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Lord Pearson of Rannoch: My Lords, I wonder whether my noble friend will give way since she has been good enough to mention something that I said. I certainly do not see the issues of race, gender and class as being necessarily subversive of our culture and I have the greatest respect for everyone of another race, including my noble friend. It is just the way these issues have been used in our education system that has been so damaging to our culture.

Baroness Flather: My Lords, I am sure that we are all the clearer for that. These issues are of great importance to some of us. As regards class, I am sure that there are many other noble Lords in this Chamber who are better qualified to comment on it. I only know that class is not something that one is born with: either one has it or one does not.

Perhaps I may declare an interest before I start. I am a non-executive director of Meridian Broadcasting, which is a regional television station, and I am also non-executive chairman of an independent local radio station. A great deal has been said today about regional television and most of it, I am pleased to say, has been complimentary. Therefore it is not my intention to speak fulsomely about regional television because I believe that we all understand the value of it.

Everyone knows that commercial television has a bottom line called responsibility to shareholders. I would like to give noble Lords some brief examples of what Meridian does in terms of supporting the local community and some of the issues which are of concern in the local community. I was very pleased last year to launch a booklet on racial harassment. It is extremely well produced, it is simple and easy to use. If any noble Lords are thinking of producing a booklet on a major issue and it needs to be translated into several languages, I commend to noble Lords this booklet as an example of how to do it. The languages are all together in one booklet, including English, and that helps a great deal because we know these days that people speak English and other languages and sometimes they need both to make sense of what they need to know.

The first print run ran out long since and we are now into a second print run. There was a rather wonderful letter from the Commission for Racial Equality and I cannot resist reading it to noble Lords. It says:

I make no apology for taking time to read that because, as noble Lords know, this issue is one of the closest to my heart.

There is a community liaison unit as well at Meridian which has three officers whose job it is to keep in touch with the local community and to act as a bridge on issues which are of concern. There is the Meridian Broadcasting Trust. There was also a trust when it was TVS. That trust was dependent on the telethon and with the demise of the telethon it was unable to survive in

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the same form. The trust now takes different kinds of themes to highlight each year. They are called the "Spotlight" programmes. If noble Lords are in the Meridian area I commend these programmes to them.

The first was a deaf awareness programme. The noble Lord, Lord Ashley, was one of those who took part in it. It was called "The Sound Barrier". It was extremely successful. It was followed by fact sheets, booklets etc. which were very well received. The second programme was for the blind and sight impaired and it was called "Seeing Things Differently". Again, that programme was supported by fact sheets and various booklets. The third programme related to carers and took place last year. The fourth one planned for this year is called "Independent Living", which follows naturally from the programme called "Carers".

It is important to see these things in the context of the service that the regional television stations provide. There are other companies apart from Meridian which have initiatives that are worthy of a quick mention. I am not familiar with the details, but I know that Granada's "Challenge" programme netted about £6.5 million in investment in the north-west. That is very creditable because it is an area greatly in need of investment. Carlton has supported educational initiatives all around London. Yorkshire, Tyne Tees and Grampian take great pride in contributing to the regional culture and in trying to produce programmes reflecting the life of their own areas. Grampian has also helped in the resurgence of Gaelic as a spoken language.

That brings me to something which one cannot avoid at this moment; namely, the thorny issue of Channel 4 and the levy it has to pay to Channel 3. We have heard a great deal about Channel 4 being a public service broadcaster and BBC1 and 2 also being public service broadcasters. All the terrestrial channels are public service broadcasters. Channel 3 is a public service broadcaster. If one reads all the regulations that apply one finds that they are extremely stringent and the companies have to comply with whatever they have promised to do in their licence.

All of these channels are public service broadcasters. Channel 4, on the contrary--and I speak now as a viewer and not as a director of Meridian--provides us with a great number of American programmes and a great number of repeats, probably more than any other television channel. Noble Lords often complain about the dubious content of many of its programmes. Suddenly today Channel 4 has been elevated to something quite amazing; namely, that it is the best channel and it provides public service programmes. It is not Channel 4 which has received the most awards but Channel 3. Channel 3 is viewed more than any other terrestrial channel in this country.

On top of that, Channel 3 pays corporation tax, as noble Lords would expect, and a very heavy levy to the Treasury. Channel 4 does not pay a levy to the Treasury and does not have shareholders to placate. It is very important to remember that when we are talking about the relevant importance of these two channels. Channel 3 has calculated that it has lost £258 million in revenue since Channel 4 came on stream.

