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Office of Communications Bill [HL]

8.42 p.m.

House again in Committee on Clause 2.

Baroness Miller of Hendon moved Amendment No. 14:

"(c) harmonises regulation between the existing regulatory regimes;

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(d) reduces sectorial regulation to the minimum; and
(e) promotes the efficient use of resources by taking due notice of--
(i) areas where duplication of activities by existing regulators enables economies to be made; and
(ii) current activities of existing regulators which may be discontinued or pursued with fewer resources as a result of the increase in competition in the telecommunications and broadcasting industries."

The noble Baroness said: Again, this is a probing amendment. We are seeing in this Bill the amalgamation of the functions of five regulators, each supervising a major segment of the communications industry. Furthermore, competition between telecommunications and broadcasting is increasing. It is not merely competition. In many respects they are beginning to overlap, and the distinctions between them are beginning to blur.

People can send e-mails, order goods, do their banking and pay bills via their television sets, and it is possible to receive television broadcasts down land lines to a desk top computer or even to a mobile phone.

This amendment seeks to ensure that in setting itself up Ofcom reduces the overlap between its separate divisions. No less important, it ensures that whatever differences of approach and emphasis may exist at present, in the new super regulator that we are creating the same rules should apply to all segments of the industry.

The proposed new paragraph (e)(ii) enables Ofcom's board to ensure that it forbears from enforcing conflicting rules as a prelude to their removal or harmonisation under the new regime. At present, regulators have a duty to enforce their powers, even obsolete ones. This paragraph may also encourage the use of the general competition law wherever possible.

The Towers Perrin report, which was commissioned by the five regulators being replaced by Ofcom, identified very little scope for reducing headcount or expenditure. Perhaps that is not surprising. Without impugning in any way this excellent report, it would have been surprising if the authors had come down in favour of those commissioning it looking at ways to downsize themselves. An image of turkeys and Christmas comes to mind.

Nevertheless, it is the responsibility of Parliament to instruct the new regulator that it is his responsibility to take advantage of the new harmonisation of functions which should be accompanied by a reduction in size and a reduction in the resources required to perform the amalagamated functions of the five regulators. That inevitably happens in the commercial world when there are mergers. There is absolutely no reason why a well-run and efficient new regulator should not be able to do the same.

As I said at the beginning, this is a probing amendment. I shall listen with great interest to what the Minister has to say. I beg to move.

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8.45 p.m.

Lord McIntosh of Haringey: I have very good news for the noble Baroness, Lady Miller. I begin by saying that we are entirely in sympathy with the objectives of the amendment. But the good news I have is that it is already happening. The noble Baroness referred to the Towers Perrin report and was kind enough to say that it is excellent. But that report exists because it was commissioned, as she said, by the five regulators. They have been working very closely together. My noble friend Lord Dubs is not with us at present. As chairman of the Broadcasting Standards Commission, he knows from first hand experience. Indeed, he said earlier today that a group that has been meeting for many months is making the preparations for which this amendment calls. Each member has signed a memorandum of understanding to share information and, where there are common interests, to develop policy issues together, including those of competition and convergence. The group has also resolved to establish mechanisms to ensure that complaints are handled in order to avoid double jeopardy wherever possible.

During this transitional phase it is important that the existing regulators are able to carry on with their current duties without interference from Ofcom. That is the purpose behind the provision of Clause 2(2)(b) which will prevent Ofcom from interfering with the effective carrying out by the existing regulators of their current functions. However, in taking the practical steps which are necessary to set up Ofcom, we will expect it and the existing regulators to examine activities which may no longer be necessary and where savings may be achieved.

The noble Baroness is entirely right in saying that the Towers Perrin report has not identified very large areas of savings in money or headcount. But I believe that as the five regulators work together in assessing the report and its implications it may well be that there will be opportunities which have not yet been identified. I believe and hope that the provisions in the Bill and the memorandum of understanding which I have referred to are preferable to putting obligations of this kind on the face of the Bill. On that basis I hope that the amendment will not be pressed.

Baroness Miller of Hendon: I thank the Minister for that very helpful, comforting and reassuring reply. Under the circumstances I am pleased to withdraw the amendment.

Amendment, by leave, withdrawn.

