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We have some of the finest television in the world. If it is not the envy of the world, it should be, and we should be proud of what we produce. Why do we have such a great creative heritage? Is it because our airwaves are different from those of our competitors? Is it because the equipment on which we receive our television pictures or radio broadcasts are different from those of our competitors? Or is it because the owners of our media are nice and more philanthropic than our competitors? I would say, probably not.
The reason is our strong tradition of public service broadcasting. We have not just the BBC and Channel 4 but, through our regulatory system, our commercial broadcasters have a set of public service obligations. The Bill must safeguard those public service obligations and, in some cases, probably strengthen them.
I welcome the Bill. It seems to have struck the right balance between regulation and protection of our media industry. I shall concentrate on three areas: first, content and content regulation; secondly, public service broadcasting; and, thirdly, the structure of regulation.
Content occupies much of my working life. I am a television producer and, when not in your Lordships' House, spend my energies thinking about how to entertain and make people think, producing programmes that I believe will stimulate the British public, as well as people abroad.
Like my noble friends Lord Puttnam and Lord Bragg, I take ideasconcepts. We add words to pictures and, at the end of it, we produce a bit of magic. So great is that magic that the Bill must regulate the people who publish, broadcast and seek to own it.
I want to talk about the independent production market. It provides some of the best, most popular and challenging television programmes world-wide. The independent production market was established with the advent of Channel 4 and it has developed by the application of a quota system.
It is clear that one of the points of contention about the Bill is that of the proposed changes to the media ownership rules. If we are to accept ever greater vertical integration and investment from overseasthat is a big ifthe responsibility to protect and strengthen the UK's creative sector becomes ever more important. The real danger is that the UK production industry becomes dominated by vertically integrated,
It is with that in mind that the ITC's recently published programme supply review was so welcome. I shall not bore your Lordships by repeating its recommendations, but I hope that my right honourable friend the Secretary of State will keep her beady eye on the broadcasters as we develop the codes of practice that it recommends.
I also give notice to my noble friend Lady Blackstone that I intend to press to change the quota from being based on hours to being based on value and volume. I also intend to ask her to include BBC Radio, which is currently excluded from the quota system. I hope that she will sympathetically consider those changes.
While we are dealing with quotas, I have just one complaint. Here is my bauble for the Christmas tree. It is totally unacceptable for the BBC not to meet its quota obligation for the second year in a row. I hope that Ofcom will look long and hard at how the quota system is operated by the BBC.
Enough of quotas, and back to ideas. As producers, we trade in ideas. Ideas are the life blood of the creative industry. There has been an alarming rise in the number of ideas from independent producers and others that find their way onto the screen because an enterprising broadcaster feels that it does not need to reward the originator. That is the biggest threat to the creative industry.
It was a situation not dissimilar to that which led to the establishment of patent laws in the 18th and 19th centuries. Energetic engineers were spending large amounts of time and money overcoming problems and coming up with solutions to problems, only to find that their ideas were being easily copied and sold by companies who did not have to spend a penny on development.
For a short while, that benefited the big guys. But our wiser ancestors realised that it was not in anyone's interestpeople would just stop inventing. So they came up with the idea of registering people's ideas.
It is time for us to consider a system for registering TV ideas. I wonder whether the Minister would consider working with Ofcom to develop such a register of ideas, which would at least provide the basis of protection.
I am a great advocate of public service broadcasting, and I have one warning for noble Lords when considering the Bill. It is easy to denigrate the BBC and Channel 4. Only a few years ago, the cry from the commercial sector was that the BBC was failing and that we should redistribute its licence fee. How things have changed. Much is due to the foundations laid by my noble friend Lord Birt, the inspired leadership of Greg Dyke and the commitment to public service broadcasting of Gavyn Davies.
The BBC, like Channel 4, is there, as has been said by countless speakers, to inform, educate and entertain. Greg Dyke recently tried to develop those values and came up with six values that he believed should guide the work of the BBC. I think that they are as applicable to the Bill as to the BBC.