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If the £50 million is not going to be paid to Channel 3, it will have to come from somewhere. Channel 3 will have to cut down and what will be cut will be what is expendable, which will include new programmes and community initiatives, and we do not want to see that. A level playing field will not be achieved by changing any single component in this complex formula. I am grateful to my noble friend the Minister for saying that the entire issue is going to be looked at in due course because, as other noble Lords have said, that is the only way forward. If we are to compete in the world market we need to have everything set out very carefully in this Act. It is worth remembering that there is indeed one service which is not a public service broadcaster and that is Sky. That should not be forgotten.

I have a little to say about radio because I am closely involved in local independent radio. I am grateful to my noble friend Lord Astor of Hever for mentioning Star FM. I know that his daughter enjoyed being with us and we enjoyed having her. I heard my noble friend Lord Dixon-Smith give as a reason for not having single local radio stations the fact that we had to compete with 24 local radio stations. That is not exactly correct. In different core areas one can receive up to 24 local radio stations. It is a very crowded area. I am talking about Slough, Windsor and Maidenhead. That one can receive these stations does not mean that it is not a core area for Star FM, which is protected. The Radio Authority sees to it that every radio station has a core area, but one cannot control the broadcast bands in such a way as to ensure that they do not move a few yards this way or a few yards that way.

Many points have been raised in this debate, including the question of ownership. I know that the Radio Authority would like to have the power to issue a code on that very difficult issue, mainly because the situation is likely to lead to litigation and long disputes. I hope that my noble friend the Minister will consider this as a matter of priority. The Radio Authority already has code-making powers in relation to the regulation of programming and advertising, so it would not be out of place for it to be able to issue a code on this matter. Perhaps in due course my noble friend will give us such an assurance. If not, I hope that other noble Lords will feel that it is worth supporting an amendment to that effect.

I have received a briefing note from a local newspaper organisation saying that local newspapers are frightened that national newspapers might buy up local radio stations. Independent local radio stations would not like to be owned by either local or national newspapers. We exist because there is diversity, and there would be no guarantee of diversity if we were owned by newspapers.

Finally, I refer to community radio. The idea that we should all have community radio sounds tremendously good, but I should like to draw to your Lordships' attention an amendment which the Community Radio Association would like to be brought forward. It defines community radio as:

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    "a service operated in a defined locality for the social and cultural benefit of the community, or a particular section of the community, by a non-profit distributing company or society whose membership is drawn from that locality or interest group".
Apart from the words "non-profit distributing company", that definition applies exactly to independent local radio. The CRA has described us. We see ourselves as community radio and as part of our local community. Indeed, that is part of our performance promise. We cannot depart from that.

Perhaps I may make another point for clarification. My noble friend Lord Dixon-Smith said that if two radio stations were owned by the same company they would probably be more likely to promise diversity than would two local radio stations operating separately in one area. I do not think that my noble friend can be familiar with the performance promise. He must not know how strictly the Radio Authority controls what each radio station may or may not provide in its locality.

I see that I have taken up a great deal of your Lordships' time. I hope that the House will consider local independent radio to be worthy of protection and allow it to have as good a future as in other countries.

8.13 p.m.

Lord Birkett: My Lords, I am sorry to take issue so swiftly with the noble Baroness, Lady Flather, but I do not think that the debate about Channel 4 has anything to do with whether it is the best channel, whether it is better than Channel 3 or the question of its relationship to the BBC. The reason that Channel 4 has been mentioned so often this evening, and in particular the fact that its present funding formula is out of date, is quite different. Many noble Lords referred to that funding formula. The noble Lord, Lord Blake, and the noble Earl, Lord Stockton, thought that it was unfair, unnecessary and totally out of date. I entirely agree. I shall not worry your Lordships by repeating their extremely cogent arguments on the subject, but perhaps I may add a third reason why I think that the formula should be terminated as soon as possible.

I refer to what Channel 4 might have done with the money if it had not had to contribute to ITV. Its own prediction is quite formidable--and it really does not matter whether this is exactly what Channel 4 would do in any given year. With the £57 million that Channel 4 paid to ITV last time round--that is, about a year ago--it would have been able to make 12 new films, four new drama series, three new comedy series, three new documentary series and about four major broadcasts from, say, Glyndebourne or the Royal Ballet or of any of this country's other subsidised art forms. I accept, of course, that Glyndebourne has never looked for a subsidy.

