Examination of Witnesses (Questions 860
- 879)
WEDNESDAY 14 NOVEMBER 2007
Mr Ed Richards and Mr Peter Phillips
Q860 Chairman:
So you are really an observer of the scene?
Mr Richards: We are, and indeed our small responsibility
that could be invoked in relation to newspaper takeovers we have
not had to use in four years. We are therefore an observer really.
However, it is important to be an observer to understand news
in the round.
Q861 Chairman:
Television news, all your papers suggest, is the predominant form
of news provision in this country. I think what you are saying
is that the standard of that news is still, if you like, at the
same level as it was a number of years ago. It has not deteriorated.
Mr Richards: Let me answer the question in two
ways, just to underline what was implicit in your question. Do
we think that television news is important? Unequivocally. In
fact, if I were to pick a single statistic out of our New News,
Future News report which struck me as crucial, it would be
the answer to the question that we posed people, "What is
your primary source of news?". The finding, which I did not
anticipate, was that television news—the share of that—was,
first, two-thirds of people and that, secondly, it had remained
stable. Despite this glut of new information and access to the
internet, the significance of television as the primary source
of news had remained stable. That was a really important finding.
The relevance of television news, the role it plays, the impartiality
and the high quality of provision by public service broadcasters,
remain absolutely pivotal to the way this country consumes and
absorbs news. In terms of the quality, as I have said, we would
be cautious about saying that it has gone up and we would be cautious
about offering too clear or definitive a judgment. What I think
we can say about the evidence that we put together for this report
is that there is certainly no evidence that we could see that
it has deteriorated. That is true of the analysis that we did
of conventional news bulletins. If one took a longer time horizon,
the area where there has certainly been a change, with significant
pressure, would be current affairs—where, in terms of the
resourcing and the scheduling of current affairs, you have certainly
seen a change over the last 10 to 20 years.
Mr Phillips: The analysis that we did for our
work compared the agendas of programmes in 2002 and in 2006 and
it showed that, for all of the commercial public service broadcasters,
the proportion both of international news and of political news
had increased over that period. Clearly it is very difficult to
get complete like-for-like comparisons, given the shifting nature
of the news agenda; but there was certainly no evidence that things
were going in the wrong direction as far as that is concerned.
However, the style in which television news is presented now has
shifted significantly over the last five years, and I suspect
that some of the popular comment about that relates as much to
those stylistic questions as it does to the substance of how the
agendas themselves have changed.
Q862 Chairman:
Going to the other forms of news that have come in, you see internet
news as a supplementary rather than as a main source of news.
Only 6%, I think, are using it as the main source at the moment.
Mr Richards: That is right, yes.
Q863 Chairman:
Do you think that this will be a permanent feature? In other words,
do you think that the internet has just a limited part to play
in the provision of news, or do you see the 6% as being a base
which will continue to develop?
Mr Richards: It is possible that it is a transitional
point and it is possible that the internet will become a more
meaningful source of news. You would expect that if it were to
be the case anywhere, it would be true more amongst younger people.
The reason that it may not be, and that we may see it becoming
consistently or overwhelmingly a complementary source, is because
if we had done this research some years ago, when the internet
was brand-new and 5% of the population were online, and that was
what we had found, I think that we could have safely said, "It's
highly unlikely to stay like that". However, more than 50%
of households in this country now have broadband access and the
overall internet penetration is 60%. We are no longer talking
about a small minority which will grow, therefore; we are now
talking about a substantial base of experience, with a very significant
number of people already on the internet, indeed accessing it
through broadband. That is what makes me think that it may be
something that we will see persist. I am sure it will change a
little more over time, but I think that the finding about the
significance of television news compared to the supplementary
role—the important supplementary role—that the internet
is playing, we may see as a resilient finding in the years to
come.
Q864 Chairman:
Have you done a comparison between the UK and the United States
on this? Does the United States have a bigger percentage using
it as the main source?
Mr Richards: I do not think that we have. It
is something we would be very happy to look into.
Chairman: It is something that we should
have asked as well.
