Examination of Witnesses (Questions 181-199)
Mr Hamish MacLeod and Mr Dario Betti
30 OCTOBER 2006
Q181Chairman: Good afternoon, Mr MacLeod and
Mr Betti. Thank you very much for sparing the time to come and
meet us this afternoon. We are very grateful to you, and for the
written evidence that you kindly submitted too. You can take it
that we have read the written evidence, and certainly we will
refer to it as we go along. We have a lot to cover, so unless
there is something you would like to say initially, I would like
to go straight into questions. If there is something you would
like to say, by all means do.
Mr MacLeod: No. Fire away.
Q182 Lord Haskel: We thought we would
start on the scope of this whole thing, because the proposal attempts
to bring the emerging media platforms, specifically the internet,
under the existing regulatory framework for broadcasting. We would
like to know if you consider this appropriate, and what are the
advantages and disadvantages that this approach might have as
far as regulation is concerned?
Mr MacLeod: We basically share the views that
have been fairly clearly expressed by the UK Government and by
Ofcom that the non-linear services should be kept out of the scope
of the Directive. The reasons we are saying this is that on principle,
it is the wrong approach for regulating services that can be delivered
from anywhere in the world via the internet, and we are setting
up our regulatory system to fail if we expect them to be able
to devise rules and enforce rules that will work.
Q183 Lord Haskel: Is that because
you think the thing is under development and it is a sort of moving
target and it is very difficult to define the scope of a moving
target, so to speak?
Mr MacLeod: That is certainly one aspect of
it but I think the major aspect is the territorial issue, in that
these services can be delivered from anywhere, which will be far
outside the territorial authority of our national regulator, or
indeed any European Union regulator. You can make it partially
effective perhaps for services that are created within the European
Union, but it will be ineffective for any other type of content.
Q184 Lord Haskel: So you think that
anything that goes through the internet it is impossible to regulate
because of the territorial question?
Mr MacLeod: I think it is very difficult and
very impractical and the instrument of a Directive, which will
set up all sorts of responsibilities for our national regulator
to enforce, is just not the right instrument.
Lord Haskel: What about content? Do you
think it is possible to regulate content or is this a matter of
self-regulation?
Chairman: We can come on to content next.
Let us try to stick to scope if we can.
Q185 Baroness Eccles of Moulton:
It would be quite interesting to hear your views about the difference
between linear and non-linear, because it would seem that now
there is such a huge choice of what can be seen over the linear
system that maybe the difference between the two is not quite
as great as it was before either the linear expanded so much or
the non-linear came into being.
Mr Betti: I work more closely with the consumer
rather than the regulatory side. I work in T-Mobile International.
These definitions interest me as well. It is on one side understandable
what linear is right now, because it refers back to the television
world, where the model is existing and easy for us to understand.
However, once we try to look a bit more closely at what the user
might want of a mobile television, linear, here we start looking
at the unknown because actually right now we have something that
is embryonic, a new thing that is developing, and we do not know
exactly where it is going in the first place. So the definition
of linear and non-linear is a very interesting one because it
is a very grey area at the moment, I would say. It is a very difficult
one. It seems we are using technology terms almost to define a
consumer area, and the technology terms we are using are still
the old technology terms. There are quite a few examples of things
that are difficult to place at the moment. Just to mention one,
since we started discussing this, user-generated content has come
into being, and that in itself is an interesting way of redefining
non-linear. Also, if I look at what we offer now on some of the
mobile TV services, we have plenty of looped content. This would
be effectively seen as a linear service but then we would apply
a different framework of regulation for the same content which
is available as a non-linear download service, hence some of the
confusion over the content at this moment. Nevertheless, we think
there should be a distinction between what is considered linear
and non-linear, which should probably be better argued and better
thought through. However, we are not in a position where it is
clear as yet where we are going or what the consumer will eventually
want. It is almost a bit too early to define classifications.
Q186 Baroness Eccles of Moulton:
How long ago could you first receive an image on your mobile?
Mr Betti: We are talking about the technology?
Q187 Baroness Eccles of Moulton:
Yes.
Mr Betti: The first time I saw one was probably
in 2001 but it was not anything you could properly define as real
television.
Q188 Baroness Eccles of Moulton:
Surely, you would not link the words "broadband" and
"mobile" until that was possible. Up until then broadband
was only relevant as regards PCs, was it not?