That list is pretty formidable, especially in the context of the film industry in this country which has not had much support over the past two or three decades. The noble Viscount, Lord Falkland, took me to task in our debate last week on the BBC Charter in which I praised the orchestras of the BBC but did not mention what it did for film. What Channel 4 has done for film is formidably useful to a film industry which receives very

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little support from elsewhere. When we think of all the things that Channel 4 might have done with that money, that is a powerful additional reason for altering or preferably cancelling the present system.

I refer again to broadcasts from, say, Glyndebourne, the Royal Ballet or English National Opera. I took a lot of notice of what the noble Viscount, Lord Chandos, said about subsidies. Every time a major broadcaster picks up the work of something that has been subsidised by the Arts Council, the audience expands to such a point that the subsidy, from having been very heavy, suddenly becomes worth while. It becomes a few pounds per member of the audience instead of many thousands. Increasing an audience by a quarter of a million people, half a million people or even a million people simply by broadcasting a performance must be of value to the Arts Council, particularly given its pathetic and unnecessary recent cuts. If that could happen as a result of Channel 4 not having to give ITV that £57 million, the sooner that system stops, the better.

After all, we are talking about public broadcasting. Although it is a little unfair to take issue with a noble Lord who is not in his place, I must take issue with my noble friend Lord Chalfont because I do not agree that the phrase "public service broadcasting" is a soundbite which has become an unnecessary cliche. I think that there is a better definition of the phrase than that given by my noble friend. I believe that it is not a matter of where the funding comes from initially; it is a question of what the objectives of that broadcasting organisation are. To me, a public service broadcasting organisation has as its primary aim and first priority the quality of the service that it provides for the public. It was the terror that the BBC might be diverted from such priorities that frightened everybody so much over the past few years which was, I believe, one of the reasons why your Lordships so welcomed the BBC's new Charter which we discussed last week.

If that definition of public service broadcasting is right, I believe that what Channel 4 might do if released from its burden is a serious argument for the Minister looking again at the formula and recommending to his right honourable and honourable friends in another place that the formula should not merely be altered but abolished.

8.18 p.m.

The Earl of Northesk: My Lords, as many of your Lordships will be aware, I lean towards being a technophile rather than a technophobe. As such, I can do no other than welcome the Bill most warmly. I have no wish to get bogged down in any exposition of the technology involved. My noble friend the Minister carried out that responsibility most admirably.

However, I should like to make one general point about the technology. The consultation paper Digital Terrestrial Broadcasting--I cannot let this moment pass without commending my noble friend's department for the clarity and succinctness of the document--commented:

    "The technology is being developed now. To exploit it to the full will require vision, imagination and significant investment".

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In that sense the Bill affords us the opportunity to lead the world in digital technology. As we wrestle with the terminology of multiplex and the like in the coming weeks we will need generous helpings of that vision and imagination to ensure that this opportunity can be grasped.

I have common cause with the words that the noble Lord, Lord Donoughue, used last week when he remarked:

    "Our aim should be to set out a framework which encourages growth in what is one of our most dynamic and rapidly changing technological activities".--[Official Report, 9/1/96; col. 23.]

In effect, we are not only licensing for the broadcast of digital terrestrial services; we are also licensing for the development of a specific technology that could and should have substantial benefits across a very broad spectrum of our social and economic fabric--in our manufacturing and communications industries, in education, in trade, and so on.

I have no doubt that the Bill's provisions with respect to cross-media ownership and the like are something to which we will be devoting a great deal of time in the coming weeks. For myself, I am somewhat ambivalent. I am suspicious of formulae in this area that create artificial or distorted markets. Against this, I hope that I am not too much of a technophile that I cannot recognise some of the dangers inherent in the immense power that the broadcast media have to influence their audience, dangers that carry much greater risk if the power is invested in a single entity. I look forward to hearing in Committee the perspectives of those of your Lordships better versed in the matter than I.

There is a consensus that the merging of the Broadcasting Standards Council and the Broadcasting Complaints Commission into the Broadcasting Standards Commission is welcome. I concur with that. So far as the BSC's functions are concerned, it is of course inevitable that some of the content of our debate on the BBC has spilled over into today's proceedings. It is also the case that a number of important issues were raised last week which, while they have a particular relevance to the BBC, are no less important to the rest of the broadcast media.

The one thing that the BSC will most assuredly be once the Bill has completed its passage through Parliament is a central regulatory authority. While acceding to the views of the noble Lord, Lord Annan, particularly in so far as they relate to the broadcast media's creative output, I find myself as attracted to the views of the noble Lord, Lord Chalfont, particularly as regards the factual element. Like him, I believe that,

    "there are serious defects in the section which deals with the new Broadcasting Standards Commission, especially as regards complaints about fairness and impartiality".--[Official Report, 9/1/96; col. 54.]

