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Lord Thomson of Monifieth: My Lords, is the noble Lord really saying that the way conditional access works is a matter for guidance and not a matter for proper regulation? Is it not a much more serious matter than simply one of providing reasonable guidance?

Lord McIntosh of Haringey: My Lords, guidance is quite a powerful thing, in its place. Ofcom has the responsibility of adhering to the conditions of part 1 of annex 1 of the access directive. If it does not do so, then we are in trouble with Europe. It is therefore Ofcom's responsibility to achieve that aim. How it does it is a matter for Ofcom. If it can do it through guidance, then it is entirely proper that it should do it through guidance.

Perhaps I may now turn to Amendments Nos. 136, 137 and 138. Here I do not have very much more to add to what I said in Committee. We all share the objective of providing universal and free availability of the public service broadcasting channels. The debate in Committee demonstrated that we all share a

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common understanding of the processes by which satellite television reaches us today. But we also agree that technology moves faster than legislation and that we should, if we can, make the Bill as future-proof as possible.

As we explained in Committee, there is scope for various models of satellite broadcasting. While some broadcasters will do all the work themselves, others will use a satellite service operator. Some will broadcast in the clear; others will have their services encrypted. Again, as we made clear in Committee, it is a mistake to think that Clause 269 implies that public service broadcasting channels can only be made available to viewers by offering their channels to, for example, Sky to broadcast on satellite. What matters for us is not the means by which the channels are made available but the result that the clause delivers, which is the availability to satellite viewers of public service channels.

Ofcom will impose the conditions that it considers appropriate to secure that the licensed public service channels are at all times offered as available to be broadcast by means of every major satellite television service. Ofcom will pursue three objectives, but it might not need to impose conditions to secure all three of them for any one channel. That will depend on the means by which the channel provider ensures that its service will be available to satellite viewers. The second objective can be secured in a way that does not imply that an intermediary is required.

As I explained in Committee, as things stand, we might be able to achieve our goal of universal availability through the second objective alone; but if the situation changes, the other objectives could be brought into play. It might also be the case that, because a public service broadcaster is broadcasting its channels itself, no further conditions need to be imposed in order to achieve the third objective, as public service broadcasters are already required to make their services available free of charge—otherwise, it serves the purpose that the provider of a satellite television service cannot charge for reception of the public service channels alongside the pay channels that it provides.

Perhaps I may finish by repeating what we are trying to do: whatever the market or technical conditions prevailing in the future, we aim to ensure that public service channels continue to be universally available free of charge. We think that that is provided by the clause as drafted. Therefore, we do not see any need for the amendments.

Lord Gordon of Strathblane: My Lords, I thank the Minister for his reply and those noble Lords who took part in the debate entirely in my support. I have in mind, in particular, the noble Lords, Lord Thomson and Lord Bragg, and the noble Baroness, Lady Buscombe.

I am slightly unhappy that the Minister has chosen to say that Ofcom should follow the example of Oftel. I am quite happy to accept the noble Lord's expression of hope that it is the proper function of Ofcom to spell

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this out and give us a transparent regime; but to add that Oftel's practice should be followed rather vitiates it.

There is no transparent regime at the moment. There are no noble Lords in this House, including, I suspect, government Ministers, who know who pays what to Sky for conditional access. That cannot be a satisfactory situation.

When the Minister liaises with Ofcom, I trust that he will see the need to stress that we hope that Ofcom will behave in a very much more transparent and speedy manner than Oftel. I beg leave to withdraw my amendment.

Amendment, by leave, withdrawn.

Clause 268 [Must-offer obligations in relation to networks]:

[Amendment No. 135 not moved.]

Clause 269 [Must-offer obligations in relation to satellite services]:

[Amendments Nos. 136 to 139 not moved.]

Clause 273 [Programming quotas for independent productions]:

[Amendment No. 140 had been withdrawn from the Marshalled List.]

Baroness Buscombe moved Amendment No. 140A:

    Page 245, line 24, after "programmes" insert "which are made by independent producers"

The noble Baroness said: My Lords, in moving Amendment No. 140A, I shall speak also to Amendment No. 141A. These amendments seek to introduce an alternative definition of "independent" for the purposes of the independent production quota. The quota requires that each licensed public service channel ensures that a minimum of 25 per cent of broadcasting time is allocated to independent production.

