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Lord Avebury: I am sure that all Members of the Committee are aware that neither the cable nor satellite operators have any objection to what is in the must-carry list at the moment. The question is whether there should be any additions to the list at this stage or under what conditions there should be additions later.

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Having listened to the explanation given by the noble Lord, I still consider that we know enough about access radio and local digital television to say that we could add those to the list without imposing a substantial burden on the operators. If that is not the case, I am surprised that the Minister is unable to produce figures because they would have had to be produced if such a decision was made following the review of Ofcom. I am certain that within the department there must be some fairly good ideas of what these costs would be and how they would work out. Obviously, we shall not receive a reply on that today.

As regards the first amendment moved by the noble Lord, Lord Lipsey, I understand his point that we should have the level playing field and that there are opportunity costs involved in any additional must-carry obligations that may be imposed on cable operators in the future. I wonder whether, while everyone is happy about the existing list and the cable operators in particular have not raised an objection to it on the grounds of the costs imposed on them, a different burden is imposed owing to opportunities that have to be foregone as a result of this obligation. I am sure that what they have said to everyone—not just to the noble Lord, Lord Lipsey, and myself—is that if future obligations are laid on them, this could have an inhibiting effect on certain other policies which they would like to pursue and which the Government would like them to pursue—in particular, the expansion of broadband capacity. There is something to be said for looking differentially between cable and satellite operators in terms of any future additions that may be made to the must-carry list. It would be useful if the Government would agree to that proposition.

As regards government Amendment No. 195D, power of the Secretary of State to add to the list of must-provide services for the purposes of Clause 270 was, as originally drafted, completely unfettered. While it is unlikely that she would ever be tempted to exercise that power unless there was a significant public benefit to be secured, it is logical that paragraph (a) of this amendment mirrors the similar provision in the must-carry obligations in Clause 61. However, thereafter, the amendment departs from Clause 61(10) in that it refers to the costs to be borne, whereas Clause 61(10)(d) refers to the burden.

Does that mean that the drafters had in mind some non-financial penalties that would be imposed on the providers by adding to the must-carry/must-offer lists, but that any arrangements entered into or imposed under Clause 270 are precisely quantifiable?

4.45 p.m.

Lord McIntosh of Haringey: I have already explained the reason why the wording of Amendment No. 195D departs from the wording of Clause 61. It is dealing with must-provide rather than must-carry. I

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had better write to the noble Lord, Lord Avebury, on the issue of whether there could be any non-financial penalties. None has occurred to me.

Lord Avebury: I assumed that there probably were not, but I asked the question to be absolutely certain. I should be most grateful if the Minister would be so kind as to write to me. I beg leave to withdraw the amendment.

Amendment, by leave, withdrawn.

[Amendments Nos. 195A and 195B not moved.]

Clause 61 agreed to.

Clause 72 [Conditional access systems and access to digital services]:

Lord Gordon of Strathblane moved Amendment No. 195C:

    Page 72, line 36, at end insert—

"(2A) It shall be the duty of OFCOM to draw up and to issue guidance as to the manner in which access-related conditions set in accordance with subsection (2)(b) (and in particular the first indent to sub-paragraph (b) of Part I to Annex I to the Access Directive) may be satisfied in relation to each protected programme service.
(2B) Such guidance must be issued by OFCOM within twelve months from the commencement of this section.
(2C) Before publishing or revising the guidance OFCOM must consult with every person providing a protected programme service and any other person as they think fit.
(2D) It shall be the duty of OFCOM to carry out regular reviews of the operation of the access related conditions set in accordance with subsection (2)(b) and the guidance in respect of them and to prepare and publish a report on every review in such manner as they consider appropriate for bringing it to the attention of persons who, in their opinion, are likely to be affected by it.
(2E) Every report published by OFCOM under this section must set out OFCOM's findings in carrying out the review, any recommendations made by them and any changes to the guidance as OFCOM consider appropriate."

The noble Lord said: As the Minister pointed out in replying to the previous debate, the issue of the balance between must-carry and must-offer is extremely complicated and varies according to the platform to which we are referring. Equally, we have all been bombarded with propaganda—I give it no other name—from both the BBC and Sky on the issue of conditional access and the appropriate terms for such to the digital platform.

In some ways, the nature of the argument changed with the announcement made by the BBC that it was to go unencrypted from 1st June. However, I would remind Members of the Committee that 1st June has come and gone and the BBC still has not gone unencrypted. To that extent, the issue of due prominence on the electronic programming guide occupied us on the first or second day in Committee. However, we still need to address the issue of conditional access and the terms on which it would be granted. That issue, first, may arise again and, secondly, not all public service broadcasters may be able to go wholly unencrypted. I refer in particular to Channel 3 which has, quite properly, heavier regional obligations than the BBC.

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From the point of view of the Government, the history is a question of changing tack several times. I do not complain about that: it is a complicated issue and it is much better to change one's mind if one thinks it is wrong. The Government said that they would introduce in May last year 34 clauses on must-carry, which were published in July but then withdrawn before the Bill went to the House of Commons. In Committee in another place, the Liberal Democrat MP, Nick Harvey, tabled the same clauses as the Government first said they were going to introduce and then withdrew. The Government successfully argued against them.

It is very difficult to sift one's way through the propaganda supplied by the BBC, which feels that Sky is going to relegate it adjacent to the porn channels in the electronic programming guide. Sky say that this issue will lead to war with Ireland because channel 101 is RTE in Ireland and the BBC cannot possibly be there. I am not trying even to fix a price. I am simply suggesting that surely it should be the duty of Ofcom to be transparent in how it will arrive at what is a fair price for conditional access.

Make no mistake, this is an important issue. All the talk about content is of course important but if I were the only printer in Europe, no matter how many authors, I would have a fair amount of power. Sky Subscribers Services Ltd, entirely to its credit, has significant market power in the area of conditional access to the digital platform so we must make sure that we get it right; otherwise, we shall have a body controlling access to the digital airwaves that effectively will not be under proper control.

Significant powers exist under the European Union communications directives, provided that Ofcom declares that Sky has significant market power—which, to my mind, is self-evident. Ahead of that, Mr. Kim Howells, speaking in an Adjournment debate in the other place, mentioned that Ofcom has a much wider arena than Oftel, so can look carefully at the problem and decide a proper and fair charge for carriage.

My amendment does simply that. It asks Ofcom to consult and draw up new binding guidelines within the first 12 months of its existence that set out in detail how a fair price is to be determined for all categories of broadcaster, including public service broadcasters. Ofcom would be required to conduct reviews of a fair, reasonable and non-discriminatory regime in light of its functioning and practice. That is simply spelling out to Ofcom what we expect it to do, not trying to do Ofcom's job. I hope that my noble friend the Minister will find that he can accept the amendment.

Lord Peyton of Yeovil: I was rather mystified by the way in which the noble Lord moved his amendment but I rise with some trepidation because he knows a great deal more about the subject. I rather suspect that this long amendment would only do what will happen anyway. Does anything in the Bill stop somebody who has access going to Ofcom and saying, "What do these

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conditions mean?" If so, with great respect to the noble Lord, the proposed rather tricky exercise—which he daringly described as simple—is a waste of time.

Lord Gordon of Strathblane: I am fully in sympathy with the noble Lord's objection to redundant clauses—he wanted to delete Clause 3(6) for that reason—but the amendment goes further than the Oftel system, which has proved entirely unsatisfactory even in terms of the time taken to reach a decision. That is why the amendment is necessary.

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