I cannot say that I am at all surprised that there is no mention of impartiality in Part IV of the Bill. It is at best an ephemeral beast. Nor would I seek to dispute the characterisation of the noble Lord, Lord Barnett, that impartiality is,

    "in the eyes of different beholders".--[Official Report, 9/1/96; col. 46.]

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When one adds the simple truth that, by its very nature, the factual material with which the broadcast media are required to work is partial one begins to see the paradox with which we are faced.

My own belief is that any attempt to, as it were, "front-end load" the concept of impartiality onto the face of legislation would be to veer dangerously close to irresponsibility. That, if I may say so, is barking up the wrong tree. I would therefore be extremely chary of amendments that sought to impose rules, guidelines or codification in this regard. In my view, the noble Lord, Lord Annan, is right in saying that in this sense what is required is responsible behaviour from the broadcasters themselves. How, therefore, are we to achieve that belief and trust in the impartiality of our media that is so desperately needed and required?

Many of your Lordships in our debate on the BBC made reference to the principle of accountability--accountability of the broadcaster to its consumer and paymaster. Of course, that is extremely important. Among others, the noble Baroness, Lady Jay, pursued that thread with vigour today. However, I would like to develop the logic of it a little further.

As a nation we have to be honest and mature enough to recognise and admit that the media--all the media--operate both within and without our parliamentary process. As such--and here I echo the words of the noble Lord, Lord Chalfont--they are as much servants of the public as Parliament or the Civil Service, with all the ramifications that that has for democratic accountability. In our information age, it is simply not enough that broadcasters protest their innocence as regards any transmission of bias or distortion, however accurate or well-meaning such protestations may be. We have to think more laterally than that. In common with those in public service, the actuality of fairness and propriety must be buttressed by tangible substance that the nation--both the people and Parliament--can see.

I therefore favour the principle of the BSC being invested with a mechanism against which the public can adequately and properly measure the fair or impartial performance of broadcasters both corporately and individually and against which their performance can be seen to be transparent and open to scrutiny. My hope is that in Committee I shall be able to introduce amendments to achieve that effect.

I have already suggested that the Bill represents an opportunity to give a fillip to the nation's industry, education, economy and so on. The immense benefits that this technology can bring to so many areas of our lives, while not without problems of execution, are tantalisingly close. I conclude by saying that, above all else, the Bill represents a unique opportunity to give a fillip to our democracy, an opportunity to which I feel that we--the corporate "we", including ourselves in Parliament, the people and especially the media--should attach the greatest priority.

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8.26 p.m.

Lord Dubs: My Lords, perhaps I may first declare an interest in that I am deputy chairman of the Broadcasting Standards Council. I wish to congratulate my noble friend Lady Smith of Gilmorehill on her excellent maiden speech and on the thoughtful contribution that she has made. She is proving to be an asset not only to the Labour Benches but to the House as a whole.

In thinking about the speeches that have been made today I am bound to conclude that politicians--we in this House must call ourselves politicians like Members of another place--have a viewing pattern that is different from the rest of the population. I suspect that we are more avid consumers of news, current affairs, documentaries and so on. To that extent, our perceptions are a little askew.

The issue with which we have been wrestling throughout the debate has been the problem of arriving at the right balance between public service broadcasting, in particular not-for-profit public service broadcasting, and the operation of market forces. That runs through virtually all parts of the Bill. Whereas none of us would argue that market forces alone should determine the future of television and radio into the next century, all of us are aware that the days when the BBC had a monopoly and there was no profit in it are long gone. We are seeking to arrive at the right balance.

It is difficult for us to come to terms with the fact that Rupert Murdoch has shown enormous entrepreneurial skill in getting into such a strong position. In a sense, he is still on the march as regards the BBC, ITV and Channel 4 managements and we are trying to deal with the consequences as regards sport. Whatever one may say about Rupert Murdoch, he has been most skilful in his entrepreneurial approach and in taking a risk with his satellite transmissions, which many people in the business did not think would be successful. We have the difficulty of establishing an effective future for public service broadcasting while allowing for diversity in our media and the forces of competition.

I believe that the advent of digital transmission represents an exciting but difficult opportunity. I understand that the BBC is on the way to developing digital processing for the editing of transmissions which will then go out on analogue.

Of course, for consumers of television, a more interesting prospect is that of having more channels, better quality pictures and radio reception and the opportunity to use digital in such a way that it becomes a more localised service with local options and variations.

