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Like many children who were among the first in their family to go to university, I used it both as an opportunity to leave home and experiment, and to gain a social and educational grounding, for which I remain deeply grateful. I spent a very enjoyable five years at the University of Aberdeen reading law and practising life, although it has to be said not always in equal proportions. My years studying law, however, resulted in a career in commercial rather than legal advocacy, which over the past 20 years has led me to various parts of the communications industry, from advertising and—yes—financial public relations to telecommunications and pay television, through to the launch of broadband and cable, and subsequently to the communications industry regulator, Ofcom. Among

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other things, over four years we helped to create the framework to build broadband out to the level that Britain enjoys today.

I have always considered myself extremely fortunate to have worked in and across an industry that crosses boundaries both of background and of geography, and one where the power of ideas and originality is valued above the power of individuals and institutions. It is therefore a double pleasure both to participate in this House and to do so on my own subject.

It is also apposite that I should open my innings in this House by responding to this evening’s debate, initiated by the noble Lord, Lord Fowler, on the Communications Committee’s thorough report on the ownership of news and the broader themes that it touches on: plurality, impartiality in news, effective democratic debate, quality, a responsive regulatory framework and the future of the media and communications industries. These are all vital ingredients of a healthy society and as such will be the key components of the Digital Britain Report, which is central to the ministerial brief commissioned by the Prime Minister when for the first time appointing a Minister for Communications, Technology and Broadcasting in one person, one brief and possibly one anorak.

Before expanding on that, I shall respond briefly to the specific questions raised by the noble Lord, Lord King, and my noble friend Lord Maxton on the two current and topical issues of BBC governance and content regulation. On the issue of content regulation, I hope that my noble friend Lord Maxton will forgive me—or, perhaps, given his comments, he will support me—if I do not join in the chorus of commentary on the Ross/Brand affair. Suffice it to say that, after an unacceptably slow or possibly false start, the BBC, its trust and the industry regulator are now all doing what they are there to do. As my last comment on this affair, I hope, the only thing I would like to put on the record is that I hope sincerely that it does not serve as an incident that either undermines the BBC or induces too much creative or editorial caution in the ranks of the commissioners and controllers.

The noble Lord, Lord King, asked some penetrating questions about the division of responsibility and the efficacy of those responsibilities between the BBC Trust, the BBC non-executive board, Ofcom, and the court of public and media opinion. These are fine judgments and, as the noble Lord made clear, in most instances—including the BBC Trust—these are new institutions learning for the first time how to exercise both their regulatory and supportive powers under extreme examination. I remember the debate at the time of the creation of the current arrangements, and it was always judged to be a balance. There were many, and I think I included myself with them, who argued for a singularity, the unitary structure referred to by the noble Lord both in terms of regulation and governance. For good reasons it was judged right at the time to go for the mixture of arrangements that have been put in place. My comment to him would be that at this time I think we should live with those structures and hope that those currently occupying positions within them learn from what has happened in recent weeks.

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On the particularly evocative question of reciprocity, I should like to reply to the noble Lord in writing. As he knows, within the European Union there is already full reciprocity and the question extends to other markets. I know from my experience in other markets where British companies encounter unfair discrimination, whether in ownership or regulatory rules, the Government are ready and willing to take up their cases. Nevertheless, a strong point has been made and I should like to reply to the noble Lord in writing.

Noble Lords do not need me to remind them that as our media are doing this well and consistently, our economy is wrestling with the fall-out from the credit crunch, as is every major economy in the world. As a consequence, many of those economies, including our own, are rightly looking to nurture those parts of the economy which can generate the jobs and growth potential to compensate for what we are losing from financial services. The French Government have recently produced France Numerique 2012, a comprehensive plan to build the infrastructure, services and content of their digital economy. It is notable. However, I believe that we in this country can and must match it—and preferably better it—in scope, ambition and comprehensiveness.

As many noble Lords have made clear, we start with many advantages: the strength of our content and creative sectors in publishing, advertising, television and other audio-visual production; the competitiveness of our communications market; our openness to new ideas and new investment; the reach and pervasiveness of our existing broadband and mobile networks; the thinking, if not yet the full realisation, of a market in wireless spectrum; and 60 years of a successful plural broadcasting network in radio and television, to which many noble Lords have referred.