First and foremost, he said that trust is the foundation of everything that we do, that we should safeguard independence, impartiality and honesty; secondly, that the audience should be at the heart of everything we do; thirdly, that we should take pride in delivering quality and value for money; fourthly, that we recognise that creativity must be at the centrethe life-lineof the organisation that we try to build; fifthly, that we respect and celebrate our diversity; and, lastly, that great things happen when we work together.
That brings me, finally, to Ofcom. It has a heavy responsibility to safeguard those values. I have worked with regulators in the pastprimarily the ITC but also the Radio Authority, the BSC and many others. It is a tough job and the temptation to give in to commercial pressures is great. Witness the consolidation of ITV or the "News at Ten" fiasco.
We must make sure that the noble Lord, Lord Curriehe is no longer my noble friendand Stephen Carter, the new chief executive of Ofcom are given the best opportunity to make Ofcom work. But they must be resourced properly. The idea that putting together a number of regulators under a single office should yield synergy savings is misguided. Arbitrary talk of a 25 per cent reduction in costs is dangerous. Cheap regulation is just that. It will be pliable, easy to manipulate and, in the end, a busted flush.
I urge the Minister and her colleagues in the DCMS to ensure that Ofcom is properly resourced, for it has a monumental task. This Bill has been a long time in the making. I wish it safe passage and look forward to dealing with more of the detail in Committee.
Baroness Gould of Potternewton: My Lords, like the noble Lord, Lord Addington, I shall comment more narrowly than many others. I wish to concentrate on clauses that have not yet been mentionedClauses 117 to 121. They are a small but important part of the Bill. The regulation of premium rate services is of crucial importance to consumers who suffer considerable distress when those services are misused. I declare an interest as a member of the Independent Committee for the Standards of Supervision for Telephone Information Services (ICSTIS). For the past 17 years, it has been the regulatory body responsible for premium rate services (PRS).
By way of background, PRS services are used by an increasingly cosmopolitan group of service providers. Services include voting on TV shows, competitions, chat and adult services, horoscope lines, Visa, government agency services, sport, weather and directory enquiries. PRS was the mechanism used for allocating tickets for the Golden Jubilee concerts at Buckingham Palace last year. PRS is also used for pay-to-play charges for game channels on digital television. Services can be accessed on land lines, mobile phones, interactive digital television and the Internet. At present, calls cost from 10p per call to £1.50 per minute. The money paid for calls is shared by the telephone companies carrying the service and the organisation providing the content.
ICSTIS is the largest co-regulatory body dealing with converged services in the communications field. It is funded by a levy on the industry and currently receives back-stop support from Oftel through telecom licences. Those licences place certain obligations on telephone companies when making available premium rate services.
ICSTIS regulates the content and promotion of services through its code of practice, which allows it to investigate complaints, to fine companies and to bar access to services. In 2002, ICSTIS dealt with 150,000 enquiries and investigated more than 10,000 complaints dealing with 99 per cent plus of all PRS complaints. As a result, it closed down around 100 services and levied fines totalling around £1 million. However, that should be set against a background of an industry that has tripled in value in three years to be worth nearly £1 billion. The UK PRS market is the largest in the world. It is now significant in its own right in the communications sector. Regulatory failure would be commercially significant.
I make those points, first, because there is a lack of knowledge about what PRS is, but, perhaps more importantly, to illustrate how crucial it is that the Bill continues to allow absolute protection for consumers using premium rate services.
The creation of Ofcom has implications for the regulation of premium rate services. Although not part of Ofcom, ICSTIS will need to establish new relationships to replace existing ones with Oftel and the other bodies merging to form Ofcom. It is crucial that the arrangements underpinning the effectiveness of ICSTIS's regulatory regime are recreated in the Bill. It is particularly important, because the means by which ICSTIS currently receives support from Oftelthrough telephone licencesare being swept away under the Bill.
