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Lord Fraser of Carmyllie: My Lords, I take it that my noble friend is referring to the occasions on which the powers that were available under the 1939 Act were exercised. It is certainly the case that on repeated occasions since the previous war that measure has been used by successive governments. It was a matter that was open to challenge. It was challenged in the Ordtec trial and a decision was made in the Court of Appeal. Notwithstanding the fact that the court upheld the legality of the orders made under the 1939 Act, we should like to look again at the whole issue in the light of the observations that have been made. However, my noble friend might remember that when the particular provisions of the 1939 Act ceased to be temporary and became permanent, that was done with the agreement of the Opposition, and the absence of any provision for even the negative resolution procedure was omitted from the Act with the knowledge and, indeed, possibly, at the instigation of the Opposition.

Lord Harris of Greenwich: My Lords, I wish to ask the noble and learned Lord one question arising from the Statement. He referred to the Learmont Report as being in some way analogous with the one we are

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discussing. Is he aware that that is a nonsensical comparison? The Learmont Report was a limited report on prison security. It raises none of the issues of the Scott Report and therefore the comparison he made in justifying, or attempting to justify, these strange distribution arrangements really does fall pretty flat.

However, on the question of the distribution arrangements, I return to the point made by the noble Lord, Lord Richard. As I understand it, the Government's case is that everything they have done in relation to the distribution arrangements is entirely because of the views of Sir Richard Scott. That is their position, as I understand it. That being so, I ask the noble and learned Lord one question. The noble Lord, Lord Richard, referred to a letter from the Leader of the Opposition in the House of Commons to the Prime Minister in which he asked for these reports to be made available at nine o'clock in the morning. Can I take it that Sir Richard Scott was consulted on that point? Can I also take it that he was opposed to it? Is that the Government's position?

Lord Fraser of Carmyllie: My Lords, it is certainly my understanding that when the suggestion was made that it should be made available from lunchtime, or twelve o'clock, he was in agreement with that. I certainly understand that to be his view. I did not suggest that the Learmont Report was, in terms of physical size, like this report. I referred to the Learmont Report to point out that on that occasion an exceptionally long period of consideration was allowed prior to the Statement. That decision was viewed with gratitude in another place. There have been many larger reports published as parliamentary papers where the period allowed to Opposition spokesmen for consideration has been much shorter than the time permitted on this occasion. It was only for that limited purpose that I made that observation.

Lord Barnett: My Lords, would it be fair to assume, following the noble and learned Lord's 20 minute repetition of the Statement made in the other place after more than three years' work by Lord Justice Scott, which has resulted in a report of 1,800 pages, that there is nothing wrong at all and everything is okay?

Lord Fraser of Carmyllie: My Lords, that is not a fair summary of what I said in the Statement. I recognised that on a number of matters, including the handling of intelligence, there were problems with procedures. I indicated that had those procedures been better it is likely that a different view would have been arrived at in the Matrix Churchill case. I also indicated that on a number of matters it would be appropriate to go out to consultation. I made it quite clear that there was a set of criticisms. I certainly did not indicate that there were no difficulties whatever.

What I did set out--and I make no apology for doing so, given the outrageous accusations that have been made against a number of my right honourable and honourable friends in another place--was that this was an entirely suitable occasion to demand of those who have made those accusations, without having seen the report, that they withdraw them unequivocally.

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Broadcasting Bill [H.L.]

4.50 p.m.

The Parliamentary Under-Secretary of State, Department of National Heritage (Lord Inglewood): My Lords, I beg to move that the House do now again resolve itself into Committee on this Bill.

Moved, That the House do now again resolve itself into Committee.--(Lord Inglewood.)

On Question, Motion agreed to.

House in Committee accordingly.

[The DEPUTY CHAIRMAN OF COMMITTEES (The Viscount of Oxfuird) in the Chair.]

Viscount Astor moved Amendment No. 187:

After Clause 66, insert the following new clause--

Matters relating to conditional access systems and subscriber management services and licences to run systems

(". After section 191 of the 1990 Act there shall be inserted the following sections--
"Matters relating to conditional access systems and subscriber management services.
191A.--(1) Any person who runs a conditional access system or a subscriber management service in relation to a television programme service shall be required to obtain from the Director a licence for the running of such system or service.
(2) The Director may after consultation with the Commission and such other persons as appear to the Director to be appropriate grant a licence for the running of a conditional access system or a subscriber management service in relation to a television programme service.
(3) A licence granted under this section shall be in writing and, unless previously revoked in accordance with any term in that behalf contained in the licence, shall continue in force for such period as may be specified in or determined by or under the licence.
(4) A licence granted under this section may be granted to all persons, to persons of a class or to a particular person.
(5) A licence granted under this section may include--
(a) such conditions as appear to the Director to be requisite or expedient having regard to the duties imposed on him by subsection (9) below;
(b) conditions requiring payment to the Director on the grant of the licence or payments during the currency of the licence or both of such amount or amounts as may be determined by or under the licence; and
(c) conditions requiring any person who is authorised by the licence to run a conditional access system or a subscriber management service to furnish to the Director, in such manner and at such times as he may reasonably require, such documents, accounts, estimates, returns or other information as he may reasonably require.
(6) Without prejudice to the generality of paragraph (a) of subsection (5) above, conditions included by virtue of that paragraph in a licence granted under this section to a particular person may require that person--
(a) to comply with any direction given by the Director as to such matters as are specified in the licence or are of a description so specified;
(b) except in so far as the Director consents to his doing or not doing them, not to do or to do such things as are specified in the licence or are of a description so specified; and

