Examination of Witnesses (Questions 1340
- 1359)
WEDNESDAY 9 JANUARY 2008
Ms Jocelyn Hay, Professor Ivor Gaber and Mr John
Clark
Q1340 Baroness McIntosh of Hudnall:
Could I drop the second question in at this point, since you have
mentioned that, which is to do with the level of expertise that
is available in assessing these issues. You have indicated that
time is the most significant problem. It might be said that part
of the reason why these things take time is the number of different
points of view that have to be consulted and the level of expertise
that is required to address them. Do you feel that, for instance,
the Competition Commission has sufficient expertise to address
the issues that arise from the BSkyB investment in ITV?
Mr Clark: No, I do not. I doubt whether they
would actually claim it themselves, when they see the breadth
of the issues that are involved. No, I do not think they do have.
You are then talking about potentially introducing yet another
layer into the whole thing. That was part of our recommendation
of this joint committee, overcoming that particular point. However
unacceptable it might be to the Government, that was the thought.
No, there is not the expertise there. There is not the expertise
in the OFT either. There is no reason why there should be with
what they are accustomed to doing. One needs to introduce a modifying
factor which does take into account broader issues than they are
capable of comprehending.
Ms Hay: Surely, in this case, when you are talking
about expertise, you are also talking about resources that they
can use. The Competition Commision needs the resources to do its
job. If it does not have the resources to do its job, what is
the point of having it? It does need resources. Surely it can
buy in and bring in expertise on particular aspects as necessary.
Q1341 Baroness McIntosh of Hudnall:
Just to be clear, are you saying that it is your view that the
Competition Commission, for instance, is significantly under-resourced
or that as we go forward and these issues become more complex
or more numerous the resources will need to be enhanced? Is it
a current issue or an issue for the future?
Ms Hay: I do not know. It is beyond my competence
to know exactly what resources the Competition Commission has.
Q1342 Baroness McIntosh of Hudnall:
But you imply that you think there is an issue of resources.
Ms Hay: If you have raised it and there is not
sufficient resource there, then I think it needs more resource.
I remember, at the time when Ofcom was being set up, that we were
one of the organisations that actively argued that Ofcom should
have a sufficiently large fund to enable it to withstand other
parties taking it to judicial review, because it would need a
legal fund to be able to fight challenges. In the same way, the
Competition Commission requires the resources to do its job, otherwise,
there is no point having it. Do you have anything to add?
Professor Gaber: No.
Ms Hay: It is beyond our competence to know
whether it has those resources or not.
Baroness McIntosh of Hudnall: We are
seeking your views, though. You implied that you think there is
an issue about resources and we hear you.
Q1343 Chairman:
You said an interesting thing. You said that you did not think,
as I understood it, the media was a special case in these areas.
Could you not make the argument that as it has a rather crucial
impact upon democratic debate it is rather a special case?
Mr Clark: I have misled you. I thought I said
it was difficult for it to be a special case within the legislation
that we have. If we argue that there should be another body involved
taking decisions, immediately we are saying it is a special case
but we are making it a special case outside the OFT, outside the
Competition Commission. We are not making a special case within
there. If, on the other hand, we go down the route of the Competition
Commission having additional resources which cope with media regulation
in a different way, then you could say that is a special case
within the Competition Commission.
Q1344 Lord Hastings of Scarisbrick:
You have been, if I may say so, fairly critical of Ofcom throughout.
You might have good reasons for doing that but you are implying
that it is insufficiently able to meet the interests of the citizen.
It has been a consistent line of your thought. How would you change
Ofcom or improve it or change the legislation to make Ofcom more
sufficiently able to fulfil the regulations or responsibility
it has, particularly in terms of news provision?
Professor Gaber: It is a question, it seems
to me, of practice rather than legislation. The famous phrase
was "light touch". In fact, at times, it seems it is
an invisible hand. It has been extremely reluctant to act on occasion.
When we have been to see them about various things, they have
always pointed out what they cannot do rather than then can do.
In my view, it is an attitude of mind, Ofcom see themselves as
market regulators, therefore letting the market play out and only
acting when they are absolutely forced to. We would like to turn
that around. We would like the bottle to be half full in terms
of acting out, or half empty in terms of letting the market play
out.
Q1345 Lord Hastings of Scarisbrick:
Do you think that is the fault of Parliament for setting the wrong
tone for Ofcom?
Professor Gaber: There was certainly a political
tone at the time, the notion that the market was the best way
of sorting out most situations. One does not need to revisit all
those arguments, but I think the practice has shown that there
is on occasion market failure and Ofcom needs to have a broader
view. As we have said, we fought very hard to get the word "citizen"
into the 2003 Communications Act, but the words "lip service"
come to mind, and we would like them to be more aggressive, or
more proactive, in terms of their obligations towards citizens.
