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The Lord Bishop of Manchester: I support the issues raised by the noble Baroness, Lady Buscombe, particularly in relation to Amendment No. 258ZCA.
In the Church of England we have spent considerable time recently looking very carefully into these matters. I support fully the view that the rights of appeal from decisions of Ofcom need to be extended to licensing and content matters covered in Part 3 of the Bill.
I know that Ofcom will continue the existing roles of bodies such as the Broadcasting Standards Commission, but it would greatly increase Ofcom's transparency and accountability if its decisions could be scrutinised in the manner that we on these Benches are currently exploring.
I have heard the points made from the Liberal Democrat Benches and I shall be interested to explore them further. Certainly in terms of the advice that we have been receiving in the Church of England it would seem that leaving judicial review as the only route available for redress is neither adequate nor appropriate. I may return to the issue at a later stage.
Baroness Howe of Idlicote: I have only recently heard about this possibility. I, too, am intrigued to know whether there is a likelihood of appeals, particularly on content matters. It has worried me from the beginning that Ofcom or the content board, or a combination of the two, would not be sufficiently independent—and transparently so—in cases brought against them, particularly on fairness and privacy issues. If there was a hope of a process other than judicial review—which, as we have heard, is fairly limited in what it can do for a complainant—it would relieve the minds of many people. I was particularly struck by the range of appeals and appeals upon appeals available in respect of the Bill's technical and economic provisions, which contrasts with the lack of appeal available against any of Ofcom's decisions. It will be interesting to hear more about that from the Minister. I gather that there is legal backing for the amendment and even if it is not possible, such a provision should be written into the Bill.
Lord Davies of Oldham: The noble Baronesses, Lady Buscombe and Lady Howe, and the right reverend Prelate asked about the right of appeal. Which is the right route of appeal on the decisions that Ofcom will make? In Part 3, Ofcom is asked to make subjective content judgments, with safeguards. Ofcom is required to give broadcasters a reasonable opportunity to make representations before imposing sanctions. In the event that a dissatisfied broadcaster alleges that it has been unfairly treated, it may bring judicial review proceedings against Ofcom. The noble Lord, Lord Razzall, emphasised that that is exactly the right approach. The subjective judgment on content is made by the specialist regulator under the supervision of the High Court.
The approach in Part 2 is different because there are no content judgments to be made there. Where Ofcom uses its Broadcasting Act powers for competition purpose, there is of course a right of appeal to the Competition Appeals Tribunal.
Baroness Buscombe: Does not the Minister accept that judicial review is not necessarily appropriate in this instance, given that it can only examine the methodology of a decision, not its merits?
Lord Davies of Oldham: I am inclined to follow the noble Lord, Lord Razzall. We have substantial experience of the process in terms of competition policy, and there is reasonable satisfaction with it.
Baroness Buscombe: We are talking not about competition but about aggrieved licence applicants
and content questions—as opposed to competition matters—where judicial review would be seriously inappropriate.
Lord Davies of Oldham: With decisions involving subjective judgment, I agree with the noble Lord, Lord Razzall, that the matter should be resolved in the High Court under judicial review. Where Ofcom is involved in other types of judgment, there is the right of appeal to the Competition Appeals Tribunal, which seems an entirely justified strategy for dealing with such issues.
The noble Baroness, Lady Buscombe, suggested that there was some unfairness in the proposals in terms of the relative positions of satellite and cable. As retailers of channels, neither is licensed. Therefore, cable packages do not require a licence under Part 3 of the Bill, but neither does Sky as a package of satellite channels. Since Sky operates a vertically integrated platform in which it both packages channels and owns Broadcasting Act licences to provide content for its own channels, it considers that it is singled out from cable operators. However, if a cable operator were to own its own channel, it would be treated in precisely the same way as any other licence holder. So it is not the case that there is unfair discrimination to one provider against another.
The noble Baroness raised the issue of economic regulation. I will come to the detailed comments which she made about her amendments. Ofcom does not have a duty to regulate the economics of broadcasting per se. Ofcom has two objectives for regulating broadcasting economics; namely, competition and consumer interests. Intervention, such as economic regulation in pricing and in the packaging of channels made in the interests of consumers, should be treated in the same way in terms of route of appeal as a competition intervention.
For example, Ofcom may wish to intervene in Sky's packaging of channels so that consumers could have more choice of packages without having to buy a lot of unwanted channels as a minimum. I recognise what the noble Baroness is saying that such an intervention would have a significant economic impact on Sky. But the purpose of the intervention would be a subjective question of what represented an acceptable amount of consumer choice.
Ofcom's duty to further the interests of consumers is qualified by the parameter, where appropriate, of promoting competition. It is therefore difficult to see that Ofcom could justify intervening in the packaging of channels in the consumer interest without being able to show that it was not appropriate, via the extended general and sectoral competition powers that Ofcom will have, to resolve the issue by encouraging more competition in the pay TV market. If Sky thought that Ofcom had not properly evaluated these options it could challenge Ofcom under judicial review that it had not used its powers properly.
