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Lord Inglewood: I wish to join with the remarks made by my noble friend Lord Derwent about the steps that the Government have taken to ensure wide consultation in this regard.

Perhaps I may take this opportunity to ask whether the Government have any further thoughts about the possibility of the proposed spectrum management advisory group, an idea put to them, I understand, by the industry.

Lord Clinton-Davis: On the international matters to which the noble Lord, Lord Derwent, alluded, this Government have no wish to see our own industry impeded or embarrassed. Indeed, we wish to ensure its success. The very matters to which he has referred should be issues which are discussed openly in the consultation to which I have alluded.

The agency issue to which the noble Lord, Lord Inglewood, referred, is still under discussion. Perhaps I may bring the noble Lord up-to-date on the matter by correspondence. That may be the most appropriate way to deal with the issue.

On Question, amendment agreed to.

Lord Derwent moved Amendment No. 15:

Page 5, line 5, after ("Act") insert—("(a) in the case of regulations under section 1,").

The noble Lord said: Amendments Nos. 15 and 16 relate to the procedures as regards regulations. At present the Bill provides that all regulations under the powers of the Bill should be made under the negative resolution procedure. Such procedure may well be appropriate for regulations made under the powers of Clause 2 of the Bill because those regulations will consist largely of detailed technical considerations of one set of users' spectrum efficiency and therefore the appropriate fee level for that set of users. However, regulations made under the powers of Clause 3 of the Bill appear to be quite different in principle. These regulations will govern the establishment of new radio services in the United Kingdom—services that will form the basis of the future communications infrastructure of the country.

Moreover, the Government have indicated that they anticipate raising sums of as much as £1.5 billion through the auction powers set out in Clause 3. This is a considerable sum, comparable to that which could be raised through a reduction of 1p on income tax, which I believe is £1.8 billion. We therefore believe it appropriate that Parliament should have the opportunity of debating regulations issued under the powers of Clause 3 because of their fundamental and new nature.
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These amendments provide for affirmative resolution procedures for regulations under Clause 3 only. I beg to move.

Lord Clinton-Davis: The noble Lord is right to be concerned about the issues raised in the amendments, in particular the introduction of spectrum auctions, in view of their possible impact on telecommunications services and the amounts that might be raised.

As I have frequently said, we are committed to full consultation before regulations are made under Clause 3 of the Bill. In addition, the government amendment to which I have referred will add a statutory duty to publish a notice of those regulations, including those under Clause 3, and we are under a duty to take those representations fully into account.

There will also continue to be extensive non-statutory consultation, as I have already said, and a consultative document on the introduction of advanced digital mobile telecommunications services—known as "third generation mobile" or the "universal mobile telephone system"—is to be issued which will put forward for comment options for spectrum auctions.

There should thus be ample opportunity for those who may be affected by auction regulations to be alerted in advance and to draw the attention of noble Lords to any aspects of concern. It would then be open to noble Lords to pray against the regulations if those concerns are not met.

I believe that this process of consultation, the statutory duty I have described and the negative resolution procedure should provide a sufficient and appropriate degree of parliamentary scrutiny of the use of the powers in Clause 3. I believe that that view is right because the delegated powers in the Bill were scrutinised by your Lordships' Select Committee on Delegated Powers and Deregulation. In its first report, ordered to be printed on 9th June, the committee reported that:

The committee clearly agreed with the memorandum which we submitted to the effect that the negative resolution procedure was appropriate for regulations made under Clause 3.

I hope that the noble Lord will feel that the way in which the committee dealt with the matter gives emphasis to my points and that the negative resolution procedure is suitable for auction regulations. I hope therefore he will withdraw his amendment.

Lord Derwent: I do not doubt for a moment that there is adequate provision both for consultation with the industry and for the industry to make its views known. But that all lies in the future; it may even be some years ahead. We are not sure of the full ramifications of the regulations that will be made. In view of the very large sums of money that might be involved, it is important to ensure that there is a possibility of debate in Parliament as well as consultation within the industry. It is in a way paradoxical that I should be saying that it is not enough
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to consult with us but that this is a question of wide political interest. Will the Minister explain why he would object to the affirmative resolution procedure for these important points of principle under Clause 3?

Lord Clinton-Davis: I thought I had explained why that is the case; I have obviously not satisfied the noble Lord. My experience indicates that if, in the course of following the consultation procedures which I have explained at considerable length, the industry comes to the conclusion that something has gone amiss to which Parliament's attention should be directed, it is rare that industry is slow to advise Members of your Lordships' House or honourable members in another place, with a view to their raising the matter. The fact that we are not arguing for the affirmative resolution procedure does not mean that we are against scrutiny; but it seems to me that it will be inappropriate, particularly where these are complex matters which will undoubtedly be the subject of full consultation with the industry, to deploy the affirmative resolution procedure in the circumstances.

Lord Derwent: I should like to study in Hansard exactly what the Minister said and the spirit in which he said it. In the meantime, I beg leave to withdraw the amendment.

Amendment, by leave, withdrawn.

[Amendment No. 16 not moved.]

Lord Clinton-Davis: I believe I owe an apology to the noble Lord, Lord Inglewood. I had said that we would come to the question of the position of utilities. I am sure that it has some relevance to this which escapes me. Perhaps I may say, in case I am right about that, that it is not our intention that the introduction of spectrum pricing should affect the access of utilities to the radio spectrum that they require. That, I think, was the point that the noble Lord adverted to earlier.

Lord Inglewood: I am most grateful to the noble Lord, Lord Clinton-Davis. I was congratulating myself on having got my point in. I thought he had more or less addressed it when we previously touched on the matter.

Clause 6, as amended, agreed to.

Remaining clauses and schedules agreed to.