As the debate has highlighted, these issues also have an equally, and perhaps critically, important citizen component at their heart; civic values and objectives that are central to a healthy society and a modern economy. Therefore today’s debate is a timely debate. Tomorrow, as my noble friend Lord Maxton pointed out, the process of digital switchover in terrestrial television begins in earnest with the progressive switch-off of the analogue broadcasting signal in the Border region. Terrestrial television is now catching up with the realities of a market that has in many other respects already become digital. By the end of the switch-over process four years from now, every household and every television in every household will be fully in the multi-channel, interactive age. It has been a national commitment to build out and fund, in part, a universal digital infrastructure, with an immediate capital investment of nearly £1 billion and a lifetime infrastructure investment by the transmission and broadcasting companies of several times that number.

Alongside this infrastructure and that of the cable and satellite companies many people will also have high-speed broadband services, so called IPTV, and, increasingly popularly, mobile broadband services. For many of those people and the devices that they are using, the boundaries between broadcast and broadband audio-visual content will be increasingly blurred.

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To digress slightly, in 2008 we have begun to take broadband Britain for granted, although I, for one, remember when it was both a political and national problem. I was summoned, as the then managing director of the second largest telecommunications company in the country, into Downing Street to discuss what might be done to encourage deployment and take-up and remove this national problem. As I emerged from Downing Street that time round, I remember thinking that that went better than expected and was relatively easy. How little I then knew.

Broadband for everyone is, in a non-partisan sense of the word, a progressive objective. It is about inclusion rather than exclusivity; it is about access to information rather than control of information; and it is about participation. Therefore, practically rather than just rhetorically, broadband is a democratic activity. For businesses, broadband is about efficient distribution, lower costs and lower carbon consumption as we move to an economy that increasingly moves bits and bytes rather than people and goods.

However much has been achieved in broadband Britain over the past eight years, we must all recognise, and this evening’s debate reminded me of this, that we are still considerably further advanced and, frankly, more concerned, as a broadcast nation than we are as a broadband nation. We have as a nation consciously embedded—and, in part, publicly funded—universal access to digital broadcasting, but we have not yet embedded or publicly funded universal access to broadband, however defined. If Lord Reith was right, as in many things he certainly was, in his assertion that the broadcasting system of a nation should be a mirror of that nation’s conscience, surely our ambition should be for the broadband system of the nation to be the engine of the nation’s mind.

In summary on this point, we need to be a nation of both poets and plumbers, but we need to deliver the plumbing before celebrating or protecting the poetry or we will be left behind. That includes, although this is not exhaustive, a fully digital television service universally available on multiple platforms; a universally available broadband system competitively priced, at meaningful speeds; a national digital radio network universally available with true nationwide coverage; and mobile and wireless services that can do for video what they have done for the spoken word. If we can achieve those four things, we will have connected the nation to the next generation of plumbing and given ourselves a comprehensive infrastructure for the digital age.

As the noble Baroness, Lady Rawlings, made clear, these changes are significant, but we can make for a better outcome if we are clear about what the future infrastructure is before we make lasting policy decisions about what the future creative solutions should be—because then we can focus on the poetry. We can focus on creativity in film, in television, in advertising and online. We can focus on rights, their value and where and how the rewards of creativity should be shared. We can focus on ensuring a continued supply of original UK-originated content that works on all those platforms that we have built and delivered. We can focus on the delivery of plural and impartial news—funded, independent, truly local, national and

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regional—and we can focus on competition for quality in both the private sphere and the public service context.

On a number of the Communications Committee’s recommendations, the Government’s written response contains soft words. However, discerning readers—and it would appear that there are a number here today, including the noble Baroness, Lady Howe—appear to have detected a sense of less than total, and possibly even less than requisite, enthusiasm. I offer some personal context. Digital technologies and the market, as many have said today, have created a profusion of new content. Production costs are lower and there are many more routes to the viewer and the user. We have seen, and will continue to see, thousands of flowers bloom, whether in user-generated content, local and special interest sites for information and social interaction, or 200-plus specialist channels on digital television. This revolution has also taught us how to get more out of what we hitherto took for granted. Televised sport is a prime example. Digital has given us, in one notable respect, an award-winning, fully market-funded UK news channel. However, in news overall, particularly national, regional and local news, all parties can agree on what the noble Lords, Lord Fowler and Lord Inglewood, made clear—that the picture is by no means as rosy as this.

During the past decade or so, many in your Lordships’ House, and I include myself in that otherwise illustrious company, have overseen, or in some instances conducted, a series of transitional agreements, which we could even call “deals”, with the commercial public service broadcasters to preserve the breadth of and investment in public service content, particularly national and regional news. These arrangements have sought to manage and slow the pace of decline. Frankly, though, decline is exactly what it is and has been. It is retreat, not creation. While these arrangements have to varying degrees served the viewer in the transition, that transition is ending. The levers of exhortation and the levers of regulation are ceasing to have purchase at a pace which few truly appreciate.

