Examination of Witnesses (Questions 1320
- 1339)
WEDNESDAY 9 JANUARY 2008
Ms Jocelyn Hay, Professor Ivor Gaber and Mr John
Clark
Q1320 Baroness McIntosh of Hudnall:
On this question of influence, could I go back to the point that
was raised about the influence of advertisers. We have raised
this question with one or two regional news organisations and
they have consistently said to us that this influence does not
prevail; that a fear of offending advertisers, as it were, does
not affect editorial policy. You have said there are straws in
the wind but do you have any evidence that this is going on?
Ms Hay: I have an example from independent local
radio from a few years ago. A personal contact of mine, a friend
of mine who was a programme controller of a local radio station,
took up and featured a feature on car servicing. This was a generic
programme, if you like, about garage scams which went out on his
local radio station. One of their local garage advertisers took
it personally and objected strongly and that controller was brought
in and told, "You will never, ever do this sort of thing
again." It was the last straw as far as he was concerned,
and he handed in his resignation. It is difficult for me in public
to give the name and chapter, but I have the name.
Q1321 Chairman:
How many years ago was that?
Ms Hay: It was some years ago. Off the top of
my head, I cannot remember, but it was probably ten years ago.
It is an indication of how subtle pressure can be brought to bear.
It is not so much about the overt side, which is obvious, but
this economy with the truth, if you like: things not done which
might be done, because they might offend.
Q1322 Bishop of Manchester:
Professor Gaber, you mentioned earlier, as an example, the effect
of Fox on CNN. I know it is abroad but, nevertheless, you did
raise it as an example. I wonder, without going into too much
detail, if you could give a specific example.
Professor Gaber: I cannot give you a specific
example because it was across the range of outputs. CNN, I think
most commentators on the broadcast scene of the United States
would agree, was seen, firstly, to move its agenda rightwards
and to adopt a more "patriotic" tone. It all started
with the so-called war on terror: CNN started to wear the US flag—this
they had not before; they started to use a strap line very similar
to Fox's. For example, they used to have an environmental programme—and
when this began, four or five years ago, the environment was still
seen as a progressive, left of centre issue in American political
discourse. They dropped their environmental programme. I think
most observers would accept that CNN shifted in order to try to
counteract Fox. In fact, it lost viewers. There is also an argument,
that I would be less confident in making, but which others have
made, that the American networks themselves, CBS, NBC and ABC,
also shifted their agenda in response to Fox. Fox is now the most
watched television news channel in the United States.
Q1323 Baroness Thornton:
Could we turn to some questions which are about defining public
interest. In your evidence, in terms of news provision, you mention
four criteria with which we are all familiar: universality of
provision, impartiality, plurality and diversity. Could you discuss
with us which of these you think is under the most threat in the
current broadcasting environment?
Professor Gaber: At the moment, I think plurality
is. There is no immediate change in terms of the terrestrial suppliers—but
in terms of the 24-hour news markets, we are now down to two news
suppliers. We did have ITV. ITN could not sustain in the ferocious
competitive environment in which it found itself. Diversity is
a constant issue. Is it to some extent being solved by the Scottish
news and current affairs provision being separate? I am not sure.
For me personally it is the plurality issue. Again it is potential.
We are talking about potential threats, apart from the ITN 24-hour
news.
Ms Hay: Might I add to that our concern about
radio and independent radio. There are threats to the diversity
and plurality of news on independent radio particularly. We are
concerned about the cutbacks, of course, in ITV with its regional
news. There is a fear that it could only be the BBC that could
be left to provide that kind of news. IRN is a case in point,
where the newsrooms have been cutback, so the resources are not
there, and nor is the plurality.
Q1324 Baroness Thornton:
Which of the four criteria we have accepted do you think requires
the greatest degree of regulatory intervention to protect the
public interest?
Professor Gaber: There is a problem in answering
a question like that. As soon as one says "This one"
it gives a downgrading to the others. It is a bit difficult to
choose in that sense, because it seems to me that they are a thread,
they hang together. If you do not have all four working, it is
difficult to claim that you have the public service news service
for which one would argue.
Q1325 Baroness Thornton:
Do you think the regulatory environment recognises that?