The Bill will affect ICSTIS in several ways, as defined in Clauses 117 to 121. Ofcom will assume statutory back-stop powers in case a network fails to fulfil its obligations to ICSTIS under the Bill. The Bill will also affect ICSTIS's funding and the definition of the stakeholdersnetworks and service providersthat it regulates. To ensure continuity of regulation, ICSTIS has worked with mobile phone companies in tabling amendments that received cross-party support
So far, the amendments have ensured that the Bill maintains ICSTIS's holistic approach to effective regulation in so far as it deals with premium rate promotions, the marketing of services and the content of services. They have also ensured that the legislation maintains the important role in effective regulation played by the telephone companies when it is necessary to terminate access to services and to withhold revenues. However, the Bill requires further changes to ensure that their effectiveness is not undermined.
By parliamentary convention, the Bill is limited to activities undertaken in the UK by providers of premium rate services. However, many of the problems that ICSTIS deals with emanate from the global market-place. All too often, they involve services providing such material as child pornography, which must be dealt with speedily. Recently, ICSTIS had to stop the operation of Internet services in Spain and Germany using deeply offensive marketing and "corrupt" dialer technology designed, without doubt, to trap people into incurring bills of several hundred pounds. If the Bill and the supporting code of practice cannot address that, there is a serious threat that many providers of such services will simply, and at little cost, relocate outside the jurisdiction, thus creating grave consumer harm in a way that will be unregulated. That would damage the reputation of companies that provide useful services to the public.
The Bill is also designed to ensure that all companies in the value chain providing premium rate services are clear that ICSTIS regulates "service providers"companies that contract with telephone companies for their numbers. But the system does not allow for regulatory evasion through the creation of intermediary bodies. All companies contracting telephone numbers from networks must remain under ICSTIS's authority if it is to continue to be effective. If the draft provisions appear not to achieve that, I hope that the Government will be ready to make any further necessary amendments.
A key focus of ICSTIS's work in 2003 will be increasing media literacy among consumers and those working with them. That means informing and empowering consumers so that they are better able to understand how premium rate services work on a variety of platforms and a range of devicesthe Internet, digital interactive TV and mobile messaging services. ICSTIS wants consumers to know what to look for when deciding whether to use a premium rate service. It also wants them to know how to protect themselves and their families from unwarranted contact or harmful content by using call-barring or filtering devices.
An informed, confident consumer is the key to preventing consumer harm and increasing confidence in PRS as a billing mechanism. When the pace of technological development outstrips consumer knowledge there is potential for consumer harm.
Child protection from consumer harm, inappropriate content and contact with strangers, especially through the Internet, is of particular concern. It is not easy to wrestle with the difficulties raised by the Internet dimension, but they must be faced. We must foresee a time when the analogue signal is turned off and practically every house in the country has a digital TV with Internet access. Such sets will soon find their way into children's bedrooms.
Because the future can be seen so clearly, we should also put the industry on notice that it should produce a code of practice, as with video on demand, to show how it intends to grapple with the child safety agenda raised by the ease of Internet access. I appreciate that the content board will have the responsibility of considering that area, as will the Home Office Internet task force on child protection. Child protection would benefit, if the sentiment were included in the Bill, and there may be amendments to that effect. We cannot let such an important matter slip out of sight.
Baroness Hogg: My Lords, I start by declaring an interest as a governor of the BBC. As such, my desire today is to listen to the great range of expertise in your Lordships' House, including to those on whom, I hope, the BBC governors can count as candid friends.
But I also hope that your Lordships will allow me to make three brief points. The first is a personal tribute from one whose years of journalism were conducted from the safety of an office desk. At a time when our thoughts are with our Armed Forces, we are also reminded that the job of war correspondent is dangerous, as well as difficult. It is also an essential part of the apparatus of a free democracy. Technology has not made warfare or communication free from personal risk.
Secondly, in welcoming the creation of a single economic regulator and the appointment of its excellent chairman, I must make clear my view that the remit should cover the BBC. Economic regulation, which is essentially concerned with the way in which organisations compete, must embrace all of them. I make a distinction between that and the BBC's public
My third point is about that system of independent governance. I declare a specific interest, as a member of the audit committee of independent governors of the BBC. As members of other boards have discovered, the authority of the audit committee over the management of an organisation is crucial to good governance. Authority over the audit process is critical, as are the board's right to appoint external, independent auditors and the responsibility of those auditors to the audit committee.