Baroness Miller of Hendon moved Amendment No. 15:

    Page 2, line 36, at end insert--

"( ) In fulfilment of the functions set out in subsection (1), OFCOM shall have regard to the need (subject to subsection (2))--
(a) to ensure fair and effective competition in the provision of services provided within the communications industry and those connected with them; and
(b) to ensure needs of consumers are protected with regard to both economic considerations and access to communications services."

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The noble Baroness said: One of the central planks of the White Paper was to make the United Kingdom home to the most dynamic and competitive communications and media market in the world. Indeed, when introducing the Bill on 15th October, the Minister used those very words. She went on to tell your Lordships that it would,

    "ensure universal access to a choice of diverse, high quality services and proper safeguards to protect the interests of citizens and consumers".".--[Official Report, 16/10/01; col. 597.]

That is a great mission statement for a regulator in the 21st century and one with which we wholeheartedly concur and support.

It is a clear target and an achievable aim, and something which the new regulator and his organisation can be proud to have as their objective. It should be at the heart of the role of the regulator and should be the criteria against which every one of his actions and decisions should be judged.

Some communications companies have been concerned about the balance between content and economic regulation. The amendment, by giving equal weight to paragraphs (a) and (b), strikes the right balance. It enshrines the ambition of the Government as a key function of the new regulator and should be welcomed by all those who are involved with the communications industry, whether as operators, stakeholders or consumers. The White Paper said that the objective was to protect the interests of consumers in terms of choice, price, quality of service and value for money by, in particular, promoting open and competitive markets.

Members of the Committee know that the Government have said much about safeguarding the interests of citizens and consumers but, sadly, nothing to that effect appears in the paving Bill. This Bill is, after all, the blueprint of the substantive operative Bill, which will eventually be published. It is also strange that the premium rate services regulator, which is known by the acronym ICSTIS--the Independent Committee for the Supervision of Telephone Information Services--has been left out of the Bill. In terms of strengths, it is a valuable test of the way in which content regulation might be applied. We should welcome clarification from the Minister on that and on whether Ofcom will be able to act when a question is raised about the regulation of entertainment services that are delivered down the telephone at premium rates.

I shall summarise the amendment's purpose. If the regulator is being charged with the responsibility of protecting the welfare of consumers in the communications sector, that duty should be enshrined in the definition of his principal role and functions. I beg to move.

Lord McIntosh of Haringey: I am grateful to the noble Baroness for moving the amendment. I am rather relieved that attention is being paid to the communications side; so much of the emphasis in our debate has been on the broadcasting side, and it is

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refreshing that the noble Baroness has paid attention to the communications aspect of regulation, which will, in the fullness of time, become the responsibility of Ofcom. The White Paper runs very much on the same lines as the amendment; the amendment could almost have been taken from the White Paper.

The White Paper made it clear that promoting effective competition and protecting the interests of consumers in terms of choice, price, quality of service and value for money will be part of Ofcom's central regulatory objectives.

My only qualification involves what I shall call "the dusty answer", and which I shall use now and on future occasions. The dusty answer is that the sole responsibility of Ofcom, as that is set out in the Bill, is preparation for regulation when the substantive Bill has been enacted. The only function that this Bill will confer on Ofcom is that of preparing itself to take on other functions at a later date. Thank goodness the noble Lord, Lord Peyton, is not here--he cannot explode with rage at that definition! However, that is what the Bill has been about from the very beginning. The truth is that Ofcom will not exercise any regulatory functions at this stage, and it will not be in a position to ensure competition or to protect consumers--desirable as those aims will be--when it is carrying out regulation.

The noble Baroness raised a couple of specific points, the first of which was about emergency services and entertainment services being fed down telephone lines. Those matters will be covered broadly to the same extent as is done under the existing system. The detail of the way in which that should be done will be in the main Bill--that has been the procedure in relation to many other matters.

The noble Baroness asked about ICSTIS. I may have to write to her on that point but I assure her, from personal experience, that ICSTIS is having discussions with the existing regulators, although that is not covered by the Bill. Nothing is being done without consultation with it, when that is appropriate.

I have given, I am afraid, a dusty answer about the amendment's effect and relevance. However, in view of the fact that we have a great deal of sympathy about its objectives, I hope that the noble Baroness will not press it.

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