A drawback which I am not sure has been mentioned very much today is that for consumers it is extremely expensive to buy a radio set which will take digital. It is likely that in the initial stages it will also be expensive to buy television sets which are wider in their screen shape in order to receive digital effectively. There is also the cost of the black boxes. I very much hope that the development of technology will be such that the cost of equipping ourselves with digital will fall to a level that

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is not much more than the present cost of equipment. But at the moment the cost must be seen as something of a deterrent.

I support totally the view of the terrestrial channels, especially the BBC, that it is important that there should be open access for all public service broadcasting through whatever digital system is developed. Otherwise, we shall have quasi-monopoly positions which will undermine the concept of public service broadcasting and, in relation to the BBC, it will undermine the concept of a compulsory licence fee. Unless there is universal access, the willingness of people to pay the licence fee--and I totally support the fact that there should be one--will be weakened.

In that context, perhaps I may ask the Minister a question. I have been told that Rupert Murdoch has bought all the remaining channels on the Astra satellite, including a number that are not being used, in order to prevent the BBC and perhaps the ITV companies from gaining access to it. I am not sure that I am right about that, but that has been put to me with a certain amount of conviction.

I turn to the question of sport which has been covered so ably by my noble friend Lord Howell who has outlined very clearly the difficulties for most of the population who wish to watch sport. I enjoy watching sport. It would be a very sad day indeed if, for example, test matches, the cup final and other leading football matches, rugby union internationals and the Olympic Games were no longer to be shown on terrestrial television.

I understand that Rupert Murdoch has been very skilful in persuading people to subscribe to BSkyB, but it will be a sad day if something which has become almost within our national television coverage were to be no longer available to ordinary people. I am sure that many people in the country will look to Parliament to safeguard their right to watch sport. I understand the difficulties and I realise that there is a difference between designated sporting events for the most significant national coverage and giving universal access to TV highlights and full radio commentaries; but I hope that we can make some progress in that regard, otherwise it will be a sad day for many people in this country.

I turn now to the suggested merger of the Broadcasting Standards Council and the Broadcasting Complaints Commission. Because of my position on the Broadcasting Standards Council, I do not wish to say more than a few words about that. I speak personally but I certainly welcome the merger. I believe that the Broadcasting Standards Council has done much better than many of its critics suggested but we were ably led by Colin Shaw, our director--who, alas, will be retiring in the near future--and by our present chairman, Lady Howe.

I should like to say a few words about the suggestion that the new body should deal with questions of impartiality; and by that I believe we mean political impartiality. There is a world of difference between dealing with complaints about unfairness and breaches of privacy when an individual is featured in a television

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programme, which I believe is the proper responsibility of the new body which is to succeed the Broadcasting Complaints Commission, and dealing with the hot issue of political impartiality. I speak entirely personally but I should not wish the new body to be asked to become embroiled in that question. It would weaken the ability of the new body to deal with the other issues which are important. Moreover, it would require more resources. I am not sure that that is the best way to deal with such a hot issue. How on earth can we say whether there is too much Labour Party, Tory Party or Liberal Democrat Party bias on the "Today" programme or on "Newsnight"? That is a minefield and I should like the new body to be clear of it. Of course, if Parliament asks us to do that, we shall do so. But I advise noble Lords that that is not the best way forward.

Before I conclude, I should like to make two other points. I believe that my noble friend Lord Ashley covered one of them. The advent of modern technology and digital technology will enable television programmes to be made so that they are more friendly to people who are hard of hearing or who have impaired sight. I was extremely impressed when I had that explained to me by the BBC. It will be possible for people who are hard of hearing to use digital technology so that they can specify sub-titles which other people do not have to watch. It is all a matter of which buttons one presses. That represents an enormous technical opportunity: to make the sub-titling universal across all television programmes. Similarly, other developments can take place for people who have impaired sight. I welcome the opportunity that that will give to people.

Finally, I do not like to use too often the jargon expression "level playing field". I believe that that should be confined to descriptions of sports fields. However, it is important that we should move towards a level playing field as regards the financing of commercial television in the sense that Channel 4 has to make a contribution to the ITV companies; the ITV companies have had to bid for their licences; and satellite television does not have to do any of that. There is there a difficulty and an inconsistency. I suspect that there is nothing much that can be done in the immediate future about Channel 4's complaint in that the other ITV companies took account of Channel 4 income when they made their bids. But that looks increasingly like an anomaly which will have to be rectified in the fullness of time.

8.37 p.m.

