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Baroness Andrews: My Lords, I beg to move that the House do now adjourn during pleasure.

Moved accordingly, and, on Question, Motion agreed to.

[The Sitting was suspended from 8.32 to 8.36 p.m.]

Communications Bill

Consideration of amendments on Report resumed.

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

Lord Gordon of Strathblane moved Amendment No. 134:

"( ) 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.
( ) Such guidance must be issued by OFCOM within twelve months from the commencement of this section.
( ) 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.
( ) 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.
( ) 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: My Lords, I was enormously encouraged by the reply of the noble Lord, Lord Davies, to the earlier debate on electronic programme guides and ensuring that there was due prominence, in that I recall his saying that he thought that it would be appropriate for Ofcom to publish a code on the matter. That is exactly what I am seeking by these

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amendments; nothing more elaborate than that. I was also at least mildly encouraged by the response of the noble Lord, Lord McIntosh, when I raised this issue in Committee. He said:

    "I hope that when Ofcom takes over those responsibilities and has in addition the responsibility for complying with Part 1, Annex 1, of the directive and the wording of Clause 72, it will provide the guidance that my noble friend seeks without spelling that out in the Bill".—[Official Report, 3/6/03; col. 1194.]

I hope that the Minister is right, but I should like some reassurance. The honest truth is that we have had Oftel for a very long time but we have not seen the sort of transparency of code for which I am looking.

I know that some noble Lords think that this amendment is unnecessary and that it is the sort of thing that Ofcom would do automatically. I wish that that were true. Unfortunately it cannot be guaranteed. Oftel, for example, has not so far declared that Sky Subscriber Services Ltd has a significant market power. That is self-evidently obvious. A market survey would demonstrate it in about a quarter of an hour. However, Oftel has not done that yet. So there is no guarantee that Ofcom is going to give this the priority that we are seeking.

Some people are unaware that no one really knows what people are currently paying for conditional access. The BBC has just done a deal but no one knows what the rate is or what rate other channels are paying for conditional access. I know that it is not quite conditional access in the case of the BBC but I will come to that in a moment. The fact is that we should have a transparent regime. If it is possible for various regulators to spell out the price of electricity and gas then it should be possible for Ofcom to spell out the price of conditional access. It is an important issue. Without that the whole digital revolution cannot take place properly.

The BBC deal does not make my amendment redundant; far from it. I am very glad that the BBC has reached agreement with Sky, but what that agreement has thrown up is that quite clearly the BBC still needed what Sky has referred to as "regionalisation" in order to deliver the appropriate BBC regional service in slot 101 and slot 102. Sky is regarding that as a form of conditional access, which is probably right—I make no complaint about that. However, that means that nobody knows what rates the BBC is paying. Perhaps more importantly, because it has not yet been decided, nobody knows what rate Channel 3—which has much more specific regional obligations—will have to pay to Sky. If the BBC has just done a deal, we should be able to assume that the same will automatically apply to ITV when it comes to look for that agreement. However, we cannot make that assumption and that cannot be right.

The conditional access costs will continue to be crucial. It has been a contentious issue for a long time. I do not blame the Government for introducing 34 pages of clauses exactly a year ago, withdrawing them before the Bill even hit the Commons and then relying entirely on the European directive. However, we need some assurance that someone will put flesh on the bones and that we will have a transparent regime that

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we can all understand. Indeed, we should be able to forecast what will have to be paid for conditional access. All that my amendment does it to ask Ofcom to do that—to spell it out clearly and quickly. If the Government are not disposed to accept the amendment, will they at least confirm that it is their view that Ofcom should act in such a way as a matter of urgency when it takes over in December? I beg to move.

Lord Thomson of Monifieth: My Lords, I apologise for not being in my place when the noble Lord, Lord Gordon of Strathblane, began his speech. I strongly support the case that he has made for some means—preferably legislative and statutory—to make the conditional access system open and transparent.

Conditional access has created a major problem and distortion for the broadcasting system in this country from the earliest days following its introduction. I remember arguments about it in earlier Broadcasting Acts. The decision that the BBC has apparently been able to make is a healthy one in terms of the overall situation, but very many problems remain to be solved. The noble Lord, Lord Gordon of Strathblane, has performed a service by putting down this amendment and pressing, in one way or another, for total transparency about the pricing arrangements associated with conditional access. It is in the interests of the general viewer of television in this country.

Lord Bragg: My Lords, I support the amendment of my noble friend Lord Gordon of Strathblane. I, too, apologise for not being in my place. That adjournment put us all at a disadvantage. We thought that we had seven or eight minutes; we had two or three.