Q865 Lord Maxton:
I am not quite clear where you draw the lines in this. I say this
as one of the 6%, by the way, who very largely takes his news
from the internet. If I go on to the BBC website to get my news
and watch a piece of television news as part of that, do you treat
that as part of the television coverage or do you treat it as
part of the internet? If I read a newspaper on the internet rather
than actually buying a copy and reading it, where are the lines?
If I watch ITV news on the internet? I am not quite clear how
you get the 6%, as opposed to the television coverage.
Mr Phillips: In the way that people were asked
the question. If they were watching a video clip on the internet,
that would count as the internet. The question people were being
asked was, "Do you go to the internet as your primary source,
whether you are looking just for text or whether you are looking
for audio or video?". It was therefore people's judgment
as to where they see the balance of their news consumption and
the thing that they felt was most important. Even if someone was
using video regularly on the internet, if their judgment was that
television was their main source then that was how they would
have answered that question.
Q866 Chairman:
A last question from me. After digital switchover—which
is obviously very important—you appear confident that news
provision will continue to be provided from the independent and
commercial television providers; although it will not be as viable
after digital switchover, will it, as it was before? Why are you
so confident that it will continue?
Mr Richards: I would not use the word "confident";
I would use the words "optimistic in some respects".
You are absolutely right: it will be less viable, in the sense
that the amount of implicit funding that ITV, Channel 4 and others
have will be significantly reduced. However, we are optimistic
for the following reason. What we notice from our own analysis,
and indeed from looking around other parts of the world, is that
the main news, UK and international news—the news at 10.30,
the news at 10, and so on—is a feature of significant commercial
networks' schedules almost wherever you go. This includes the
most ferociously competitive broadcast market, which is the USA,
and there is no regulation requiring that there. What that tells
us is that the opportunity cost of having that news in the schedule
is relatively low to the broadcaster, and therefore our ability
to ensure that it continues is relatively high. We believe that
is less the case necessarily for regional news. Therefore, if
there is to be severe pressure in the next few years, it will
be around regional news. It does not mean that we believe now
that regional news will not be possible through the licence-based
system we have had hitherto, because it may well be; but that
is an analysis that we will do as part of our public service broadcasting
review, which we have brought forward slightly for precisely these
reasons. That is how we see it.
Q867 Baroness Bonham-Carter of Yarnbury:
Why are you so determined, or appear to be so determined, that,
post-switchover, you should charge for spectrum—considering
the fact that it could be used, as the terrestrial channels are
now, to encourage PSB?
Mr Richards: You should not always believe what
you sometimes hear. We are not determined particularly; we think
at the moment that, given what we know, on balance that would
be a right thing to do. The reason we think that on balance that
is the right thing to do, given what we know today, is that spectrum
is a scarce national resource. It is like land. If you were asking
someone to provide a news service, a children's programme or anything
else, you would not say to them, "Here is some money. We
would like you to produce a piece of public service broadcasting
or some other activity and, by the way, the land is free"
or "the office is free" or "the electricity is
free". You say, "Here is the money. This is the service
we would like. You go and buy the things that you need in order
to provide that service", and spectrum is one of the things
you should have to buy to provide that service. That is the first
reason. The second reason why we start at that point is because
the last few decades have demonstrated very clearly that if you
give spectrum—a scarce national asset—to people for
free, then they use it extremely inefficiently. The examples of
this are legion. If you give something to someone free, it is
no cost to them and they will just sit on it, because it does
not make any difference. There are many examples of this which
I could give you.
Q868 Chairman:
What are they?
Mr Richards: I am trying to think of one which
will not embarrass somebody.
Q869 Chairman:
We do not mind that.