Lord Lyell: My Lords, it is a great pleasure to be able to take part in a debate on the Second Reading of a major Bill like the Broadcasting Bill. It has been extremely instructive to me and no doubt to many other noble Lords as regards the enormous scale of the communication systems which we are discussing.

The noble Lord, Lord Dubs, and many others who have spoken have referred to one particular, as I think he calls himself, service provider; namely, Mr. Murdoch. He seems to have revolutionised major aspects of television in this country in connection with satellite television and so on. Many of the comments

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made about Mr. Murdoch have been in relation to the transmission of sporting programmes. I believe that my noble friend Lord Pearson quoted some figures which were reasonably accurate. They demonstrated the fact that only 1 per cent. of the sporting material transmitted by Mr. Murdoch would be shown on normal terrestrial television. Having seen some of the sports programmes on satellite television, I must tell your Lordships that I reach for the "off" button fairly quickly. There is truck racing. Sumo wrestling can be quite interesting, but many of the programmes send me straight to sleep.

However, in the course of today's debate, although I have great sympathy for the terrestrial broadcasters, I have been reminded of a time about 20 years ago when England were playing cricket in Australia. After the close of play one day, the England captain happened to be walking through the stands and he spoke to one of the maintenance men. This was either at the Sydney or the Melbourne cricket ground. They began to talk. The England captain discovered that the man who was clearing up the beer cans and generally sweeping up was paid more than the captain of England was receiving as his match fee and overall earnings. After that a complete revolution in the game was brought about not by Mr. Murdoch but by one of his bitter rivals--Mr. Packer. The noble Lord, Lord Howell, may be disappointed about the results last week when I understand that matters did not go entirely England's way. But, as a result of that, we had an interesting insight into the game.

Thanks to Mr. Packer's rebel cricket tour, the financial stakes were raised and a good bit went to the players, for good or ill. I confess a particular interest as one of your Lordships' leading couch potatoes. For 51 weeks in the year I can be seen sitting before a television set muttering "They're not fit" while reaching for some liquid beverage. I am therefore a consumer as far as much of what has been discussed this afternoon is concerned.

I should like to raise one arcane point. It relates to the Broadcasting Act 1990 and what are referred to in Section 175 as "statutory licences". I understand that, when that Act was proceeding through your Lordships' House and another place, the intention was to provide in that section--which made further reference to the Copyright, Design and Patents Act 1988--measures to assist new broadcasters and radio stations such as the noble Viscount, Lord Chandos, mentioned earlier to thrive and to get under way reasonably quickly. There was also a relaxation of the quantity restrictions on what was termed needle time. Needle time related to records that some of us remember from our youth. It referred to the length of time during which recorded music and material, for which a payment would be made by the broadcaster to the owners of the copyright, could be played on radio stations.

It was difficult in 1990, as it is today, to define "broadcaster". Since the passage of the 1990 Act, a new type of broadcaster, or service provider, has emerged. Two particular effects have resulted from that. One is the multi-channel cable network, which can provide

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through one coaxial cable anything up to 120 different channels carrying very high quality music or speech. The quality of this material in transmission is good enough for recording on to blank tapes. However, that particular problem would not necessarily be applicable to the Bill, let alone as we have it tonight.

The second effect relates to what is called "muzak", which we hear in the background in hotels and very often in retail stores and enormous do-it-yourself warehouses. One hears background music, occasionally interspersed with announcements. I understand that this particular type of transmission is a marketing aid. For my part, I am not totally lured by the music as I go between the shelves, but I am advised that certain types of background music are considered to be a valuable marketing aid in large retail and wholesale areas.

It is the service provider of this particular form of sound, be it music or announcements, who in many cases is the beneficiary of the licensing provisions of Section 175 of the 1990 Act. The provisions of that Act do not give reasonable protection, as might have been seen then, to the copyright material, which in many cases is music. It is clear that that section was intended to assist the new, sometimes small, fledgling broadcasting stations. That did not seem to be a major problem to the owners of the copyright material. But the new breed of service provider which has mushroomed intensely in the past five or six years is able to use the provisions of Section 175 to negate the normal pattern of copyright protection mentioned in the section. It is pretty large, but I think that the point will be clear to the Minister with his enormous knowledge.

I hope that this problem will be solved by examining statutory licensing and this section of the 1990 Act, as it applies, I believe, to Part III of the Bill before us tonight. Perhaps I may cast that delicate fly over my noble friend to let him know that this matter may be raised at a later stage.

I conclude by congratulating him on his enormous stamina. He has sat in the Chamber throughout this evening. I read in a very reasonable article, which perhaps was not too flattering, that my noble friend had engaged in a sporting activity over the Christmas holidays. He had been skating and did not fall through the ice of Derwent Water but survived. That is a lot more than can be said of my noble friend Lord Astor and myself, who were in the Alps.