Q1346 Lord Hastings of Scarisbrick:
What would you now do?
Professor Gaber: I cannot quote to you the changes
in legislation. Within the current remit they have, I think they
could be more proactive in the way they approach broadcasting.
I do not know of one occasion where they have intervened in terms
of, let us say, news and current affairs; there might have been
occasions but if there were they have slipped my mind. Okay, they
are not the publisher, they are not IBA, but one does not have
the sense, in my dealings with broadcasters, of them constantly—as
I feel they should be—looking over their shoulder and worrying
about what Ofcom will be saying about this programme or that programme.
They might well be concerned about Ofcom's view of their share
price or whatever, but not in terms of content. Before I let all
of these questions go, I am sure Jocelyn has some things she would
like to add.
Ms Hay: It is very difficult, now that it is
set up and the ethos is established, to change an institution
that is already working and set up. I think it is interesting
that under its current Chief Executive Ed Richards there seems
to be a slight change in tone towards public service from what
there was before. I think the indication of bringing forward the
public service review, the commissioning of the review of children's
television, is an indication of that, for instance. The only thing
I can think of immediately is to strengthen the role of the Content
Board. The Content Board appears to have very little power at
all and its views are not necessarily taken notice of. They are
very seldom reported in Ofcom's annual plan and its annual report.
There is very little mention of the Content Board, apart from
handling complaints, and there is very little news about that—I
mean, they issue a bulletin, but it does not seem to have much
impact. I do think they could strengthen the role of the Content
Board. For instance, a year ago, when ITV said it was going to
drop its non-news regional programmes, the Content Board advised
that that should not happen for a year but the main Board took
no notice of that report at all. I think much more notice could
be taken of the Content Board.
Q1347 Lord Hastings of Scarisbrick:
Do you think, therefore, there are too many boards in Ofcom, that
if you simplified the structure then the main leadership would
take direct content responsibility?
Ms Hay: That I do not know. I do remember when
Ofcom was set up. Do not forget that Ofcom took over the work
of five different regulators, so if you are going to have a very
small board at the top they are going to have an enormous number
of issues and expertise to deal with. That is something which,
again, is beyond my competence. I know that was one of the concerns
that we had at the time, that broadcasting would be dealt with
on Friday afternoon because so many other economic issues, to
do with telecoms and other things, would take precedence.
Q1348 Baroness Howe of Idlicote:
Picking up on this point about one board: is there a case—which
certainly was argued at the time—that the Content Board
should have the same semi-independent status as the Consumer Panel,
so that where there were differences they could be publicly explained?
Would this not be one of the ways in which you could get a slight
move—more gently, maybe, but nevertheless a move—towards
consideration of content issues? Just being an optimist, as I
tend to be: clearly Ofcom had a major role—which I think
it has done pretty effectively, if I may say so—in the economic
world and that side of it, but might there not now be room for
a move towards considering, under maybe new leadership, the whole
content area rather more seriously, not least because of the public
service interest, of the whole of the new media to our democratic
way of life?
Ms Hay: Yes, I do.
Mr Clark: We did argue very strongly for the
Content Board to be on a very similar footing to the Consumer
Panel immediately after the first Bill came out. That was dismissed
at the time. We would certainly favour that.
Ms Hay: The Content Board was a late addition,
as was the need to serve the interests of citizens. They were
late additions to the Bill when they went through. The argument
that was given to us was that the Chairman of the Content Board
was Deputy Chair of the main Board, that it was part of Ofcom
and therefore had more strengths. That does not seem to have worked
in practice, so maybe it would be an idea to make it more independent
and maybe more notice would then be taken of it. The Consumer
Panel has an annual budget of about £1 million, so it can
do research, it can do all sorts of things which the Content Board
does not appear to do. In our response to the Ofcom consultation
on children's programmes, we did suggest that they should set
up, for instance, a special forum or panel or person with responsibility
for serving children, to look at children's issues, in the same
way as they have a special interest group for older people and
those with disabilities. The aspect of the media that makes it
so different from other enterprises is the impact on culture and
democracy. Therefore it cannot be treated, in our view, in exactly
the same way as other commercial enterprises.
Chairman: We are coming towards the end.
Lady Eccles and then Lady Bonham Carter.
Q1349 Baroness Eccles of Moulton:
I would like to return for a minute to the question of commercial
PSB news and what the situation would be after DSO. Once the funding
through the free spectrum, the advantage to them through the free
spectrum ceases to exist, will they still have any incentive off
their own bat, as it were, still to be producing news? Why should
they? What will their incentive be?