We must look urgently at how best to secure a shared civic agenda—effective political debate, plural and impartial news, but in the changed circumstances of a fully digital world that I tried to describe. If we want things to stay the same, or return to the quality they once were, they are going to have to change radically.

We will need more far-reaching, radical and different forms of intervention than those we have all grown accustomed to and in some cases grown up with. The noble Lord, Lord McNally, put it as ever well when he described the media as a form of national conversation, not just a form of national commerce. However, I believe that he recognises that we are now in that place where we need to look more surgically at the differences between the institutions operating in those markets that the state can continue to control and influence and those that, frankly, we cannot and probably should not.

We may be comfortable as a society with the BBC as the sole purveyor of impartial news in television, in radio or at a local level, but I doubt that many,

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including the BBC, would see that as an ideal outcome. The noble Lord, Lord Fowler, clearly laid out the disproportionate strength of the BBC in the current news market in his introduction to this debate. Of course, some would say, we do not have the BBC alone; we have the BBC plus the market. But perhaps I may refer briefly to what is happening in the market.

The report of your Lordships’ Communications Committee rightly touches on two trends that represent increasing pressure points, particularly on the advertiser-funded model that has delivered us quality from a range of broadcast providers in news and other genres over the years. This model has, alongside the cover price, sustained a range and quality of news in national, regional and local papers that is the envy of many other countries. The two trends of consolidation and of audience fragmentation, driven by the ineluctable shift to digital technology, are having a profound effect on all our media— press and broadcasting. Those trends featured throughout this evening’s thoughtful debate. Audience fragmentation among other things crucially affects the broadcasters’ ability to earn the revenues necessary to sustain investment in quality news and other programming.That is, however, a clock that we neither can nor should seek to turn back. One viewer’s audience fragmentation is many other viewers’ exercise of a choice that they did not previously have. We therefore need to address its consequences, not to deny or redress its realities.

Another interesting reality that we need to recognise is that, while the new platforms that I unashamedly champion and the new revenue streams that they have brought are very significant—subscription in television is worth more than £4 billion a year; broadband revenues are worth more than £2.5 billion a year; and mobile telephony call revenues are worth more than £15 billion a year—they generate very little new or additional UK-originated content, at least outside premium sport. It is perhaps of the order of £100 million a year, including market-based news. That should be compared with approaching £2 billion of advertiser-funded UK audio-visual content, and the same order of magnitude from the licence fee.

Many of this evening’s contributors have made it clear that, as a society and an economy, we must either get used to UK content being spread ever more thinly across a wider range of platforms, or find or encourage new business models, new revenue streams or new forms of funding that will sustain and preferably enhance content creation, including well resourced news gathering, in this country.

The committee’s report rightly highlights that consolidation carries a risk of disproportionate influence landing in the hands of too few individuals or too small a number of organisations. However, in at least some parts of the media world, consolidation with the right remedies is on balance a response to, not a cause of, concern. I would point to cable consolidation, in which I was involved and which gave the initial impetus for today’s broadband competition; consolidation in local radio, which sustains 600 stations and has contributed much to a digital platform that covers 90 per cent of the population; and even consolidation in commercial television and satellite, which, funded by advertising and subscription, today gives us the better part of

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£1 billion a year of original UK production. The impact of the internet on local and regional newspaper and local radio revenues, particularly when coupled with an economic downturn, means that consolidation may be a necessary alternative to licence hand-back or title closure, or, perhaps even worse, the slow degradation and hollowing-out of any quality in their news provision. My sense is that this is in part the analysis that lay behind the comments of the noble Lord, Lord King.

We welcome the committee’s recommendations about the need to revisit the current ownership constraints, particularly on local radio and newspapers. The Government agree that there is an argument for change to be considered and the issue will very firmly be on the agenda of the Digital Britain report over the coming months.

More generally, let me cover the two key issues that ran through the committee’s report: the operation of the public interest test and impartiality. The purchase of shares in ITV plc by BSkyB plc was the first time that the Government have used the Enterprise Act power to investigate the media public interest test. In light of this experience and on balance, we are satisfied that the present arrangements for initiating such a test are appropriate. If I am allowed to make a personal comment, let me say that I am unconvinced that a change in who can initiate a public interest test is, on balance, merited at this stage. It is still right that the decision to make such an exceptional intervention falls to Ministers directly answerable to Parliament, not to the independent regulator. Similarly, it is right that the Competition Commission, not the sectoral regulator, should conduct the final investigation into both the competition and public interest issues arising from any merger. In truth, the requisite depth of experience rightly resides within the commission, not within the regulator.