8.45 p.m.

Baroness Wharton: My Lords, I intend to refer only to the problems that face Teletext, not only now but well into the next century. I wrote to the noble Lord's predecessor and the former Secretary of State on the subject of Teletext on ITV and Channel 4. The ability to modernise and update this popular service, which has over 17 million viewers a week, is severely constrained by its lack of broadcasting capacity. I am often surprised by how many people believe that Teletext is part of ITV rather than an independent licensee. It has won its franchise along with the rest and contributes £8.2 million to the Exchequer every year.

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Teletext's existing technology was invented in the 1970s and has barely changed since. It broadcasts its pages to more than half the homes in the country by the use of vertical blanking intervals, or VBI lines. Teletext Limited currently has 7½ lines on ITV and the same number of Channel 4. It is a public service that is regulated by the ITC. The BBC's service, known as Ceefax, has 12 lines for each channel. Teletext routinely exceeds the number of pages that it is obliged to broadcast under the terms of its licence but wishes to present its viewers with additional information services and to improve the look of its overall service by the use of digital technology. It believes that such a service may encourage people to take up the new digital technology. This was recognised in the Government's White Paper on digital broadcasting. The White Paper said that a super-Teletext service could increase the appeal of digital receivers to the consumer. Teletext has high aspirations for digital broadcasting.

However, under the Government's proposals for digital terrestrial television it is proposed that Teletext Limited should be allocated a guaranteed place capacity, equivalent to that employed in its existing analogue service, in order to simulcast its service via the new digital transmission medium. Teletext wants to publish photographs and offer a far speedier service as well as improve its general presentation. That will be necessary if it is to remain competitive into the next century. It is the original information on demand service but now faces potential competition from emerging media, such as on-line services and the Internet. These new media have a far more up-to-date look than Teletext.

Teletext already has more viewers than its rivals. It brings us the latest information, with up to 50,000 updates a day. Not only does it provide news, sport and financial information, as well as entertainment magazines; is also a major player in the holiday industry. It is estimated that approximately 20 per cent. of holidays are booked on the basis of information on Teletext. It is also interactive in that it encourages viewers to take part in the service. It has many other features too numerous to mention here.

Teletext has asked the Secretary of state for its guaranteed capacity to be increased to 10 per cent. of the multiplex frequency in order to develop an enhanced digital service. We know that BBC, ITV, Channel 4--and in the future Channel 5--have all had their guaranteed allocations increased. They will be able to offer new services along with their existing simulcasted services. I hope that the Minister will look favourably on the request as I believe it should be able to compete on a level footing with the other public service broadcasters whose capacity is increased by the Bill.

8.50 p.m.

Viscount Astor: My Lords, I should like to give a warm welcome to this Bill. It establishes effective cross-media ownership rules while also ensuring national and regional competition, as well as protecting regional programming. It does not make sense to try totally to separate sections of the media. Old boundaries,

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because of new technology, are rapidly disappearing. One can now read a newspaper on a screen or have a video sent down a telephone line.

I believe the Government are quite right to have strict safeguards to prevent unacceptable concentrations of control or ownership, whether it be national or regional. This Bill will make a significant difference to the broadcasting industry. For too long governments have regarded it as a sort of cottage industry to be kept small and exclusive. It is much more important than that. It is a major industry in this country and it deserves to be treated as such. It is an industry that will have to compete with the vast European companies, and that means being able to achieve a certain size and also a certain profitability.

It must be right that ITV companies should be able to take a part of cable and satellite services. In fact, Granada Television has already announced the launch of eight channels later this year. I do not believe that this means that television is necessarily going down market, or indeed losing regional programming. The ITC, through the licence system, is well placed and will have additional powers under the Bill to ensure that that does not happen. One of the advantages of the proposals of the Bill is that broadcasters will be able to offer the consumer, whether a viewer or a listener, a wider choice.

In this country we have excellent television companies and a strong domestic production base but our television sector is vastly over-regulated. How can we expect British television companies to invest in production, build up their libraries, and to compete internationally if they are constrained by out of date legislation? I strongly support deregulation not of television's content but of the rules governing ownership. Deregulation has strengthened other sectors of the economy and it can do the same for television. We must seek to ensure that this Bill does deregulate. A government pledged to deregulation is rather like an alcoholic pledged to give up the bottle--it always pays to keep an eye on the drinks cupboard.

