours, off-the-cuff, to a single amendment—

  Anne Picking: A record might be achieved for the length of your question!

Paul Farrelly

  833.—in committee, which stopped privatisation of British Telecom until after the 1983 election—much good did it do us, but some of us, in the darkest days of the Lady in the picture, still lived in hope. I have a question which has absolutely nothing to do with that. There has been a lot of controversy and discussion of parliament proposals to relax the rules on media ownership. I think this is primarily a question for Equity and BECTU: In general, what effect do you expect the proposals to relaxing media ownership to have on your members?
  (Mr Lennon) If I could deal with that one to start with. We are particularly concerned about change in ownership structures which might be allowed for Channels 3 and 5. Many people in the industry ae predicting that the relaxations proposed will almost inevitably bring large global media players into the UK market, and, in the context of OFCOM, we suspect that this is going to put the regulator up against tough commercial operators, who, unlike many British broadcasters, do not even see the legitimacy of content regulation in media markets and, given their economic scale, this is going to cause very different contexts between the broadcasters and the regulators from those that we have seen in the past. On Channel 3 specifically, obviously the regional nature of Channel 3 is of crucial importance to people, particularly those living outside London, and there are dangers if a single owner, even if it is a European single owner, is allowed to take over Channel 3 as one entity. Our position on that is that we would expect the regulator to be interventionist in the extreme if that kind of ownership change occurred in Channel 3 and place the most stringent requirements for the continuation of regional broadcasting and regional production. In the world of radio, which is also covered in the bill, the prospect of the national radio ownership model being changed to allow cross-ownership and concentration of ownership, we fear could lead to the kind of degradation of regional service that we have seen in independent local radio, where, for example, large chains have been built up in that sector. We have seen news rooms closed down and stations being fed with centralised news services (which come from hundreds of miles away in some cases) and, if you scale that up to the sort of problems that could occur if you had national radio stations owned by newspapers, it could take a lot of the equality out of what exists there at the moment in the independent national radio network. So, overall, we are very concerned about the easing of ownership regulations that is proposed in the new bill.
  (Mr McGarry) If I could follow up on that, as far as I know there are no members of Equity on the Committee—although possibly some potential members. We certainly do not sponsor anybody and I will try to keep my answer to less than 11 hours! We are concerned with a lot of what Tony just said. If I could concentrate specifically on the suggestion of the easing of regulations on non-European ownership. I think that needs a great deal of thought. I have not yet heard a convincing argument why that should happen, particularly in the situation where it is not likely to be reciprocated in any event. I think that would impose particular difficulties if an American owner, for example, were to buy a channel in this country. They would come here with a library of American material, which would be available to them almost without cost, which I think they would be tempted to show almost exclusively on such a channel. That, coupled with lighter touch regulation, the combination of non-European ownership and lighter touch regulation, seems to me to lead to a conclusion that it would more likely damage what we currently look for in our broadcasters, which is a range and quality of programming, and I do not see how it would improve that situation. So I am entirely unconvinced at this stage of that proposition.

  834. The bill gives the Secretary of State quite wide-ranging powers through secondary legislation to change the ownership provisions which are in there.
  (Mr McGarry) Yes.

  835. In the case of particularly radio there are no provisions in there at the moment on primary legislation that will give effect to the three voices of all the safeguards that the Secretary of State talked about which has led to some people being concerned that as the process goes on the best of interests will get to work and what emerges at the end of the day only faintly resembles what was originally indicated. To what extent do you think that (a) changes to these very sensitive areas should b e made by primary legislation only and (b) that the safeguards we have talked about for, particularly, radio should be on the face of the bill and not left afterwards to order?
  (Mr Lennon) If you are inviting us to say that as much as possible ought to be in primary legislation, I think we are agreeing with you. Even in the current regulatory framework, the most confident regulator, given the option to dilute their ownership controls in the face of what appear to be strong economic arguments, will tend to give in, and the creeping consolidations of independent local radio in this country and Channel 3 has happened more or less with the full blessing of the ITC, on the grounds that if they do not give way on the moral restrictions that ought to be there then there will be an economic threat to that part of the industry. So, yes, we would like to see as much as possible on both the TV side and radio side in the primary legislation.

  Paul Farrelly: To quote Lord Crickhowell's catch phrase, "to return to the bill," assuming the Government do not change their mind, were we to propose some changes, or the great David Puttenham could not drive his chariots of fire through—

Lord McNally

  836. I think he is auditioning, by the way!
  (Mr McGarry) He will have to try harder!

Paul Farrelly

  837. Assuming that is the mind set and it is set in stone, are there any realistic safeguards which could be built into the bill on which you can agree?
  (Mr McGarry) We have tried in our submission to deal with that situation whereas if the ownership regulations are relaxed, especially in relation to television, leaving radio separately, and we do think that in those circumstances, if a foreign owner of a television public service broadcasts television station in this country comes into being then I think the OFCOM should have the power to impose specific obligations upon such a new owner of such a channel. I think that would be more akin to the kind of regulations which exists now that the lighter touch which appears to be generally the proposal of the bill itself.

Lord Crickhowell

  838. Can I follow that up. Clearly, OFCOM has the power to regulate on the basis of the existing licences, does it not?
  (Mr McGarry) Yes.

  839. You are going further than that, are you, and saying that beyond the existing obligations, which will remain even if the ownership is foreign, and therefore can be enforced, you want an even wider power of some kind?
  (Mr McGarry) I am not a parliamentary draftsman, so I am not sure about the answer to that.

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