Currently, production companies which have an ownership relationship—that is, those that share the same parent but have no preferential commissioning relationship with a broadcaster—are deemed to be non-qualifying independents. The current regime determines independence based on common shareholding criteria. The Broadcasting (Independent Productions) (Amendment) Order has recently revised the requirements for independent production companies. Share restrictions now apply only in respect of any broadcaster which provides a television service intended for reception anywhere in the United Kingdom.

The amendment adopts a definition of "independence" that would allow companies which gain no economic advantage from an ownership relationship with another broadcaster to produce programmes that qualify for the quota. The amendment proposes an economic dependency test which requires producers who have more than a 25 per cent common shareholding with a broadcaster to show that they have derived no more than 33 per cent of their gross revenue from production activity from that

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broadcaster. The test would be easy to measure and proposes that if a production company should change status and become economically dependent on the main broadcaster, it would automatically lose its independent status.

The amendment differs slightly from the one tabled in Committee as it includes a provision that prohibits any producers who are owned or controlled by a broadcaster from qualifying for the independent production quota if a sister company receives more than 33 per cent of its revenue from that broadcaster, even if the company concerned makes nothing at all from the broadcaster. The amendment has been refined to alleviate concerns expressed in Committee that such a test could allow the quota to be attacked by the back door.

We urge the Government to consider these amendments as we feel that the independent sector is of fundamental importance to the broadcasting industry. I beg to move.

Lord Crickhowell: My Lords, earlier in the evening I warned my noble friend that I had some anxieties about her amendment. I had read it only during the course of our proceedings, and I was worried that it might raise the difficulty with which I dealt in Committee. On hearing what my noble friend said and on reading and re-reading the definitions in Amendment No. 141A, I believe that my anxieties may be misplaced. As my noble friend said, they are concerned with ownership relationships.

But perhaps I may explain my anxieties. During the Committee stage, I raised the issue of ITV companies being able to bid for independent production. I said that that was the kind of argument that Ofcom was being established to settle. It is for Ofcom to decide what role the ITV companies can play in the UK programme supply market over and above their regional licence obligations. For that reason, I tabled the amendment. The Minister who replied to me on that occasion said that, indeed, this was an issue for Ofcom. The noble Baroness, Lady Blackstone, said:

    "These subsections give Ofcom a duty to consider all aspects of the programming quota for independent productions, including the definitions that the Secretary of State has made by order under Clause 273 and Schedule 12 to define qualifying programmes and independent production".—[Official Report, 3/6/03; cols. 1209-10.]

I emerged satisfied from that debate because I felt that a clear steer had been given to Ofcom: that it was Ofcom which would deal with the matter. We were dealing with Clause 273 which defines in subsection (2)(b)that,

    "independent productions is a reference to programmes of such description as the Secretary of State may by order specify as describing the programmes that are to be independent productions for the purposes of this section".

Perhaps my suspicions were aroused because the noble Lord, Lord Alli, withdrew Amendments Nos. 140 and 141 which would have raised the issue of quotas by value as well as volume. I wondered whether there was a connection with the fact that this amendment had been tabled.

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All I seek is an assurance that the amendment introduced by my noble friend relating to programmes which are made by independent producers, which are then defined, will not later impose a restriction preventing Ofcom going down the route for which I argued in Committee and which the Minister said that Ofcom would be able to follow. I hope that it does not inhibit the ability of the Secretary of State to produce suitable definitions.

On re-reading several times my noble friend's amendment on ownership relationships, I think that the position is all right. But I seek reassurance that the position established earlier, which I think was wholly satisfactory, has not in some way been undermined.

9 p.m.

Lord Bragg: My Lords, on the noble Lord's last point, is it possible for the Minister to give us some reassurance that the smaller regional public service television companies in ITV, which for many reasons are languishing at present, can under well-regulated and transparent circumstances be allowed to behave and pitch as independents in the grander scheme of things? They are quite restricted with ITV. They are excluded from the BBC at present. They are in a very difficult position all round. This is a very good chance to help regional television and everything that goes with it. I should be pleased if we could have a reassurance on that.

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