I am concerned, therefore, at the suggestion that the right to appoint independent and external auditors might be taken away from the governors. We must be clear: that would be the effect of putting in the National Audit Office instead. The NAO would not, and could not, be accountable to the audit committee of the governors. It would not, and could not, take instructions from the audit committee, whose authority over the audit process and the management would be severed. I am advised that it would create a line of accountability from the director-general of the BBC to the Permanent Secretary of the Department for Culture, Media and Sport. That would be a significant change in the governance of the BBC.
I have the greatest respect for the NAO and the work that it does in investigating whether government departments deliver government policy cost-effectively. But the BBC is not a government department, and I am anxious that, even with the best of intentions, your Lordships should not push it further under the wing of Whitehall. Moreover, the BBC needs a range of expertise in its external auditors that the NAO does not, and could not, have. Indeed, the NAO might have to call on such expertise, possibly from the auditors that we use at present. In passing, I would add that Sir Robert Smith, the Government's chosen expert on audit, has joined the BBC audit committee and has given me permission to say that he shares my concerns.
I do not claim perfection for the BBC's system of governance, by any means. I believe and hope that, at charter renewal, the checks and balances of independent governance will be thoroughly evaluated. That will be the proper moment to consider the big step of bringing the BBC within the ambit of the NAO, should that be your Lordships' view. In the mean time, I point out that an independent review of the BBC's financial reporting was carried out for the DCMS in 2000, and that there was a review of its fair trading arrangements in 2001. There is, however, still more that the BBC could do to publish information on how value for money is assessed. With the chairman of the audit committee, I have recently been involved in leading some work on that for the governors. If he were here, I could assure my noble friend Lord Crickhowell that some elbow-jogging would not be unwelcome. Perhaps we can return to that in Committee.
I hope that I have not tried the House's patience by raising the point at so early a stage. It is up to Parliament to decide whether, at charter renewal, it wants to overhaul the BBC's governance. Meanwhile, in building up a strong audit committee, I believe that we are not only following best practice but strengthening the hand of the governors. I ask noble Lords, in considering the Bill, not to chop off that hand at the wrist.
Baroness Walmsley: My Lords, I shall concentrate on two subjects. The first is the matter of access radio. The Bill takes tentative steps towards assisting the development of community media in the UK. It provides for the introduction of a new type of not-for-profit radio licence. That is what is commonly called "access radio".
Community media have developed in exciting ways in the UK in the past few years. Radio stations have been established by not-for-profit organisations right in the heart of communities and have forged productive partnerships. It is the residents themselves who run the radio stations, make the programmes, present the local news and run community campaigns. They offer something different from what is offered by commercial radio stations. If the Government's objective is to promote social inclusion and give people a voice and a chance to make a difference in their community, there can be no better tool than access radio. The Bill presents an opportunity either to support and stimulate it or to strangle it at birth. I trust that it will be the former.
Noble Lords may be aware that I am a BBC widow. My late husband was a BBC radio producer with GMR, the Manchester-based local radio station. Nearly 15 years ago, GMR ran an experiment in neighbourhood radio. For three months, my husband ran a station based in a large caravan trailer in a school playground; it was called Radio Trafford. Although he had a long and distinguished career in local radio, he found it one of the most enjoyable and rewarding periods of his career. That was because of the warm response of the local people and their appreciation that their local radio station had made the effort to come to them. However, it was a short experiment and did not have the chance to achieve the social benefits that the recent pilots in access radio have done.
Today, we are addressing the need for licences and wavebandsnot for BBC experiments but for the not-for-profit stations that have already shown their power to deliver social change. I shall give your Lordships some recent examples, also from the Manchester area. In 2001, Nadia Ali, an unemployed single mother from Longsight, responded to a flyer about a two-week trial broadcast for ALL FM. Soon, she was presenting a daily afternoon show, playing music and discussing the concerns of her neighbourhood from the point of view of someone who had lived there all her life. She raised the sensitive issue of forced marriages in the Asian community and, when she interviewed city council leader, Richard Leese, her questions came from the neighbours on her
Longsight is part of the target area of ALL FM and has at least two active armed street gangs. These are not "organised" criminals, but young men who have embraced a criminal lifestyle in which loyalty and fear is enforced by the gun. There have been many deaths and woundings of both gang members and innocent passers-by. There is now a backlash from families and friends of the dead; these good people have been given an unparalleled platform by ALL FM which has contributed to the recent success of their "Gangstop" march and associated public meetings.