Professor Gaber: The current regulatory environment?
Q1326 Baroness Thornton:
Yes. Does it recognise that all four hang together and deliver
that?
Professor Gaber: Good question.
Q1327 Baroness Thornton:
It is not an exam question.
Professor Gaber: No.
Mr Clark: In a way, one could perhaps put diversity
at the top of the pile because it would then bleed down into virtually
everything else which is there. Without the diversity, you are
not going to have the impartiality and you are not going to have
the universal use. You may have the universal access but you are
not going to have the universal use. The regulatory environment
certainly does not work well for diversity at the present time.
For example, if you take the Ofcom Content Board—and I have
yet to hear them make a pronouncement on content—it does
not seem to meet that particular need. But, as Ivor says, they
all do link together and it is very difficult not to downgrade
one.
Q1328 Baroness Howe of Idlicote:
Just going back to some of the earlier points you were raising
about the citizen-consumer `merger', public interest and so on
which you have set out very clearly in your evidence to us—the
fact that the public interest test is contained in the 2003 Act
and Ofcom has operated a general orientation towards deregulation
and marketisation, and that is a very commercial type of construction—could
you be a little more specific really about why you think their
duty to promote competition in the interests of consumers really
rules out the citizen; not least in the light of the fact that
Ofcom have repented to some extent and have now agreed to keep
the citizen and consumer separate? They see a commonality of interests
in some respects but not in others. Are you as worried about that
as you were before?
Ms Hay: It has taken them three years to do
that. It has—and we still have some concerns about it. The
point is that it is so much easier to deal with the consumer interest,
which involves value for money and much more measurable aspects
of the world, than the citizenship side, which deals with a lot
of fuzzier issues, like citizenship and democracy and culture
in which the benefits are much more difficult to quantify. It
does seem that Ofcom is
acting much more as an economic regulator. We
are very pleased that Ofcom has now recognised, for instance in
the issue of children's programming, that there is a deficiency
there and there needs to be a public interest intervention, and
that on the news side there is a public interest which is not
necessarily easily quantifiable in monetary terms, and the fact
that they have brought forward their public service review. But
when we talked to Ofcom—the meeting we had last year with
the Content Board—they said they were powerless to do it,
that the Act did not give them the powers to impose positive requirements.
Yet when we look at the Act in regard to news, section 279, clause
600, does require Ofcom to include conditions in the licence of
all public service channels in order to secure that programmes
included in those channels include news and current affairs programmes,
so there is a positive obligation on Ofcom here to provide news
and to see that it is provided. The difficulty is providing the
financial means for the broadcasters to do it in a much more competitive
world. One of the suggestions we had was for tax breaks.. Perhaps
one of my colleagues would elaborate on that.
Professor Gaber: It is very much a back-of-an-envelope
thought but, when we were discussing and thinking about positive
measures rather than negative, it occurred to us that there is
a case to discuss, the possibility of encouraging the maintenance
of public service news (as I will call it for shorthand). That
is in order to encourage what were the terrestrial broadcasters,
ITV, Five and Channel 4, to continue to show high quality news
in peak time they could perhaps be offered some tax breaks on
the amount of money they spend on news. We are building on the
old ITN model. ITN was subsidised by the ITV companies to provide
news. That has now ceased. There were severe concerns about ITN
and the quality of its output a couple of years ago. I have to
give credit and say the ITV companies have started to turn that
around and the quality of ITN I think is recovering quite significantly,
but I think in the longer term there is a real problem. To come
back, Lady Howe, to your original question about citizenship:
particularly looking at the issue of the under 25s, and perhaps
even the under 34s, and the ethnic minorities—they are all
avoiding news in vast numbers (if vast numbers can avoid something)—we
need to work out how do we reach those groups. One way is to encourage
the main channels to put out news which is going to reach them,
which will not necessarily meet any commercial tests, and that
does require subsidy. We are not arguing for direct government
subsidy but we do think there might be a case for looking at tax
breaks as a way of encouraging news output after DSO.
Q1329 Baroness Howe of Idlicote:
Surely if there is a duty, as you have spelt out, in the Act itself,
Ofcom has the power to decide how it spends its revenue. Is there
not a case for trying to ensure that it spends rather more of
its revenue on some of the things that you are talking about?
