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'(5A) Where, in the case of any national radio multiplex service, the first accounting period of the holder of the national radio multiplex licence throughout which the holder of the digital additional services licence provides a digital additional service for broadcasting by means of the radio multiplex service ("the first period") has not yet ended, then for the purposes of subsection (3) the share of multiplex revenue attributable to the holder of the digital additional services licence in relation to that radio multiplex service for the relevant accounting period shall be taken to be the amount which the Authority estimate to be the share of multiplex revenue attributable to him for the first period.'.

Before Clause 61, insert the following new clause--

Review of digital radio broadcasting

'.--(1) For the purpose of considering for how long it would be appropriate for sound broadcasting services to continue to be provided in analogue form, the Secretary of State--
(a) shall keep under review the extent of--
(i) the provision in the United Kingdom of radio multiplex services,
(ii) the availability in the United Kingdom of digital sound programme services and the availability there in digital form of national services (within the meaning of Part III of the 1990 Act) and the sound broadcasting services of the BBC, and
(iii) the ownership or possession in the United Kingdom of equipment capable of receiving the services referred to in sub-paragraph (ii) when broadcast or transmitted in digital form,
and the likely future extent of such provision, such availability and such ownership or possession, and
(b) shall, on or before the fourth anniversary of the day on which the first national radio multiplex licence is granted under section 41, and at such time or times thereafter as he thinks fit, require the Authority and the BBC to report to him on the matters referred to in paragraph (a).
(2) If the Authority or the BBC are required to submit a report under subsection (1)(b), they shall submit the report within twelve months of the date of the requirement.
(3) Before making any report under this subsection (1)(b), the Authority shall consult--
(a) the holders of all radio multiplex licences,
(b) the holders of digital sound programme licences who are providing digital sound programme services which are being broadcast, and
(c) such other persons providing services licensed by the Authority under this Part or Part III of the 1990 Act as the Authority think fit,
and the Authority shall include in their report a summary of representations made to them by the persons consulted.
(4) For the purpose mentioned in subsection (1), the Secretary of State shall, on requiring reports under subsection (1)(b), consult--
(a) such persons appearing to him to represent listeners as he thinks fit, and

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(b) such other persons as he thinks fit,
in connection with the matters referred to in subsection (1)(a) and also, if the Secretary of State thinks fit, as to the likely effects on listeners of any sound broadcasting service ceasing to be broadcast in analogue form.
(5) In this section "sound broadcasting service" has the same meaning as in Part III of the 1990 Act.'.

Clause 62, page 56, line 38, at end insert 'and (4)'.


Clause 65, page 57, line 40, at end insert--

''ancillary service' has the meaning given by section 57(2)'.

Page 58, line 17, at end insert--

''technical service' has the meaning given by section 57(3)'.

Lord Inglewood: My Lords, I beg to move that the House do agree with the Commons in their Amendments Nos. 63 to 98 en bloc. I spoke to these amendments with various earlier amendments.

Moved, That the House do agree with the Commons in their Amendments Nos. 63 to 98.--(Lord Inglewood.)

On Question, Motion agreed to.



Schedule 2, page 91, line 10, at end insert--

'( ) for paragraph (a) of the definition of "associate" there is substituted--
"(a) in relation to a body corporate, shall be construed in accordance with paragraph (1A), and"'.

Lord Inglewood: My Lords, I beg to move that the House do agree with the Commons in their Amendment No. 171. In moving this amendment I shall speak also to Amendments Nos. 172 to 178 and Amendment No. 292. In addition, there is a manuscript amendment which I have just tabled. I apologise to the House for that, but a problem arose at the last minute and we hope that that amendment will resolve it.

Amendments Nos. 171 and 173 are concerned with the definition of an "associate". Our amendment will ensure that the associates of a body corporate will now be defined by reference to the Bill's definition of "control" which casts the net wider than the Companies Act's definition of a "group" on which the current definition is based.

Amendments Nos. 172, 174, 175 and 176 amend the definition and interpretation of "control" to catch a number of devices which have been employed to evade the ownership restrictions under the 1990 Act. Amendment No. 177 modifies the definition of a "participant", and Amendment No. 292 repeals provisions in Schedule 2 to the 1990 Act which will become redundant as a result of Amendment No. 173 once this schedule in enacted.

The regulators' greatest concern, which we share, is about arrangements made by corporate bodies which involve "warehousing", joint control or "deadlocked" companies. Amendments Nos. 176A to 176K, which have been inspired by the Independent Television Commission, seek to bolster the provisions inserted in the Bill in Committee dealing with this area.

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As it currently stands, the Bill will, without doubt, catch cases where two companies each have a 50 per cent. stake in the deadlocked company. However, concern has been expressed about the case where, for example, company A and company B each hold a 49 per cent. interest while 1 per cent. is held by a company which can be relied upon to follow the wishes of company A and 1 per cent. by a company which can be relied upon to follow the wishes of company B. The ITC continues to maintain that such a scenario will not be caught. Our advice is that it will be covered by the formulation which has already been introduced by the Government.