Part of Wythenshawe FM's "patch" is Benchill ward, which has the dubious distinction of being the most disadvantaged ward in the country. The whole area is beset by social disadvantage, including appalling levels of domestic violence. When women were killed by their partners in Wythenshawe over Christmas 2001, the groups and agencies concerned decided to increase the support available to women at risk. They teamed up with Wythenshawe FM to publicise these services. Last December, the station ran an intensive campaign on the subject for a week, with programmes made by local people. The station knows of at least nine women who asked for assistance as a result of that work and one of them even dropped in to give her personal thanks to the team that helped her to get away from her abusing partner.
Local people know the value of access radio, but there has also been an independent evaluation of its benefits by Professor Anthony Everitt. His recently published report stated that this kind of radio will be one of the most important cultural events of recent years. And no wonder; look at the benefits.
First, these stations develop individual skills in members of the local population and boost self-esteem and ambition. Secondly, they provide an effective information infrastructure for the locality, address negative images and provide a voice for under-represented groups. Thirdly, they provide an acceptable and effective delivery mechanism for mainstream services, such as the police, schools and social landlords.
Given all those good things, there can surely be no opposition to the further development of this sector. However, there are threats in this Bill. The first and most significant is the lack of priority for frequency allocation. There is a shortage of FM frequencies available for any new stations, but surely we do not need any more commercial ones playing the same old chart hits.
Secondly, there is a wastage of frequency capacity due to BBC control of significant parts of the waveband, particularly in its reserving frequencies in its national sub-bands. That allows BBC national stations to be heard on different frequencies in different parts of the country, without allowing other use of the unused bits of frequency. I am a gardener and am very familiar with the concept of planting radishes between the cabbages to use all available ground in a small vegetable patch. Perhaps we should envisage the FM waveband as a small vegetable patch and allow small community radio stations, broadcasting to a small geographical area, to use those bits of unused FM frequencythe bits between the cabbages. The benefits will be huge. I call on the BBC to co-operate with this idea and on Ofcom to promote it.
Given the massive delivery of social gain and the protection of regional diversity demonstrated by these stations, what reassurance can the Minister give me that Ofcom will recognise this and prioritise the provision of enough FM frequency for access radio?
Finally, I turn briefly to the plight of Britain's music creators. Our songwriters, composers and musicians are the envy of the world. We must do everything we can to protect them and enable all of us to benefit from their talents. However, there is much concern about the impact upon them of deregulation in the radio sector.
For the music industry, further consolidation in the commercial radio sector will only increase the risk that there is less diversity of music on independent local radio and mainstream airwaves. However "local" is defined, local radio must be a vital route to national exposure for musicians and writers. I am therefore anxious that local music-writing and performance is protected. We must ensure that there is a counterbalance to the power that deregulation might give to the larger commercial radio players to control access to, and thereby success in, the UK music market.
As drafted, the Bill gives Ofcom a general duty to promote and protect the local "content and character" of local radio, specifically news. However, the current definition of "local material" in the Bill regrettably fails to provide the crucial safeguard for music creativity and diversity.
What does the Minister believe will be the impact of this legislation on our music makers and how does he intend to ensure that our music industry continues to thrive for the benefit of us all following the passage of this Bill?