The Government fully endorse the committee’s considered view of the importance of the impartiality requirements, especially on, but beyond, public service broadcasters. Not only are these rules an essential part of the regulatory framework, but they have, as the noble Baroness, Lady Bonham-Carter, pointed out, served to condition the market for news in this country. In a way, we should seek to underline, not undermine, those rules. I believe that it explains in part why in this country the market produced Sky News rather than Fox News.

Of course the print media are very different. It is a long-standing principle that the content of the press should be free from state intervention. We continue to believe that robust self-regulation is the best way of ensuring high standards of reporting in the press. In fact, as the traditional media place greater emphasis on the internet to deliver content, we may need to trust more to effective self-regulation. However, I would like to put it on record that we may therefore need to expect more from this system.

As I have said, tomorrow in the Scottish Borders the terrestrial television switchover begins. Terrestrial television is playing catch-up with the market-led digital world of satellite, cable, mobile and broadband. The benefits are clear: greater choice and interactivity for viewers and opportunities for growth and innovation

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in business. The challenges are equally clear. First, broadband and broadcasting need to be seen by policy-makers as of equal import, with the recognition that the former is having a significant impact on the economics and cultural reach of the latter. Secondly, not all solutions will necessarily come from existing structures and institutions. Thirdly, we should embrace new forms of content but recognise that the forces that enable that content do not necessarily favour or fund the creation of well funded, impartial news. Lastly, UK-originated content is a significant and critical contributor to the sector.

Again, I thank the noble Lord, Lord Fowler, and his colleagues on the Communications Committee for what I believe is a comprehensive analysis of the issues. I also thank them and other noble Lords for their contributions tonight. I hope that I have covered most, if not all, of the issues raised. I also hope that noble Lords will understand if I have not, at my first outing at the crease, quite managed to hit all the balls that have been bowled at me. I hope that as the Government take forward these important issues in the Digital Britain report, this House in particular will continue to engage its expertise with the matters that are so crucial to our society, to our economic success and to our political debate.

On this day of all days, let me follow in the fine tradition of transatlantic political word-sharing and echo the words of the President-elect, Senator Obama, who said:

“Let us be the generation that reshapes our economy to compete in the digital age”.

To those words I would add, “But let us do so as both citizens and consumers and, as it relates to news in particular, let us do it in that order”.

9.19 pm

Lord Fowler: My Lords, first, I pay a sincere tribute to the noble Lord, Lord Carter, for his elegant and forceful maiden speech. Everyone who listened to it would have been impressed by it. No one who has come to that ministerial job is better qualified than he is to do it. As he would expect, there were parts of his speech with which I personally did not agree, and which we would like to debate, but now is not the time to do so. Genuinely, I thought it an outstanding maiden speech. It was fascinating to hear what he said about corporate governance at the BBC and his original views. We were always written off as eccentrics for having those views, so it is nice to know that those eccentric views are now shared by others—and even more are coming out of the woodwork.

Let us look back on the Minister’s career. He was educated in Edinburgh and was student president of Aberdeen University in 1985-86. I think that one could see some of that coming out this evening. After graduating from Aberdeen, he went to J Walter Thompson, where he was made managing director at the age of 31, if my arithmetic is correct. He went on to become the chief executive at Brunswick before going downmarket and becoming Gordon Brown’s chief of strategy and principal adviser at No. 10. Fortunately, that did not last long and we very much welcome him to his job today.

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It is customary to say at this point that we look forward to hearing from the Minister again, but I do not think that there is any particular point in repeating those words. He will find himself being much used on the Front Bench and, on future occasions, we might even interrupt him from time to time, but I know that he will be able to deal with that.

To speak generally about the debate, I did not refer to the Government’s published response to our report because I did not think it worth referring to. It was a pretty inadequate response from the department, whose instructions seemed to have been to play a straight bat and concede nothing. That is exactly what the response did. I hope that the new Minister can improve on those responses.

I thank everybody who took part in the debate. I thank the noble Baroness, Lady Bonham-Carter, for what she said about the BBC and her warning about programmes such as “Newsnight”. The noble Baroness, Lady Howe, put an emphasis on the interests of the citizen and the importance of the Content Board. The noble Lord, Lord King, made a number of points, including a particularly important one about reciprocal arrangements between the United States and us. It is ridiculous that a company in the United States can take over ITV and we are totally unable to have the same reciprocal arrangements. The department needs to do rather more than just play a straight bat on that one.

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