Mr Richards: A very good example would be the
way spectrum is being used by the Ministry of Defence. For years
and years, the Ministry of Defence has controlled a huge proportion
of this country's spectrum. It has never had to pay for it until
now, and we now make them pay for it. We have already seen, in
the period since we have started to make them pay for it, significant
changes in the way that they are willing to think about using
it. Prior to that, they had no reason to do anything other than
just keep what they had and to sit on it. There is a very good
example, therefore. Now we are in a productive dialogue with the
MoD about how they could sublease spectrum for other uses; how
they could give some of it back to us, in which case they would
reduce the amount they have to pay us. Economic incentives in
spectrum—surprise, surprise!—do work, as they do in
other fields of economic activity. That is our starting point,
therefore. There are two very good reasons why, prima facie, you
would want to charge for spectrum, and broadcasters should be
no different to the MoD; the emergency services, who now pay for
it; astronomers, who pay for it. Everybody else now pays for spectrum,
in order to make sure that there are incentives. However, what
we have said very clearly in our document on broadcast spectrum
pricing is that it will not be introduced until 2014, and that
decision will not be made until we have completed the PSB review
and we know clearly what the right overall policy is. No final
decision has been made, therefore, but I hope that sets out clearly
why our starting point is that everybody should have the right
incentives to use spectrum efficiently.
Q870 Baroness Bonham-Carter of Yarnbury:
It seems to me that, with your land analogy, certainly in the
case of the BBC the licence fee payer has already paid. In a way,
you are asking the farmer, as it were, to pay for his earth—if
you see what I mean—having bought the land.
Mr Richards: You could see it that way, but
I think that the issue with the BBC is not dissimilar to the MoD.
The BBC, for many years, have had enormous spectrum privileges
in radio and television. Do not think for a second that we are
in any way opposed to them having access to spectrum to deliver
the services that we want them to deliver as a country. We absolutely
are not. However, they have had exceptional access to scarce spectrum
for many years; they have had no incentive to use it efficiently;
and, to be frank, I think there is some very real evidence to
suggest that they have not used it efficiently.
Q871 Lord Inglewood:
When you use land, you need planning permission as well as the
land itself. Surely the concept of planning consent should play
a part in this?
Mr Richards: It is a very useful analogy. There
are forms of planning consent in spectrum. Historically, what
we have done is to restrict the use of spectrum in the same way
that sometimes planning consent restricts the use of land. For
example, certain property is restricted to commercial use; other
property is restricted to certain kinds of residential development,
and so on. Historically, we have had an analogous approach with
spectrum, in the sense that we have put specifications of use
on particular chunks of spectrum. As a matter of fact, what we
are trying to do in spectrum is to move away from that, because
we think that if we could relax those rules, wherever appropriate
and wherever it is consistent with people's existing rights about
their use of spectrum, it will make the economy more productive.
For example, if you perhaps owned a piece of spectrum which, 25
years ago, you were told was only allowed to be used for one particular
technology and that technology is now obsolete, it does not seem
to make any sense for us to persist with that specification. We
should try to get to a position where you should be free to use
that spectrum for whatever is the purpose which delivers most
value to consumers in the economy; and you should be free to make
that choice, consistent with not interfering with other spectrum
owners. Generally speaking, that is the direction in which we
would like to move, and we think that there is a many-billion
pounds opportunity for the UK economy if we can move in that direction
over the next five to 10 years.
Lord Inglewood: Make money, building
houses on the green belt—but I will not pursue it any further.
Q872 Baroness McIntosh of Hudnall:
I think that all analogies break down eventually, and that one
may just have done so! Can we talk briefly about the operation
of the 2003 Act, in relation to your responsibility to ensure
a sufficient plurality of news? You talked earlier about the difference—you
did not put it like this—between news and opinion. The availability
of sufficient plurality of news as opposed to opinion depends
to some extent on whether you have the appropriate powers as a
regulator to make sure that that is there. Reflecting on the operation
of the Act over the last four years, do you feel that you do have
adequate powers and resources? Do you see any opportunity for
those to be enhanced or changed? How do you see the future?