Professor Gaber: We are quite keen to look at
carrots rather than sticks.
Q1330 Baroness Howe of Idlicote:
We all are.
Professor Gaber: We would like Ofcom to find
positive ways. Secondly, I have to say that the track record of
Ofcom in intervening in terms of programme content is not hugely
encouraging.
Q1331 Chairman:
You would prefer your incentive method to the other popular view,
which is that you top-slice the licence fee.
Professor Gaber: Top-slicing the licence fee
raises all sorts of other issues which relate to the future of
the BBC, the structure of the BBC, so, yes, remaining neutral
on top-slicing for the purposes of this debate I think it is more
attractive. We have had all sorts of tax breaks in the past. ITV
has had significant tax concessions. I think it is quite an attractive
option.
Mr Clark: I would just add: Keep the commercial
element commercial.
Q1332 Baroness Bonham Carter of Yarnbury:
You were talking about tax breaks. Ofcom, of course, is suggesting
that they are going to charge for spectrum once digital switchover
happens. I was wondering what your response to that is.
Ms Hay: That is going to put the broadcast companies
into a very difficult position vis-a"-vis the big telecoms
and other companies and the big multinationals. It is going to
mean it will be very difficult for the smaller companies to compete
in that market, so we are not in favour of that kind of move from
Ofcom. It is a separate debate, but certainly there are many public
interest issues here which have not been fully thought through.
It is too simplistic, again, here: Ofcom coming in as an economic
regulator, relying on finance, but where are the smaller companies
going to get the money? It is going to put them in competition.
Q1333 Lord Maxton:
I am slightly concerned about this whole argument. I am old enough
to remember when the only news was the BBC news on the radio,
and then on the television. We live in a much more diverse television
news world. We live in a world which will be even more diverse
in 2012, for everybody, because there will be new services which
are not national but international. We also live in the internet
world, and the next stage will be the internet controlled on your
television, not on your computer. That will give you an enormously
diverse range of news. People will also get the news on a variety
of different devices, so you do not have to go home and sit in
front of your television set to find out what is happening in
the world. Do we not live in a much more diverse world rather
than one which is limited in the way you have suggested?
Ms Hay: We do. I was going to come on to this
in response to Lady Howe's question. It is terribly important
that we have those outlets and use those delivery methods as well,
but it is the preparation of the news that goes out on those,
the content, that is so important. In the future diverse world
that is going to be increasingly important, because all sorts
of other biased and partial sources of news will be coming from
all over the world, but what do you have to balance against them
unless we have quality news in this country? Someone has to produce
that and that will take resources.
Professor Gaber: I totally agree with what you
have stated but the evidence we have from news consumption in
this country and the United States is that consumers or citizens
or viewers or listeners still prefer to go to news sources on
which they can rely. You only have to look at the popularity of
BBC News online or the Guardian or the Times online
to show that even in a diversity of outputs people will tend to
go to those outlets with which they feel secure. Whilst we are
going to be in a multi-platform environment, I do think the big
news suppliers will remain the big news suppliers, whoever is
carrying the news for them.
Q1334 Lord Inglewood:
I should declare an interest as a patron of VLV, which I am very
pleased to be. In response to the last remark Ms Hay said that
what mattered was that in the UK there should be a core of quality
news. Does that mean that the VLV is approaching this from the
perspective that, as long as we retain the core in this country,
the rest is less important? Are you suggesting to us that policy
in this country should be that we should have a core of quality
news provision or that the news provided in this country all should
be of quality?
Ms Hay: I am suggesting here that certainly
the principal outlet should be of quality and by impartiality
rules. I think that includes all our main sources. When you are
into an internet world—and I am speaking off the top of
my head now—you cannot control every person that puts out
news or blogs or whatever else, all of which in future will be
part of the media scene, it is difficult to do that. Nor can you
control the sources that are coming into the UK on the internet.
We will be in a much more diverse world, so it is increasingly
important from that perspective that we have something against
which to measure it. Does either of my colleagues want to add
to that?
Professor Gaber: I agree.