Much would, of course, depend on the exact circumstances behind such a corporate structure, but it could be covered in two ways. Such a case could be caught by the substituted paragraph 1(3)(c) introduced by Amendment No. 176, if the 1 per cent. shareholders could each be regarded as nominees within the meaning of paragraph 2(1) of Part I of the 1990 Act. Such a situation could also be caught by paragraph 1(3)(b) if it was thought likely (in the sense of a reasonable expectation) that A and B would be acting in accordance with each other's wishes. This is because if A and B are acting together, it would be reasonable to expect that they would be able to secure that the company's affairs would be conducted in accordance with their joint wishes. Likewise, it may be reasonable to expect, depending on the circumstances, that B would always act in accordance with A's wishes. The 2 per cent. part-shareholding would be completely irrelevant in company law terms unless allied with A or B.

The amendments tabled by the noble Lord, Lord Donoughue, and the noble Baroness, Lady Dean, would treat each of the parties to the arrangement as controlling the company. That could produce some unwelcome, and possibly even absurd, results. That is particularly the case when one considers that, under these amendments, the word "arrangement" would be defined to include any agreement, arrangement, expectation or understanding, whether or not it is legally enforceable.

The crux of the problem with these amendments lies in the scope of the expression "any specified matter" to which an arrangement could relate. Shareholders or joint venture partners enter into all sorts of arrangements, and indeed have myriad expectations which, in our view, it would not be proper to catch.

Perhaps I may illustrate the problems by means of the following examples. If a large number of small shareholders together holding 50 per cent. of the shares have an informal understanding that they will seek to ensure that no director earns more than £500,000, the amendments would treat each of them as controlling the company.

A funding shareholder who retained a right of consent to any change in the name of the company could be deemed to control that company even though its name would make no difference at all to the way in which its affairs were conducted and would be immaterial in terms of our Schedule 2 concerns.

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I have just given two examples and, if noble Lords wish, I can give others but I shall wait until I am asked. I hope that what I have said will serve to demonstrate that the amendments would give the regulators unnecessarily wide powers. As I have explained, the Government have already introduced amendments which should cover the specific abuses of deadlocking and joint control which lie at the heart of the regulators' concerns. Those are the reasons why the Government do not therefore support Amendments Nos. 176A to 176K.

I now turn to Amendments Nos. 174A, 176L, 177A and 177B which have been tabled by the noble Lord, Lord Donoughue, and the noble Baroness, Lady Dean. The amendments have also been inspired by the ITC and are designed to exclude bare and custodian trustees from the provisions for participation and control. The Government accept the case for excluding such trustees from the media ownership provisions, but we have been advised that although the amendments include a reference to custodian trustees, they omit a number of other categories of trustee which should also be exempted from the media ownership rules.

I also understand that the expression "exempt custodian interest" may not work in relation to the shares in companies incorporated elsewhere in the European Economic Area or in Northern Ireland. It would apply only to shares in English, Scottish or Welsh companies. Clearly, the policy should be capable of applying to the shares in any company incorporated anywhere in the EEA. I also understand that, for the purposes of the Companies Act, an exempt custodian interest is disregarded for the purposes of the statutory notification obligations only if the person concerned is not entitled to exercise, or control the exercise of, voting rights in respect of the shares in question. The amendments would disregard these interests even if the voting power attaching to them was exerciseable, thus creating a loophole.

In view of those defects, the Government have therefore tabled an alternative amendment, Amendment No. 177C, which is couched in broader terms and which will ensure that the policy is carried through. Still further consultation with the ITC's legal advisers has, however, revealed that even this amendment is defective in being unclear in its application to non-voting shares. It is for those reasons that I have tabled a manuscript amendment this afternoon, to which I have referred, to put the situation right. I apologise that it has been necessary to table the amendments at such a late stage, but I hope that in the light of the explanation that I have endeavoured to give as clearly as I can to your Lordships, the noble Lord, Lord Donoughue, and the noble Baroness, Lady Dean, will agree to withdraw their amendments in favour of the Government's Amendment No. 177C, as amended. I can assure them that I have been advised that the ITC's legal advisers are now content with the substance.

I have spoken at some length about a complicated and convoluted state of affairs. I hope that the conclusion I have reached is clear and satisfactory to your Lordships. I beg to move.

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Moved, That the House do agree with the Commons in their Amendment No. 171.--(Lord Inglewood.)

4.30 p.m.

Lord Donoughue: My Lords, we wish to thank the Minister for the attention and work that he has given to the matter. I shall now speak to our amendments, the purpose of which was to make the Act work. We saw in one case of deadlocking, devices to evade and in another case, that of the bare trustees, unnecessary bureaucracy. The problem with all those is that the law is often imperfect in being comprehensive, so we have difficulty in keeping up with the problem, just as I have difficulty with keeping up with the pace of the Government's amendments.

Both sides are working towards the same objective and we are quite happy to accept what the Government said and what they propose in order better to achieve what we imperfectly sought. We shall therefore be happy not to move our amendments.

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