Mr Richards: Probably the single, most important
feature of the Act—particularly for the public service broadcasters
who dominate the news provision in this country—is the impartiality
requirement, and I think that our powers on that are very clear
and effective. I think that they work very well. We have a second
power, namely to ensure high-quality news—which is why we
do the kind of analysis that we do—and at the moment we
have no reason to believe that that is not sufficient. We have
a third power which relates to the resourcing of Channel 3 news,
to ensure that there is sufficient resourcing to make sure that
that provision is of high quality. However—and in a sense
it is theoretical, because I would not suggest that this is a
real problem for today—the areas where we do not have an
equivalent locus is in relation to resourcing of Channel 4, Channel
5, and regional news. That was a conscious and deliberate decision
at the time of the Act because of the particular significance,
which you see in the audience numbers, of Channel 3 news. The
audience numbers for Channel 3 news are way in advance of Channel
4 and Channel 5 news. By and large, therefore, the answer is yes.
If, for the purposes of perfect symmetry, you wanted to identify
some apparent omissions, you would do it in the way that I have
described.
Mr Phillips: It is worth adding, though, that,
if one looks forward to post-digital switchover, some of those
tools may look slightly different post-switchover. It is possible
that a new set of approaches may be needed at that point.
Q873 Baroness Scott of Needham Market:
We may come back to this a little later, but you did mention quality.
Can you briefly say—difficult, I know—what are your
main criteria for establishing that the quality of news output
is sufficient; that it meets your standards?
Mr Richards: In terms of the analysis we did
in this document, which is a sort of first indicator, it goes
without saying that there is a degree of subjectivity in relation
to that question which makes it very difficult. We would not sit
here today, saying that we have some oracular wisdom which says
that we know exactly what quality is and that no one else does.
We would never ever do that. What we can do is to look at various
forms of analysis, which give us an indication. One obvious change,
which is the one we looked at in this study, is to say that if
the news bulletins were still happening but it was all just entertainment
and celebrity news, it is unlikely to meet our view about what
high-quality news is. However, as Peter explained, the data period
we looked at suggested that, if anything, the quantity of international
news, which is a very good test of the seriousness of a programme,
and political coverage, which is a very important dimension of
news coverage, for obvious reasons—because of the role we
see news playing—generally speaking, had either stayed the
same or moved up in terms of the significance they had on bulletins.
That is one indicator that we looked at very closely.
Q874 Lord Inglewood:
Do you think that there is any kind of conflict between the impartiality
rules and the provision for diversity of opinions more generally?
Also, a specific question which arises out of our trip to the
United States, where we understood that the legislation had been
changed, and that to exclude the publishers of blog sites from
liability in defamation would be desirable.
Mr Richards: I did not know that. That is very
interesting.
Q875 Lord Inglewood:
That is what I understood to be the position.
Mr Richards: That is very interesting. Does
impartiality diminish the diversity of supply and how much do
we care about that? We have raised the issue in the context of
our report because there is some evidence that, in some parts
of our country, there is a degree of disengagement from news,
and I think that is a concern we would all share. What is the
link to impartiality? The link to impartiality is that, even though
we prize impartiality very highly—and we do—the question
it raises when it is applied across the board is whether to some
degree that is forcing the style and character of news coverage
to the middle; whether it is making it somewhat more homogenous
than it would otherwise be; and whether, if that is so, it is
reducing news providers' ability to reach certain parts of the
audience we would like them to reach. That is the question. We
are open-minded about it and have raised it as a possibility.
I do not think that we have a definitive view on it. We are certainly
very cautious about any change which would jeopardise the role
that impartiality plays, particularly for the public service broadcasters.
I think that it is an essential part of what they do. The question
we were raising was really whether one needs to ask about the
overall diversity of supply beyond the PSBs, especially given
the internet. If people are getting broadband internet in their
living room, they are getting impartial news from a whole range
of sources in any case; so the question will not go away.
Q876 Lord Maxton:
There are two areas here. We are moving to the digital switchover.
Whether we believe that the way it is being done is the right
way is another matter. The fact is that everybody will have access
to multi-channel television, and that also means multi news channels.
I was not quite clear, when you did your survey and when you said
"television news", how much of it was BBC24, Sky News,
and so on. However, when we move to that, there will be news channels—particularly
on Sky and the cable channels—which are not produced and
run in this country. Can you regulate them? Can you regulate for
impartiality, for instance, CNN and all of the other American
channels which we get? Fox News is clearly not impartial.
