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Clause 7, page 8, line 3, leave out 'the service' and insert 'all the multiplex services available in that area'.

Lord Inglewood: My Lords, I beg to move that the House do agree with the Commons in their Amendment No. 11. With the leave of the House, I should like to speak at the same time to Amendments Nos. 12 and 151.

As I have already intimated, these amendments address an important issue and with the leave of the House I would like to speak to them at a little more length.

These three amendments are all intended to help to ensure that the consumer will have the opportunity to receive the greatest possible choice of broadcast services by buying a single piece of equipment.

As your Lordships will be aware, during Committee stage in another place, the Government issued a consultation paper on co-operation between digital terrestrial multiplex providers, and the single set top box. Conditional access is a major factor here. All terrestrial boxes must, under the terms of the European Directive on Advanced Television standards, be able to receive all terrestrial services transmitted in clear. However, without interoperability between different systems, it is possible that some boxes might be unable to receive all digital terrestrial pay-TV services.

To help to prevent this problem, and in the light of responses to our consultation document, two complementary measures have been taken. First, the Government have published a draft statutory instrument and draft Telecommunications Act licences implementing the conditional access provisions in the directive. The proposals will ensure that any broadcaster may obtain conditional access services from every provider of such services, and can thus make his programmes available through every digital terrestrial set top box, if necessary by transmitting them with more than one set of conditional access control information. This process, known as simulcrypt, does not involve mandating a common interface, which as Ministers explained in the Commons, would require seeking clearance from the European Union and, even if that were granted, would lead to substantial delay. The Government continue to believe that a mandatory common interface would discourage investment by allowing latecomers to free-ride on investment by those who have developed and subsidised set-top boxes.

The second measure is contained in Commons Amendments Nos. 11 and 12, which the Government believe are an ingenious response to some of the competition law difficulties identified with proposals requiring collusion between multiplex providers. The amendments require the ITC to take into account, in

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awarding multiplex licences, not only applicants' plans to promote and assist the acquisition of digital terrestrial receiving equipment, but specifically their plans to encourage the roll out of equipment capable of receiving all digital terrestrial services. Applicants may choose to do this, for example, by coming to arrangements involving the voluntary incorporation of a common interface or through simulcrypt.

Finally, I should like briefly to explain Commons Amendment No. 151, which implements Article 2(c) of the directive, dealing with transmission standards. This goes beyond digital terrestrial and seeks to facilitate interoperability across all three delivery mechanisms--terrestrial, satellite and cable. The effect of that will be to allow manufacturers, should they so choose, to produce set top boxes, and later integrated receivers, capable of receiving all digital television services. It will also facilitate interconnectivity between boxes so that viewers with separate boxes for different means of transmission will be able quickly and easily to switch between, say, terrestrial and satellite services, using the same television set.

The directive mandates particular standards, but allows member states to select from various options within them. The amendment gives the ITC the power, if necessary and after consultation with all the relevant bodies, to select a particular set of options for use in broadcasts in the UK. I hope that that slightly longer explanation will have been helpful. I commend the amendments to the House.

Moved, That the House do agree with the Commons in their Amendment No. 11.--(Lord Inglewood.)

Lord Donoughue: My Lords, this, I feel, is the single most important policy issue in the Bill. It was quite properly mentioned by the noble Lord, Lord Thomson, at the beginning of our deliberations because the interconnectivity of set-top boxes and the whole question of universal access are crucial. It is important to ensure that from the beginning consumers do not have to buy a range of different set-top boxes to gain access. One box should be sufficient to gain access to different digital systems, otherwise there is a danger that whoever springs first and pre-empts the field may block out the others. One agent may, for example, produce a heavily subsidised box which gives access only to that system.

Much progress has been made on this since we first raised it at Second Reading in your Lordships' House. In particular, Amendment No. 151 is very helpful, but we still have to wait until we have the final DTI regulations. We on this side will scrutinise those regulations closely to make sure that the maximum interconnectivity is achieved.

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Lord Renton: My Lords, I promise your Lordships that I shall not speak to every group of amendments. I am quite surprised at myself for doing so on the first two.

Amendment No. 151 is really very interesting. It states:

    "The Independent Television Commission ... shall do all that they can to secure that every licensed service uses a transmission system complying with",
the Council directive. I wonder whether my noble friend can tell me whether that means that there will be a standard transmission system to be used by each licensed service. I can see the advantage of that. It would mean that the best system would be chosen and that there would not be varied performance by different licensed services. Does it mean that each licensed service shall use a transmission system complying with the Council directive? There is a slight distinction. If my noble friend is able to say which of the two things it means, it might be of help as guidance for the future.

Lord Thomson of Monifieth: My Lords, I am grateful to the Minister for the full explanation that he has now given. I apologise for the fact that I had confused Amendment No. 4 with the fourth group of amendments.

Lord Inglewood: My Lords, I am most grateful to noble Lords who have expressed the view that this has been a step in the right direction. In response to the important question from my noble friend Lord Renton, I think that the strict reply is that both of the options that he described are valid.

We are moving into a world where the technology will be more or less entirely new. The precise form that that technology may take is not yet certain. Within the parameters of European legislation, various options are technically possible which may contain a degree of mutual exclusivity.

There are two problems that we want to avoid. One is clearly the problem that in some way or other, by adopting a particular technology, one broadcaster may effectively block out and exclude another broadcaster. The other--this state of affairs is very well illustrated in the video market--is that it is possible to mandate a standard which, given the benefit of hindsight, is perhaps not the best standard that could have been adopted because of the state of knowledge when the decision had to be taken.

We have endeavoured to provide an environment where the technology can lead in the marketplace. At the same time we have also endeavoured to provide what might be described as a safety net so that if it looks, for example, as if one player in the game may be using exclusive control of a particular form of technology to exclude all the others, he will not, in fact, be able to do that.

On Question, Motion agreed to.



Clause 8, page 9, line 8, leave out 'the service' and insert 'all the multiplex services available in that area'.

18 Jul 1996 : Column 1011

Lord Inglewood: My Lords, I beg to move that the House do agree with the Commons in their Amendment No. 12. I have already spoken to this amendment.

Moved, That the House do agree with the Commons in their Amendment No. 12.--(Lord Inglewood.).

On Question, Motion agreed to.



Clause 9, page 9, line 29, leave out 'and 8(2)(c) and (e)'.

Lord Inglewood: My Lords, I beg to move that the House do agree with the Commons in their Amendment No. 13. I wish to speak also to Amendments Nos. 14, 15, 16 and 28. These amendments were made in response to a request by the ITC to clarify the way in which the ITC shall consider the award of multiplex licences that have been "bundled". Amendment No. 28, again requested by the ITC, makes clear that all programme services must consist of at least 10 per cent. independent productions and a proper proportion of European programming.

Moved, That the House do agree with the Commons in their Amendment No. 13.--(Lord Inglewood.)

On Question, Motion agreed to.



Clause 9, page 9, line 32, leave out 'and'.

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