Mr Betti: Indeed. The speed over time was very
much limited compared to what you used to get in 1995-96 with
the narrowband version. In terms of quality, obviously we are
moving forward, and it is not just the technology world that is
changing. One of the ways we are looking at this is purely as
technology convergence, but there is a service view of what the
consumer might end up doing with this, and that is more difficult
to guess and more difficult at the moment to really understand,
hence some of the questions we probably share on where the boundaries
are.
Q189 Baroness Eccles of Moulton:
I suppose what we are leading towards is that the technological
advance is moving at such a speed that these definitions are going
to become increasingly difficult to adhere to.
Mr Betti: It is increasingly difficult. When
these discussions started, probably two years ago, not just for
technology but some of the services, such as user-generated content
which we mentioned before, were not even considered or thought
of, and this is now possibly one of the most important elements
we might have to face in terms of the services. That is in two
years by the time this framework comes into being, who knows what
will have happened in terms of both technology and service?
Mr MacLeod: I would just like to make one point
about this non-linear regulation. The Directive as it is currently
framed is predicated on command and control-type regulation continuing
to be effective. It has been absolutely fine for what we understand
as broadcast regulation because all the players have been operating
within the markets that the NRAs can control and they have had
control over the spectrum and things like that which have allowed
them to exercise this control. When it comes to the non-linear
content providers, distributed throughout the world, command and
control will not any longer be effective.
Chairman: I promise you we will come
back to that.
Q190 Lord Haskel: On the question
of the scope of non-linear, Mr Betti spoke about user-generated.
Where would you draw the line between a programme which is transmitted
at a specific time and the same programme which you can call up
and watch whenever you particularly want to? The programme is
the same; it is only that the timing is at your discretion. Would
you call that "user-generated non-linear"?
Mr Betti: I am sorry. Let me see if I understand
correctly. Are you saying if we were to define it?
Q191 Lord Haskel: Yes, as far as
defining the scope of non-linear is concerned.
Mr MacLeod: "User-generated" is really
the term we use for amateur production, where somebody sits at
home in front of his webcam and does his own thing. There is no
professional service provider involved.
Q192 Lord Haskel: So if you have
a programme which is transmitted at a specific time but you can
also call it up—all the cable companies offer this facility—how
would you define that programme, if you called it up at time that
suits yourself?
Mr Betti: Would that be non-linear?
Q193 Lord Haskel: That would be non-linear.
Mr Betti: So on-demand?
Q194 Chairman: It would be, by your
evidence, your preference, but when the Minister was before us,
he made clear that in the compromise that had been reached at
European Council level, the Commission, that they would support
a definition of non-linear that would include TV-like services.
Mr MacLeod: Yes.
Q195 Chairman: Can I ask you two
questions, one to lead to that: the general public who are reading
this—if they ever do read minutes of these proceedings—would
be baffled by linear and non-linear. Can you explain to the ordinary
citizen what is a linear service and what is a non-linear service?
When you have done that, I then want to ask you about defining
it.
Mr MacLeod: I recognise that it is extraordinarily
difficult, this whole area, but what we think should be linear
is what we understand by traditional broadcasting services where
the schedule is developed by the service provider and transmitted
at a time of his choosing. That is basically the linear. The easiest
definition of non-linear would be...
Q196 Chairman: Everything else?
Mr MacLeod: Exactly. The compromise situation
that the Government have suggested I think recognises the political
realities of what is achievable, and I think it also recognises
what was really intended when they first started to review this
regulation three years ago, where they were thinking you are going
to be able to look at television on your television and exactly
the same content downloaded at your convenience over the internet.
They were thinking perhaps in order to create this so-called level
playing field we need to introduce regulation for both these types
of services. But in the mean time, the world has moved on considerably
and we have this huge amount of user-generated content which is
becoming available on services such as YouTube, which people are
managing to commercialise. So technically, they will come within
the scope.
Q197 Chairman: In your evidence to
us ...
Mr MacLeod: In our evidence we put the hard
view, yes.
Q198 Chairman: You do. You say that
it should only include traditional, real-time broadcast services,
including if you are on internet.
Mr MacLeod: Yes.
Q199 Chairman: But the compromise
being suggested does go wider than that. What is your view about
the meaningfulness of "TV-like broadcasts"? Explain
again to the public what it means.
Mr MacLeod: The simplest way of describing it
would be content that you are able to see on your TV being distributed
through the internet. It is the same sort of content. It might
be Coronation Street or Eastenders or whatever, but pulled
down through the internet; professionally produced.
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