I am slightly concerned, therefore, to see in the Bill a raft of regulations for the ownership of digital terrestrial services, far in excess of anything that governs cable and satellite services. I am sure that my noble friend the Minister will provide a convincing explanation of these rules at Committee stage. But if we are trying to enhance competition and improve deregulation, we should think very carefully before adding to the rules and regulations currently governing the television industry. The increase in the number of channels that digital, cable and satellite will make possible will considerably enhance choice and lessen the need for regulation. We should try to ensure that it is not necessary for us, in another three or four years time, to debate yet another broadcasting Bill scrapping restrictions put in place by the current one.

There are two areas of difficulty that must be addressed. The first is that for the first time we are proposing the linking under ownership rules of the unregulated sector, newspapers, with the regulated sector, television and radio. I do not see this necessarily

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as a problem. There is a clear difference between the two sectors, but I believe we must be on our guard not to over-extend regulation. However, although the Bill includes the ownership of newspapers, it does not include the ownership of magazines, or some of the newer products like inter-active multi-media. I do not see how in the future these can be excluded if we are to include newspapers.

The area of perhaps greater concern is the boundary between Oftel and the ITC. There is no doubt that in the past there has been confusion between the roles of the two, not only in industry but also in government.

I am not sure that the Government have got the split of responsibilities right between the two departments, the Department of National Heritage and the DTI. No department ever likes giving up responsibility to another, and turf wars are fought with a passion never normally seen in Whitehall.

The DTI yesterday finally published its proposals on conditional access and encryption for digital television. Although the proposals for digital look sensible, they are only applicable for digital satellite, cable and terrestrial services, none of which we currently have. They are not applicable for analogue, which is here, and is where the proposals need to be applied. This means that conditional access for current satellite broadcasters is ignored. It is not in the Bill, nor in the DTI proposals. I believe this is wrong. I agree very much with what the noble Lords, Lord Donoughue and Lord Thomson of Monifieth, said on the subject.

The ITC wanted to be given the responsibility. It already has the power in relation to its own licensees. The Government have chosen instead Oftel. I accept and understand their reasoning. However, it is not acceptable, if as a result Oftel then weakens the regulations which were proposed to ensure a fair market. That is what has happened.

I have to say to my noble friend the Minister that unless the Government seriously consider proposals to include analogue, satellite and cable services in the Bill, this House will have to consider amendments to the Bill at Committee stage, which will give the power needed either to the ITC, or Oftel to ensure reasonable access for analogue services. I would have to support those amendments.

I turn to a happier part of the Bill and give a welcome to some important changes. The first are the changes proposed for independent national radio. Currently a national licensee, such as Classic FM, would have at the end of its licence to go through a competitive tendering exercise, with no concession as to the quality of service that has been provided over the licence period. The Government have quite rightly listened and proposed to put the national licences on a similar basis as local radio. The three licensees will be able to roll forward their licences for a further period of eight years on condition that they take up their allocated digital slot. That is to be welcomed.

The second bit of good news is the merger between the Broadcasting Standards Council and the Broadcasting Complaints Commission. The new body

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will need to be effective and have sufficient power to represent and protect the public. It will need to ensure that broadcasters, and that includes the BBC, behave in a way that does not unjustly or unfairly infringe on people's privacy. Most importantly, it will have to maintain and implement the code which is to be drawn up by the new body--the Broadcasting Standards Commission--on taste and decency, and on the portrayal of violence.

The Bill will encourage investment in digital and investment in multiplex services, and guarantee access to them. The BBC is going to be, as it were, gifted a multiplex for its services; and the Government have announced that the sale of the transmission business of the BBC will help pay for the introduction of its digital service. I have one question to ask my noble friend the Minister. Will it be possible to also use the moneys raised to subsidise the installation of set top boxes, or could these be funded by the BBC's own licence fee? This is an important question because the independent companies are going to have to pay for this themselves. Obviously we must make sure that there is fair competition.

I have spoken recently on the complex subject of Channel 4 funding and on sport so I do not intend to say much this evening on those two subjects. I shall await the Committee stage. However, I must say to the noble Lord, Lord Howell, that as much as I respect him I profoundly disagree with what he had to say on sport. I believe that he has correctly identified some of the problems but in doing so has proposed totally the wrong conclusions to put them right. We have to be careful as regards interfering with the rights of sport. It is a business and an industry and the public have certain rights. I believe that the proposals of the noble Lord, Lord Howell, go far too far and are extremely dangerous for sport and the public, but no doubt we will debate that matter at the Committee stage and throughout the Bill.

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