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(c) to refer for determination by the Director such questions arising under the licence as are specified in the licence or are of a description so specified.
(7) A licence granted under this section otherwise than to a particular person shall be published in such manner as the Director considers appropriate for bringing it to the attention of the persons for whose benefit it will enure.
(8) Any sums received by the Director under this section shall be paid into the Consolidated Fund.
(9) It shall be the duty of the Director to exercise his function in the grant of licences hereunder in the manner which he considers is best calculated--
(a) to ensure fair and effective competition between persons engaged in the provision of conditional access systems, subscriber management services and services connected with them in particular television programme services;
(b) to promote the interests of consumers, purchasers and other users in the United Kingdom (in particular in respect of the prices charged, the quality and variety of service) of conditional access systems, subscriber management services and services connected with them in particular television programme services.
(10) The holding by any person of a licence authorising the provision of a conditional access system or subscriber management service shall not relieve him of any requirement to hold a licence under section 7 of the Telecommunications Act 1984 in connection with the provision of such a service or system.
Licences to run systems.
191B.--(1) Any person who runs a conditional access system or a subscriber management service within the United Kingdom shall be guilty of an offence unless he is authorised to run such a system or service by licence granted under section 191A above.
(2) A person guilty of an offence under this section shall be liable--
(a) on summary conviction to a fine not exceeding the statutory maximum;
(b) on conviction on indictment, to a fine.
(3) No proceedings in respect of an offence under this section shall be instituted except by or on behalf of the Director.
(4) Without prejudice to subsection (2) compliance with this section shall be enforceable by civil proceedings for an injunction or interdict or other appropriate relief.
(5) In this section and in section 191A--
"conditional access system" means any system or apparatus designed or adapted for the origination, initial transmission and final reception of signals for the actuation, operation or control from another place of other apparatus by means of which such signals comprising encrypted television programme services (save for such services which are broadcast in digital form) broadcast for general reception may be received and decrypted.
"subscriber management service" means a service provided to any person operating a conditional access system or to any other person in connection with television programme services (save for such services which are broadcast in digital form) provided or transmitted by another person whether or not that last person is in the United Kingdom for billing or payment handling in respect of charges for and payments received from viewers of encrypted television programme services broadcast for general reception in the United Kingdom. Broadcast shall include transmission by wire or other electromagnetic means.
"Director" means the Director General of Telecommunications.".").

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The noble Viscount said: The amendment enables the Government to extend their own code on conditional access to encryption services from digital satellite services to analogue satellite services. Perhaps the Committee will allow me to explain. The principle is simple, even if the technology is slightly complicated.

At present the only encrypted programmes available in this country are analogue channels broadcast by BSkyB, which are subscription channels. Encryption means that the signal is scrambled and the viewer, to see the broadcast, has to have a black box with a card. The card one pays for when one subscribes; it is the means by which the broadcaster collects his revenue.

The Government have rightly recognised that those who control the delivery systems should not unfairly bar others, subject to reasonable terms and conditions, from access to the system to transmit their programmes. As a result, the Government announced in their new framework for digital television in January this year that it was proposed that the regulation of conditional access would be by way of licence conditions issued by the DTI and enforced by Oftel. That was good news for all except the ITC which, having long called for that safeguard, found that it was not to be the ITC but Oftel which would be the proposed regulator.

I believe that my amendment is important because on closer inspection of the government proposals it became clear that the new rules affect only digital transmissions and not analogue transmissions. Earlier in the Committee stage, speaking to an amendment proposed by the noble Lord, Lord Thomson of Monifieth, my noble friend the Minister said that conditional access to analogue systems was a "transitional and temporary matter". That is why this protection was not included.

Nearly 25 per cent. of the homes in this country currently receive analogue services. As the noble Lord, Lord Donoughue, has said, the analogue system may be used by at least 50 per cent. of those with such systems for the next 15 years. That is also the industry's view. It cannot even suggest a start date for digital transmissions. In relation to an earlier amendment the Government would not give a firm switch-off date for analogue. Digital broadcasting involves a new set-top box. It takes time to change. Therefore, this is hardly a transitional or temporary problem.

My noble friend also said that conditional access was covered by general competition law and any amendment would impose unnecessary burdens. If that is true why do we need a whole new set of regulations for digital broadcasting? Why is that not also covered by existing competition law? It is the same issue and the same problem.

It is a problem now because the Office of Fair Trading, following complaints from some cable operators, announced in December that it was to conduct a review of the issues relating to the supply of programming. It is of particular importance because cable companies provide the access while BSkyB is not only provider of access but also a main provider of programmes. The Office of Fair Trading has said that it expects its review to take up to six months. That means that it could be completed after the Bill has gone through Parliament.

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My noble friend also said that any shift in regulating the current market would undoubtedly damage investor confidence in the opportunities for digital terrestrial broadcasting. I do not believe that there is a shift, because the OFT demanded the same safeguards in informal undertakings by BSkyB. It is into those informal undertakings that it is now inquiring. Secondly, any investor in digital broadcasting will be subject to exactly the same conditions announced by the DTI and as proposed in the amendment before being granted a licence by Oftel.

My noble friend's final point was that the Bill was concerned with digital transmission in the future. I have to say to my noble friend that even a cursory glance at the Bill's explanatory and financial memorandum shows that it is also about ownership and the control of current analogue systems. We have heard a great deal about digital transmission both in Committee and at Second Reading. Digital broadcasting is undoubtedly the future. It is also in the future, and will not arrive for some time in the future.

My amendment has one other small advantage. It will encourage the use of a single satellite set-top box. The analogue market is far from being unimportant and transitory: quite the opposite. New channels are launched all the time.

Parliament must act now and put these safeguards in the Bill. If we wait for the outcome of the review it will be too late. My amendment follows and extends the Government's own policy. It protects those in the industry and it protects the consumer. I beg to move.

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