Memorandum by the Campaign for Press &
Broadcasting Freedom (CPBF)
SECOND CALL FOR EVIDENCE
The CPBF was established in 1979. It is the
leading independent membership-based organisation dealing with
questions of freedom, diversity and accountability in the UK media.
The organisation draws its support from individuals, trades unions,
academics and community-based organisations.
The CPBF welcomes the important initiative by
the Select Committee to hold this inquiry. Recent debates concerning
media ownership policies have been predicated on a limited number
of technological, economic and political arguments, for example
that current ownership rules are inhibiting competition, squeezing
profits and undermining the future of free-to-air broadcast news
or quality newspapers. These arguments are, in our view, most
often asserted by corporate interests to pursue a strategy of
ownership liberalisation and content deregulation.
Major changes in media ownership are also taking
place as a result of convergence. The new information providers—search
engine and telecom companies, internet service providers, and
the like—play an important role in the selection, organisation
and flow of information and therefore need to be brought into
a revised analysis of media ownership and regulation in the age
of convergence. The CPBF is currently involved in its own research
on these issues, and looks forward with interest to the conclusions
and recommendations which emerge from the Select Committee's deliberations.
Below we respond to the questions in the second call for evidence.
1. Are the requirements in the Communications
Act 2003 relating to the quality, quantity, scheduling and impartiality
of national and regional broadcast news appropriate? Are they
sufficient? Will they be appropriate and sufficient after digital
switchover?
The 2003 Communications Act set specific quotas
for both national/international and, in the case of ITV1, nations/regions
news "as appropriate" and requires Channel 3 news programmes
to be "able to compete effectively with other television
news programmes broadcast nationwide", particularly the BBC.
The Act also requires that news included in television and radio
services is presented with `due impartiality' and accuracy. However
the clauses in the Act (see section 270) relating to the continuing
provision of quality national and regional news are insufficiently
robust because there is an acceptance that a channel's public
service remit may be relaxed because of "economic or market
conditions". In other words, a crucial service to the public,
such as broadcast news, should be provided only as long as it
is economically viable, not necessarily because of purposeful
and decisive regulation in the public interest. This is likely
to place industry interests in conflict with citizen's interests
in areas such as broadcast news, children's programmes and regional
output.
ITN
A number of factors have weakened ITN which
supplies news to ITV and Channel 4. The Broadcasting Act of 1990
created instability in the ITV system and the impact on ITN News
was considerable. Richard Lindley provides the detail in And
Finally... chapters 34-39. (1) The varied fortunes of News
at Ten are well known but one issue is worth highlighting.
In May 2001 the Independent Television Commission (ITC) gave nominated
news provider status to a consortium led by Sky Television, and
ITV used Sky to drive down the price of the ITV news contract
to £35 million (it had previously budgeted for twice this
figure). It now seems like ITN will have some stability, with
its contract renewed up to the end of 2012, but the damage done
to its news operation through a combination of the 1990 Broadcasting
Act and subsequent dire decisions by ITV management will be difficult
to repair. It certainly is not able to compete with the BBC's
news provision in the same way as it did from its inception in
September 1955, when as Andrew Marr points out in the foreword
to Lindley's book, it "ruthlessly exposed the BBC's stuffy
and picture-scared traditionalism".
ITV Regional News
ITV has announced plans which would lead to
drastic cuts of £35-40 million in its local and regional
news service to viewers. The company argues the reduction is from
17 programmes to 9, but in reality ITV currently broadcasts more
than 25 local news opt outs. The 9 regional programmes will cover
wide and inappropriate geographical areas, such as Tyne Tees with
Border and the East with West Midlands.
The plans need Ofcom's approval. In its July
2007 consultation document New News, Future News (2007)
Ofcom argues that digital switch-over (DSO) alongside other technological
and commercial developments, "make it much less likely that
commercial broadcasters would choose to carry news for the UK
nations and regions at anything like the current level, in the
absence of effective regulatory intervention".
The CPBF believes that this is a crucial public
policy issue. Policies driven by purely commercial, market-led
priorities will marginalise and weaken public service content,
of which news is an essential component. It is vital in the converged
media world that citizens have the choice of a diverse range of
high-quality, impartial news programming on both free-to-air and
other platforms. We support "effective regulatory intervention"
to ensure this.
Impartiality
Ofcom's July 2007 consultation document concluded
(page 71) "...the requirement for the BBC and Channel 4 to
be impartial should continue; and there appear to be no reasons
for any relaxation on other channels with PSB status"(ibid).
However, it also raises the question of whether, "for channels
other than the main PSBs, is impartiality still important, or
is it a barrier to diversity in an era with a wide range of services
available to viewers?" (ibid) and asks whether, "subject
to changes in legislation, should other channels be allowed to
offer partial news in the same way that newspapers and some websites
do at present?" (ibid)
In the CPBF response to Ofcom we pointed to
the merits of the BBC's June 2007 report From Seesaw to Wagon
Wheel: Safeguarding Impartiality in the 21st Century. We by
no means agree with everything in the BBC Report, but nonetheless
believe that parts of it point to useful new ways of thinking
about how the impartiality regulations might best be interpreted,
developed and applied in the current and future media environment.