I support every word said by my noble friend Lord Thomson, as I have done over the years in listening to his wise counsel. We have been on the same side in many battles. Transparency for conditional access is absolutely essential. Otherwise, there is an opportunity for fudge and for exploitation. Heaven forfend, but the opportunity is there.

There is no reason why there should not be transparency. There is no reason why there should not be a relationship established between different broadcasters seeking that access. If one particular organisation can monopolise and manipulate it, that is another distortion in what is supposed to help a market process. I therefore heartily support the amendment of my noble friend Lord Gordon of Strathblane.

Baroness Buscombe: My Lords, we on these Benches also support the amendment proposed by the noble Lord, Lord Gordon of Strathblane. As noble Lords have said, it would oblige Ofcom to publish guidance on how it will interpret the obligation placed on conditional access providers to offer their services to all broadcasters on fair, reasonable and non-discriminatory terms. A transparent regime is important. The amendment would not set a price for conditional access, nor would it prejudge how Ofcom

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goes about determining what is a fair and reasonable price. However, it will ensure that Ofcom reviews the pricing regime as a matter of priority.

I also want to speak to Amendments Nos. 136 to 138. Those amendments return to an issue debated in Committee. There remains a concern that wording used in Clause 269 and subsection (2) in particular suggests that there are other intermediary players in the satellite broadcasting process to or through which PSBs may offer their service. Consequently, the digital satellite platform is not an open platform.

I welcome the Minister's statement in Committee that the satellite platform is open in the sense that any broadcaster can approach the operator of a satellite and negotiate facilities for the transmission of a service and also buy conditional access and EPG services from Sky in the UK. Clearly, that is not in dispute. In view of that consensus, it is difficult to understand the Government's explanation of the clause in Committee when the Minister said:

    "The first objective aims to secure that the channel provider does not refuse to provide his channel to the provider of a satellite service, if they can agree terms".

He also said:

    "It is, therefore, quite different from the second objective which requires the channel provider to ensure that its service will be made available to satellite viewers, and to ensure that as many people as practicable can receive the service. The second objective does not mean that an intermediary is required".—[Official Report, 3/6/03; col. 1196.]

It appears from those statements that the first objective has been designed to apply to instances at which an intermediary provider and a satellite broadcasting process exists. Why otherwise would a PSB be refusing to provide its channel to that provider? But why is the first objective needed at all? Given that we all agree that the satellite platform is open, it is difficult to see how a situation could arise in which a PSB could refuse to provide its channel to the provider of an intermediate satellite service.

We contend that there is no possibility of that happening in the UK because the only satellite platform that exists is open and the PSBs already conform to objective 2 by making their services available to viewers directly without any intermediary players being involved. The Minister in fact confirmed in Committee that as things stand the second objective might suffice,

    "but if the situation changes, the other objectives could be brought into play to ensure universal availability".—[Official Report, 3/6/03; col. 1197.]

I should be grateful if the Minister would explain how the situation might change to where a PSB is in a position to refuse to provide his channel to a satellite service, which justifies the existence of the first objective. Otherwise, I urge the Minister to accept my amendments, which would ensure that Clause 269 is a more accurate reflection of the way in which the UK's satellite platform actually operates.

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8.45 p.m.

Lord McIntosh of Haringey: My Lords, let me begin by addressing Amendment No. 134. The intention of this amendment is to place Ofcom under a duty to issue guidance on how the requirements of conditions set under Clause 72 can be met. Subsection (2) of the clause deals with the setting of access-related conditions in relation to conditional access systems. One of the key requirements of those conditions, set out in Part I of Annex I of the access directive, is that operators of conditional access systems should offer those services to all broadcasters on a fair, reasonable and non-discriminatory basis.

The Government recognise that the question of what constitutes "fair, reasonable and non-discriminatory" access is of crucial importance, not least to public service broadcasters; it is a very difficult issue. It is therefore entirely appropriate and desirable that Ofcom should issue guidance on how those requirements can be met. In any case, it has been Oftel's practice to do so, and I am confident that Ofcom will follow that practice.

The only question is whether it is necessary to place a duty on Ofcom on this point in the Bill. That is not the Government's view. There are a great many things which it is sensible—even desirable—for Ofcom to do but which we do not think it necessary to put in the Bill. Except for a few questions of very fundamental importance, such as the use of its powers to impose financial penalties, we do not think it necessary or desirable to specify all the matters on which it would be desirable for Ofcom to issue guidance. It has been said amiably enough that the Bill is long enough. The proposed requirement is unnecessary and would add to Ofcom's procedural load without in practice adding anything to the degree of transparency and regulatory certainty which will be provided in accordance with the directive because, as I say, I am sure that Ofcom will follow Oftel's existing practice on this point; I would expect it to do so.

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