House resumed: Bill reported with amendments.

Satellite Television Service Regulations 1997

4.46 p.m.

Lord McIntosh of Haringey rose to move, That the draft regulations laid before the House on 18th June be approved [4th Report from the Joint Committee].

The noble Lord said: My Lords, these regulations have been laid before your Lordships' House under Section 2(2) of the European Communities Act 1972. The purpose of the regulations is to implement a judgment of the European Court of Justice concerning
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the UK's implementation of Articles 2(1), 2(2) and 3(2) of the 1989 EC Broadcasting Directive, perhaps better known as the television without frontiers directive.

The court found that the United Kingdom had failed to fulfil its obligations under the directive, first, by misinterpreting the basis on which satellite broadcasters fell within UK jurisdiction; secondly, by applying different licensing regimes to domestic and non-domestic satellite services; and, finally, by exercising control over broadcasts transmitted by broadcasters falling within the jurisdiction of other member states of the European Community.

The Broadcasting Directive is a single market instrument which governs transfrontier television broadcasting within the European Community. For it to work effectively it is essential that certain elements are implemented in a common manner by all member states. One such element is the determination of which country should have jurisdiction over a broadcaster.

In the United Kingdom the Independent Television Commission licences and regulates all broadcasters which come under UK jurisdiction, with the exception of the BBC and S4C. From the European Community perspective, the crucial factor is that each broadcaster should come under the jurisdiction of one—and only one—member state. In order to achieve that, it is clearly essential that a single system of determining jurisdiction is in operation throughout the Community. This is where a problem arose. The wording of the 1989 directive was ambiguous. When member states came to implement the directive at national level, differing interpretations of the provisions on jurisdiction were exposed.

In implementing the directive, the UK chose to use satellite uplink as the basis of jurisdiction. That was the criterion used in the Council of Europe's Convention on Transfrontier Television, which predated the directive and was to some extent a model for European broadcasting regulation. However, other member states used the broadcaster's place of establishment.

Establishment and uplink are fairly complex issues, but, in simple terms, a broadcaster's place of establishment is generally held to be the place in which it has its head office and where decisions about programming content are made. Uplink is the technical process whereby programmes are broadcast from a specific transmitter on the earth to a satellite, from where they are subsequently downlinked back to satellite receptors on earth.

The situation did not cause too many practical problems for the UK because the vast majority of services uplinked from the UK are by broadcasters also established in the UK. In 1992, however, the European Commission initiated legal action against the UK on the grounds that, by using uplink as the basis of jurisdiction, the UK had misinterpreted the Broadcasting Directive. That process culminated in the European Court of Justice's judgment last September which recognised that the existing directive was ambiguous but found that establishment was the correct basis for determining jurisdiction. We need now to implement that judgment and these regulations do so by changing the basis of jurisdiction from uplink to establishment.
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We now also have the benefit of the revisions to the 1989 directive, including Article 2, where the ambiguity to which I referred is removed. The revised directive, which was adopted by both the Council of Ministers and the European Parliament earlier this month, states clearly that establishment shall be the basis of jurisdiction, and sets out a hierarchy of criteria for defining the place of establishment of broadcasters. These regulations can now be read alongside this detailed guidance in the revised directive.

I would emphasise that the practical effect of the change is minimal. According to the Independent Television Commission, of the 150 or more broadcasters currently holding satellite broadcasting licences, fewer than half a dozen will be affected.

In the second part of its judgment, the European Court of Justice found that the UK had unlawfully established two licensing regimes for satellite broadcasting. The 1990 Broadcasting Act established two different licensing regimes. Domestic satellite services were defined as those which used UK frequencies and were designed for general reception in the UK. Non-domestic satellite services were those which did not use UK frequencies and were intended for general reception in the UK and elsewhere. The domestic regime required broadcasters to ensure that at least 25 per cent. of transmission time was allocated to independent productions, whereas non-domestic satellite licensees were only bound by the provisions of the broadcasting directive, which requires at least 10 per cent. of independent productions, where practicable. The court's judgment found that the distinction between these two regimes was discriminatory and that the UK was favouring its own viewers by imposing a more rigorous content regime on domestic satellite service licensees.

That had not, in fact, been either the intention or the effect of the UK's distinction between the two regimes. The large majority of the 150 or more licensed non-domestic satellite services use non-UK frequencies but in fact broadcast wholly or mainly to UK audiences. The different domestic satellite regime merely applies to UK satellite frequencies the kind of procedure applied for commercial UK terrestrial broadcasting frequencies; bids for the use of the spectrum and controls on content reflecting the scarcity of the resource.

Nevertheless, under the revised directive the UK clearly must license all satellite broadcasters established in the UK on the same basis. These regulations accordingly remove the distinction between the two types of satellite service. The domestic satellite service will be abolished and the non-domestic satellite service will be known as satellite television service licences.

Here again, the real effect of this change on existing licensees is minimal. There are at present no domestic satellite service licence holders, and there never have been. The new integrated regime may encourage more services to emerge. In particular, the duration of domestic satellite service licences, which requires broadcasters to plan and broadcast for 15 years as opposed to 10 years for non-domestic services, may have acted as a deterrent to broadcasters from using
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UK allocated frequencies. It is in the UK's interest to retain those frequencies and the Government hope that the reduction in the duration of licences will encourage future applications for this resource.

The Government are fully committed to complying with their international obligations. The making of these regulations will enable the United Kingdom to do so in respect of the EC Broadcasting Directive. They will not however have any material effect on the thriving UK satellite broadcasting industry. I commend the regulations to the House. I beg to move.

Moved, That the draft regulations laid before the House on 18th June be approved [4th Report from the Joint Committee].—(Lord McIntosh of Haringey.)

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