I turn to the amendments. I am seeking to obtain from the noble Baroness withdrawal of most of the amendments although I have some good news as
regards one amendment. Amendment No. 256 is similar to one which first appeared in another place. It would limit Ofcom's ability to determine the most appropriate route for intervening in a competition matter. The amendment would replace the requirement on Ofcom in Clause 310(2) to choose the,
- "more appropriate way of proceeding",
We believe that the "more appropriate" test is in line with the treatment of other regulators with concurrent powers in relation to competition issues. Therefore, we would defend that position as enshrined in the Bill.
This formulation acknowledges that the regulators in a range of sectors, not just communications, are best placed to determine whether to use general competition law or sector-specific competition powers in a given case. We regard that as the entirely correct approach.
Conduct amounting to a breach of a competition rule made under the Broadcasting Act may also constitute a breach of the prohibitions in the Competition Act. However, depending on the circumstances, it may be more appropriate for Ofcom to act under the Broadcasting Act powers. Amendment No. 256 would hinder Ofcom's ability to make that decision.
I think that the noble Baroness would regard Amendment No. 257 as consequential and linked to Amendment No. 256. Therefore, if I am able to persuade her to withdraw Amendment No. 256, I foresee little difficulty with regard to Amendment No. 257.
Amendment No. 255A seeks to broaden the range of powers that Ofcom cannot exercise if its Competition Act powers are more appropriate, and provides for an appeal to the Competition Appeal Tribunal against the exercise of those powers. As I indicated earlier, we do not agree with this approach. It is unnecessary because sufficient safeguards are provided by Clause 310, as drafted. In particular, subsection (1)(d) ensures that Ofcom has to consider whether it would be more appropriate to proceed under the Competition Act before it decides to enforce an obligation imposed by licence conditions. That would include any obligation arising out of a code of practice or guidance issued by Ofcom to amplify those licence conditions.
Amendments Nos. 258ZA, 258ZB and 258ZC seek to give a route of appeal to the Competition Appeal Tribunal to a wider range of interventions by Ofcom. As I indicated in my more general comments before coming to the specific amendments, we do not think that would be appropriate. The Bill, taken with what will remain of existing legislation, gives Ofcom a wide range of specific functions for the regulation of broadcasting. We do not envisage it relying on general duties in Clause 3 to a substantial extent: it will use the specific powers that we have created.
Where, however, Ofcom decides that it cannot otherwise adequately perform its general duties, it might decide to impose a licence condition that is not otherwise specifically provided for. Where it does so, that intervention will be made in pursuance of a much broader range of public policy reasons than competition alone—involving, for example, furthering the interests of consumers.
We have listened to the concerns about the exercise of Ofcom's Broadcasting Act competition powers and, in particular, that Clause 3 could be used as the basis of conditions amounting to what it terms "economic regulation", without a route of appeal to the CAT. I have sought to make clear the differentiation between the two roles of Ofcom in that respect.
Amendment No. 258ZCA appears to recognise that, in theory, Ofcom could use non-competition powers under Part 3 of the Bill—that is, Clauses 259 to 308 and Clauses 312 to 339—to intervene for a competition purpose. This rightly recognises that such an intervention should have a route of appeal to the Competition Appeals Tribunal if it was proved that the intervention was for a competition purpose. We entirely agree with this principle which, once again, I sought to emphasise earlier, and have already allowed for this in the Bill.
Amendment No. 285ZD seeks to ensure that Ofcom carries out its functions according to best regulatory practice. We do not disagree with the principle behind this. Indeed, that is the requirement of Articles 6 and 7 of the framework directive; namely, that Ofcom should adopt appropriate, fair and transparent processes for applying its powers. However, we believe that the Bill contains sufficient provisions to ensure that that is delivered. Although such a provision is made in Part 2 as a requirement of implementing the directive, there is no need to repeat the principles here. To do so would require the numerous repetitions of this text throughout Part 3.
We consider that Amendments Nos. 258ZE, 285ZF and 258ZH are unnecessary as we have ensured that provision for Ofcom to review its codes and consult on those reviews is already made in the relevant sections of the legislation. We would maintain that these amendments would therefore create much duplication. I do not see what they would add to the Bill.
Amendment No. 258ZF would require Ofcom to review every licence condition imposed on licensed broadcasters and to consult on that review. That is unnecessary since Ofcom is already under a duty under Clause 6 to review all its functions and remove those burdens that are no longer necessary.
Finally, I come to Amendment No. 258. This amendment seeks to ensure that Ofcom carries out its functions according to best regulatory practice by requiring it to inform any person affected that it has used its Broadcasting Act powers for a competition purpose. Under this amendment such a notification would include informing those affected that they may appeal to the Competition Appeal Tribunal against the intervention.
We do not disagree with what we take to be the core principle behind this amendment—transparency and fairness of the regulatory process—and we therefore agree to consider further the possibility of tabling a suitable amendment at Report stage. I hope that the noble Baroness will feel able to withdraw that amendment on the basis that we shall act positively in future and that she will not press the other amendments in the light of the response that I have given.
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