Q1335 Lord Corbett of Castle Vale:
Could we turn to the role of the Secretary of State in media and
mergers. In paragraph 4(b) of your written evidence you say that
there are circumstances where the Secretary of State, when taking
a decision whether to make a reference, could have some kind of
conflict of interest. Can you explain how this might occur?
Professor Gaber: Yes, and then let me give you
the solution. Let me give you an inappropriate example, the immediate
one in recent years of the BBC. I know we are talking Ofcom and
not the BBC, but it is a good example. We could go back to Death
on the Rock with Thames, but the BBC example is more fresh in
our memory. This is no reflection on the then Secretary of State,
who I think acted extremely correctly, but, nonetheless, with
the BBC and the Government in direct conflict about a major issue,
about weapons of mass destruction, had, at that moment, a media
merger issue arisen which involved the BBC—which obviously
it would not because we are talking about newspapers and television—then
one would have said that the Secretary of State was in a very
difficult position to make an objective judgment, given the cauldron
that was boiling. Clearly it could arise with newspapers, a newspaper
hostile or supportive of the Government, involving a merger and
so forth. We did consider this and we thought the Secretary of
State clearly, politically, needed a role. This would be a big
political decision. But we also thought there might be a case
for suggesting that he or she acted on the recommendation of perhaps
a joint panel, of perhaps this Committee and its opposite number,
the DCMS Select Committee in the Commons, which could take a broader
view, would be less government dominated and, if it came to the
crunch, after having gone through the process, could make the
recommendation to the Secretary of State whether they vetoed or
approved a particular media merger. We think that would reflect
a wider democratic consensus, if you like, about the appropriateness
or otherwise of the proposed merger.
Chairman: A marvellous idea!
Lord Corbett of Castle Vale: You have
done very well, Professor, you have also answered the question
I had not yet asked.
Q1336 Baroness Howe of Idlicote:
In your evidence you mention the Ofcom Consumer Panel as being
an objective area. Would they not be seen as a little bit too
close to Ofcom itself?
Ms Hay: The Ofcom Consumer Panel seems to be
doing very good work on behalf of the consumer but they will not
touch anything to do with content. When we have tried to take
content matters to them they have said, "No, that is not
our role. We are the Consumer Panel." They have done some
excellent work on telecoms and other things. I am delighted that
they have at last made a recommendation about that. Their final
recommendation under their former chairman was to recommend that
Ofcom do something about children's television. It is the first
time, I think, they have made any comment on content at all. Under
their previous chairman they seemed to be pretty independent in
their rulings on consumer issues.
Baroness Howe of Idlicote: I would certainly
agree with that.
Q1337 Chairman:
Professor Gaber, to go back, the essential point you are making
is that the Secretary of State's involvement can also involve
a conflict of interest.
Professor Gaber: Potentially, yes. There are
circumstances one can envisage.
Q1338 Chairman:
That applies under any government.
Professor Gaber: Yes.
Ms Hay: The media is so important politically—in
the things which come up just before an election, for instance.
Particularly now, where you have concentrated cross-media ownership
of newspapers and radio stations and television stations, there
is, again, huge potential for subtle, behind-the-scenes pressure.
Q1339 Baroness McIntosh of Hudnall:
Extending this out a bit, I would like to ask you a couple of
questions about the complexity of the regulatory environment,
which is an issue which is quite topical just now, since this
pertains in other areas apart from here. Do you think there are
problems that arise from having four bodies involved in regulating
the media markets? If you think there are problems, can you see
any immediately obvious desirable reforms that could be put in
place that would address some of those problems?
Mr Clark: The problem is one, as you say, which
goes across a whole lot of regulatory bodies and it is rather
difficult to make a special case for broadcasting as being different
from other types of commercial operation. Plainly, it is a very
tedious process at the moment: the reference to the OFT, the reference
to the Competition Commission, the reference to the Secretary
of State. Time seems to be the real problem in it. Huge swathes
of time disappear in the whole thing. We have not thought out
a recommendation to simplify that in terms of the number of bodies,
because it is too tied up with the rest of the legislation in
the country, but we do feel that there are certain very strict
time limits which might be applied to a circumstance which moves
very fast. The BSkyB issue has now been running some nearly 18
months, I suppose, or something like that, and they are no nearer
finalisation.
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