Baroness O'Neill of Bengarve: My Lords, this vast and complex Bill is needed because of changes in communication technologies and their uses and it proposes large changes in their regulation. The regulation is charged to Ofcom, and to the noble Lord, Lord Currie, to which the Bill assignsto Ofcom rather than to the noble Lordonly two general duties. Those duties are set out in Clause 3(1):
As we all know, the communications industry and the media are not businesses like any other. They are fundamental to culture and to politics and their products are not mere items of trade. Their power is enormous. I believe that it is also widely recognised that, at present, the ways in which that power is exercised are not entirely satisfactory. Writing in Prospect last October, the distinguished journalist John Lloyd observed that,
Freedom of expression also sits ill with some current uses of press freedom. Freedom of expression is a protection for the individual, for the powerless and, above all, for the citizen. I know of no good reason to suppose that powerful corporations, including media conglomerates, should have unrestricted freedom of
Nowadays it is the third argument for freedom of the press that is most compelling. The most serious aim in configuring freedom of the press is to ensure that it serves democracy by fostering robust debate in which a plurality of voices can make themselves heard. Any configuration of freedom of the press that does not serve this aim is not adequate.
We shall have to ask ourselves whether the proposed regimes for cross-ownership and foreign ownership, and other safeguards contained in the Bill, are robust enough to secure these fundamental aims. We should also ask whether Ofcom should be charged with an explicit and general duty to further the public interest by ensuring that a plurality of voices can be heard and take part in all forms of public communication. I believe that citizenship is more fundamental than consuming.
Lord Gordon of Strathblane: My Lords, it has been a long time since December 2000 and the publication of the White Paper. However, I venture to suggest that we have all benefited from the delay in the production of the legislation and its postponement by the Government from a previous parliamentary Session to the current one.
It has been beneficial for two reasons. First, the world has changed in that period. When the White Paper was produced we were at the height of the dot.com bubble; we were all talking about convergence and that it was all going to happen tomorrow. We all know now that it will not happen tomorrow. The take-off of digital radio is still painfully slow. We all hope that it will happen, but it is not happening at a very fast rate. Secondly, it has yoked together DCMS and DTI for another Session, where they will have to work in tandem to safeguard the Bill. That will be highly beneficial.
The fact that the Bill has been around for a long while and that there have been various seminars and so on over the past couple of years does not mean that it has been subjected to a great deal of scrutiny. Obviously the Puttnam committee did a great job. If ever we needed a positive advert for pre-legislative scrutiny, the noble Lord, Lord Puttnam, and the members of his committee have provided it. I thank them for their efforts. It is perhaps unkind to say that if ever we looked for a negative justification for pre- legislative scrutiny, it would be the absence of it in the Licensing Bill which recently passed through the House. In much the same way, finishing at 2.26 a.m. today, as I did, was a negative justification for the reforms I am glad the Leader of the House introduced last year which ensure that we normally finish at about 10 o'clock.
A great many things have changed since the Puttnam committee sat and some clauses have not been subjected to scrutiny at all. I declare an interest as chairman of Scottish Radio Holdings. Clause 307 had never been heard of until after the ownership rules were changed. It was then brought in to define in micro-detail the inputs required to produce localness. In my view, we should scrap that clause in its entirety and go back to the way in which we all thought Ofcom was going to workand, indeed, the way in which I believe it wants to work. It will need to define the objectivethat is, the presentation of localnessand work together with the industry, through co-regulation, to deliver that objective.
The powers given to Ofcom to enforce localnesswhich includes ensuring that studios are in the right place, that there is enough local advertising, that enough local people are employed and so onamount to micro-management. That is not the business of Ofcom. However, that is what has been laid down. In defending it in another place, Kim Howells said that the fact that Ofcom may do it does not mean that it will do it. On that basis you could give local authorities the nuclear deterrent to enforce planning decisions. We do not want it to operate in that way.
I fear that there is also a Parkinson's law of regulation, which means that regulators will increase to fill every regulatory post and still ensure that they are understaffed. Regulation will multiply. Despite the considerable efforts of the noble Lord, Lord Currie, there will be a tendency for people to say, "Lord Currie, I must point out that the statute requires that X, Y and Z must be ticked, ticked, ticked before we do anything".
I take issue with my friends on the Liberal Democrat Benches. I feel that I am coming from the same place as they are and it distresses me that we are seeing things from a totally different viewpoint. I have mentioned my connection with Scottish Radio Holdings. If I now speak in its praise it is not by way of boasting of achievement but simply to say that Radio Clyde in Glasgow, which I started some 30 years ago, has a bigger audience than Radios 1, 2, 3, 4, 5 and Radio Scotland put together.