These ideas, in our view, are a great deal more sound than allowing
certain broadcasters to operate outside the impartiality regulations
whilst requiring others to abide by them. First of all, because
we believe that fair competition requires that all broadcasters
offering news and current affairs programmes should be subject
to the same regulations. Second, because we fear that the impartial
broadcasters would inevitably be pushed towards opinion-mongering
and partiality by the de-regulated ones. And third, and most important,
in the interests of social cohesion. To quote from Peter Horrocks
in the BBC report: "the question that these extraordinarily
rapid changes in audiences, technology and mass media consumption
inspires is one that is wider than the BBC or public service broadcasting.
The question is whether we are a society in which there can be
common ground. Common ground in information, views and a shared
understanding of how to interpret the world. That common ground
is rapidly shrinking and it is hard ground to stake out. That
ground cannot now be based on a single set of views about the
world. It has to be a shared set of approaches to understanding
the world—a willingness to receive information that challenges
assumptions, of hearing views with which one disagrees and the
ability to debate and interact to form a variety of views about
a diverse society. In that very diversity there needs to be a
common purpose—a common approach to understanding".
2. Are the public interest considerations
for media mergers set down in section 58 of the Enterprise Act
2002 strong and clear enough to protect a diverse and high quality
news media? Are the conditions under which the Secretary of State
can order a public interest investigation appropriate?
The Competition Commission ruling in October
2007 about BSkyB's purchase of 17.9% of ITV is very limited and
reinforces a concern that regulators are increasingly conceptualizing
media pluralism in largely economic terms. The ruling focuses
on the likely "loss of rivalry" in the media market
in that Sky's stake would impinge on ITV's business model as a
result of the conflict between Sky's dependence on pay-TV and
ITV's on free-to-air broadcasting. The CC, however, rejected the
idea that the acquisition would raise pluralism issues in the
crucial areas of advertising and TV news.
According to CC chairman Peter Freeman: "As
far as the media public interest consideration is concerned, we
do not think there is sufficient evidence that the acquisition
will have an adverse effect." This suggests both that regulators
are operating with a restricted understanding of the nature of
the public interest—that it can be measured exclusively
in terms of degrees of market competition—and, as a result
of this, that instruments such as the public interest test are
unreliable guarantors of a robust and diverse media environment.
For example, section 375 of the Communications Act 2003 makes
it clear that the existence and regulation of press pluralism
depends on "the extent that it is reasonable and practicable".
As it stands, the decision about what can be considered "reasonable
and practicable" rests almost exclusively with the secretary
of state, leading to an opacity and potential conflict of interest
that is not healthy in a democracy.
There is an overriding need to revise the 2003
Communications Act and Part 3 of the 2002 Enterprise Act so that
the secretary of state is not the sole figure who can initiate
and rule on a merger review. An alternative independent structure,
with a broader brief which transcends purely economic criteria,
and places the issues of media diversity and plurality at the
centre of its concerns, should be considered.
We also agree with the points (sections 21-24)
made in the Goldsmiths Media Research Programme submission, in
the first round of evidence, on public interest issues.
Ofcom and the Triennial Review of Media Ownership
Ofcom's review of media ownership (MO) rules,
published on 14 November 2006 recommended that no changes be made.
Many of the functions of Ofcom are modelled on the US regulatory
body, the Federal Communications Commission, including reviewing
MO rules. In the 2006 Ofcom report (2.39) there is the astonishing
statement: "Some modest proposals for liberalisation were
suggested by the FCC in the United States in 2003, for example
to remove the ban on newspapers owning broadcast stations in larger
markets and relax the rules on local television ownership. However,
most were blocked on procedural grounds". As members of the
Select Committee will be aware from their American visit, the
FCC proposals were certainly not "modest" and spurred
widespread protest and opposition. (2)
Sylvia Harvey, in her forensic analysis of Ofcom
points out, ... Ofcom has appointed few senior staff with experience
of making or regulating television programmes. Its leading figures—drawn
largely from the worlds of advertising, cable, consultancy and
politics—appear to have little interest in the qualitative
dimensions of an audiovisual culture. Its ethos is predominantly
neoliberal, and its language and organizing concepts are suitable
for an analysis of markets and of competition, but not of social
significance and cultural value. (3) This last point about "its
language and organizing concepts (which) are suitable for an analysis
of markets and of competition, but not of social significance
and cultural value" can be extended to the work of the Office
of Fair Trading (OFT) and the Competition Commission (CC).