Mr Richards: It is a very good question. I think
that you see that on satellite and cable already. You may see
it on Freeview. I cannot remember. I do not think that Fox is
on Freeview, is it?
Q877 Lord Maxton:
No, Fox is not, but Sky News is.
Mr Richards: By and large, it is satellite and
cable. We absolutely do regulate Sky for impartiality. We should
be very clear about that. It is a very good service and we have
had no reason that I can recall to do anything other than believe
that they meet that element of the broadcasting code quite properly.
However, the internet will bring another wave of this, and is
bringing another wave of it forward. Hitherto, we have not sought
to regulate the channels like Fox, and there are two or three
others. There is a Russian channel; there is a Chinese channel;
there is Al Jazeera; there is a whole series of these channels.
The reason why we have not so far done so is because there are
two defining differences which mark them out as very different
to the main UK channels. The first is that they are targeted,
very clearly and explicitly, at a different audience. Their presence
in the UK is really a re-broadcast. Fox News is targeted at the
American audience. It is an American news channel and it is re-broadcast
in the UK. That is the first difference. The second difference
is that, certainly at the moment, they have extremely small audience
shares. If you compare them to, in particular, the PSBs and if
you add in Sky News, in terms of the impact they have, in the
sense of the relevance they have to the vast majority of people
and the hours of broadcast news that are being consumed—which
are very substantial—they are extremely marginal. That is
how we have looked at it so far, but it is something that we may
have to review and reflect upon in the years ahead.
Q878 Lord Maxton:
You made the point yourself that possibly the next big breakthrough
in technology will be, if you like, the internet on your television
set, controlled by your remote control in the same way as you
presently control television. That brings a whole new area, in
terms both of news and general broadcasting. How can you regulate
that? Can you regulate that in an individual country or will you
have to go internationally—if we want to control it?
Mr Richards: Please do not interpret this the
wrong way, but the technical answer to "Can you regulate
it?"—the answer to which everybody used to believe
was the one which the technologists gave, namely "It's impossible"—is
not true. You can, if you want to. They do so in a whole variety
of countries, some of which approach this issue in ways which
I think we would regard as slightly undesirable. They do it for
purposes of social and political control. You can do it, however.
The question, therefore, is whether you think it is desirable
to do so. By and large, we have taken the view hitherto that it
is not desirable to do so because it was a growing, nascent sector
in industry with a huge amount of innovation, and the last thing
it needed was some heavy boots coming in and sticking regulation
all over it. However, the issue is one that is coming towards
us, and we will have to decide as a country how we want to deal
with it—for precisely the reasons you have said. Even if
we do not see the kind of broadband-on-your-conventional-television-screen
model of convergence—which we may not—I do not think
that matters. What you see is a lot of people with PCs in their
living room and the children are downloading and watching stuff
at the same time as watching television. Sometimes I do that the
other way round with my children. That is the world we are heading
towards. The issue will be there. It is one of the reasons why
we raised the long-term question about how we think about impartiality
in that context. In that world, you cannot continue to pretend
that everything could or should be, automatically, everywhere,
in all instances, regulated with the kind of impartiality rules
that we apply to the public service broadcasters. What we may
need to do, as we look forward, is to think about an approach
which recognises that, in some areas, in some sources of media,
they are beyond that form of regulation; and, so long as people
understand that and are aware of what they are getting, that is
something we may want to be relaxed about. I do not think for
a second that it means that you trim your position on core impartiality
for the core public service broadcasters who dominate, and who
will in my view continue to dominate for many years, the provision
of news and information in this country. It may be that we have
to think about a variegated approach over time, therefore, because
that is the reality of the way in which people are consuming news,
in the full range of what they have access to.
Q879 Chairman:
There are difficulties with this, are there not? There was a recent
case concerning blackmail when, if British newspapers had speculated
on the person concerned, they would have been in contempt of court,
and doubtless all kinds of other things. However, I gather that
if you went to the internet, you could see a name being bandied
about. Is it possible to regulate, to guard against that kind
of intervention?
Mr Richards: We are not experts on the defamation
issue and libel, and so on—
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