It was only three days after the MO rules review
was published that BSkyB announced that it had paid £940
million to acquire a 17.9% share in ITV. The move by BSkyB provoked
an intense and continuing debate about media ownership (of which
this Committee's work is one example) and in particular the role
and influence of Rupert Murdoch's global media group. It was this
concern which prompted Alistair Darling, then Trade and Industry
Secretary, to call for a review of BSkyB's ITV stake on 26 February
2007 and set in train the CC inquiry which reported on 20 December
2007 and recommended BSKyB's holding in ITV be cut to 7.5%. This
recommendation with some added stipulations was upheld by Business
Secretary John Hutton on 29 January 2008. We still do not know
whether BSkyB will appeal but the whole episode reveals some basic
flaws in the MO rules in the 2003 Communications Act and the way
public interest considerations are dealt with. As Roy Greenslade
points out, the BSkyB share raid did not breach the Communications
Act and if BSkyB does appeal "it will surely hinge on definitions
of public interest and the way the regulator and the Secretary
of State have, to all intents and purposes, ignored the Act's
specific provisions". (4) The CPBF thinks the Communications
Act needs to be revised to specifically and unambiguously exclude
powerful media groups from acquiring media holdings rather than
rely on subjective public interest tests. Such a revision also
needs to incorporate a broader analysis of media ownership and
regulation as a result of new converged communication structures
based around the internet, telecoms and computers. The importance
of this is underlined by Microsoft's $44.6 billion bid for Yahoo.
3. Do current national and local cross-media
and single sector media ownership rules set out in UK legislation
do enough to ensure a high quality and diverse news media? Or
now that most news organizations are moving towards multi-platform
operations, have these rules outlived their usefulness and relevance?
In this context are there effective actions that can be adopted
by news organizations to protect the public interest?
Long-standing concerns about media consolidation
will certainly not disappear with convergence. In an internet-dominated
future, there will still be the need for special regulatory controls
to promote both pluralism and diversity. According to the economist
Chris Marsden, the internet shares the characteristics of all
information markets, that in contrast to "broadcast public
goods which are non-excludable and non-rivalrous, the privatisation
of information flows offers possibilities for private monopoly
and sub-optimal exclusion of social groups and individuals".
(5) In other words, a broadband internet future is certain to
produce new types of monopoly and new forms of exclusion that
can only be tackled with purposeful and positive intervention
into media markets. It seems rather obvious that if we are still
committed to policy objectives concerning, for example, media
pluralism and diversity, then there is little point in junking
or diminishing the traditional mechanisms for achieving these
outcomes simply because we are faced with different technologies.
As Thomas Gibbons points out: "the public interest in media
activity is not rendered less relevant by the media's form".
(6)
The CPBF believes that this is a crucial public
policy issue. Policies driven by purely commercial, market-led
priorities will marginalise and weaken public service content,
including news. It is vital in the converged media world that
citizens have access to a range of high quality impartial news
channels.
4. Do any problems arise from having four
bodies involved in the regulation of media markets (the OFT, Ofcom,
the Competition Commission and the Secretary of State)? Are there
any desirable reforms that would improve the effectiveness of
the regulatory regime?
We think the problem is not necessarily with
the number of bodies involved, but the principles by which they
operate. As previously stated, economic arguments dominate the
thoughts of all four participants. There is also an overriding
need to rethink the role of the secretary of state as the sole
figure who can initiate and rule on a merger review.
5. Has the lifting of all restrictions on
foreign ownership of UK media affected the quality and independence
of the UK news media, or will it affect it in the future? Has
the UK industry benefited, or does in stand to benefit in the
future?
We think the key issue here is the potential
takeover of UK media by powerful US-based global media groups,
and the lack of reciprocity in terms of rules on media ownership.
The US specifically excludes foreign ownership of US television
networks on grounds of national security. It is unlikely however
that any UK media group would have the financial resources to
acquire a US television network
One area of CPBF concern would be if the general
requirement of "due impartiality" was lifted from certain
new channels in the future. Rupert Murdoch has referred to Sky
News as "BBC lite" and if BSkyB had regulatory approval
to shift to a more partial news approach the adoption of a Fox
News format might follow.
NOTES
(1) Richard Lindley. And Finally ...? The News From ITN.
(2005)
(2) Robert McChesney. "The Uprising
of 2003" in The Problem of the Media. (2004)
(3) Sylvia Harvey. "Ofcom's first year
and neoliberalism's blind spot: attacking the culture of production,"
Screen 2006 47(1)
(4) Roy Greenslade. "Everyone loses
after Hutton orders BSkyB to sell ITV stake," Evening Standard,
30 January 2008
(5) Chris Marsden. "Introduction: information
and communications technologies, globalisation and regulation".
In C Marsden (ed), Regulating the Global Information Society.
(2000)
(6) Thomas Gibbons. "Pluralism, guidance
and the new media". In C Marsden (ed), Regulating the Global
Information Society. (2000)
10 February 2008
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