Professor Gaber: I think there will be some
incentive. One looks at the model of Rupert Murdoch in launching
Sky News, which he did—and he was quite specific—for
prestige reasons but also to try to serve his audience. I am not
a totally doom and gloom merchant, I think the terrestrial channels
as of now will continue to provide news. However, whether it will
be of the quality and the diversity currently provided, that we
now have, is a moot point. There are potential dangers and that
is why we are suggesting they need to be encouraged by subsidy,
by tax breaks, to maintain the quality. I have just come back
from the two boom economies of India and China. Both have a staggering
number of 24-hour news channels. A staggering number. Whether
it is the market or the party, they are incredibly uniform. More
does not necessarily mean more diversity. My concern about news,
post DSO, is that we might get more diverse sources of news but
that we get less variety. Flicking through the channels in my
hotel rooms in China—and, I have to say, my Chinese is non-existent
but, nonetheless, one talks to colleagues and one can see—the
uniformity that comes from multiplicity is scary. We do need to
find ways of preserving our existing quality and diversity.
Q1350 Baroness Eccles of Moulton:
Presumably, unless there is some form of financial support it
will not be possible to regulate it. If it is completely independent
of all central funding support, and if that is the case, do you
consider that Ofcom is sufficiently resources to be able to continue
to perform that service?
Ms Hay: Ofcom issues licences to broadcasters
in this country, so Ofcom has the power to put conditions into
those licences.
Q1351 Baroness Eccles of Moulton:
Ofcom has a very agreeable relationship with the industries that
it supervises. This can be quite unusual as far as regulators
are concerned, but I think the industry as a whole respects Ofcom.
Can you see that that relationship could be at risk if the ways
in which Ofcom can regulate its industries in the future are altered?
To what extent do you consider a good relationship to be a valuable
component?
Professor Gaber: I think the relationship between
a regulator and the people who regulate is a very difficult one.
There should be a tension there. I don't think that a close and
warm relationship is what we should be aspiring to. Clearly there
needs to be a degree of co-operation and understanding, but I
do think that the licensees should be very wary of Ofcom and concerned.
In their discussions, whether in the boardroom or the newsroom,
there ought to be the occasional reference to, "What would
Ofcom say if we did that?" I would like to see a little bit
more creative tension, a bit more grit in the relationship.
Q1352 Baroness Bonham Carter of Yarnbury:
Do you think, post digital switchover, there should be quotas
imposed for news provision? I suspect you are going to say yes.
If so, how can they be enforced?
Professor Gaber: As Jocelyn said, there are
licences to be awarded. We do not have too much of a problem with
the current wording on the news provision on the licences. We
have some anxiety as to the degree to which it is enforced. The
second thing is the carrot we mentioned: we would want to encourage
news diversity. Should there be quotas? I do not think it would
be appropriate for Ofcom to say, "There must be news at 7.30
to 7.45" or whatever, but I do think issues of peak time
of quality and so forth, as set out in the Communications Act,
are appropriate. It is a question of the enforcement of the legislation
that concerns us rather than the wording. We would be content,
I think, for the current system to roll over as long as enforcement
was there and with the addition of possible subsidy as well.
Ms Hay: It actually says that Ofcom should work
out the amount with the broadcasters, so there is some leeway
there.
Q1353 Baroness Bonham Carter of Yarnbury:
What you said about the timing of news is interesting. One of
the things we discovered when we were in America is that, because
of commercial pressures, the news programmes are all at times
when it is inconvenient for people to watch them; for instance,
they are on their way home from work. The timing of the news is
quite important, is it not?
Professor Gaber: Yes, although, just reading
the Act, it does say that what constitutes peak viewing time has
to be actively considered. There are deeper arguments than there
were. When ITN ran its main news at 10.30, it is arguable that
that was still peak. It might be in London; it is certainly not
out of London.
Q1354 Baroness Bonham Carter of Yarnbury:
Particularly if they moved it around.
Professor Gaber: Indeed. What happened to ITV
and ITV's news over the last five years—and I still think
of it as ITN but I am old-fashioned—is a real lesson in
what can go wrong when regulation is light touch. If you look
at ITN's viewing figures, they are tragic, and one has to point
the finger at Ofcom for allowing that situation to happen.
Chairman: Lady Scott and, finally, the
Bishop of Manchester.
Q1355 Baroness Scott of Needham Market:
You have already made a couple of references to this but I wanted
to turn to the question of regional news and national news. Ofcom
appears to have accepted that, under the current economic circumstances,
the current level of provision is unlikely to stay, and we have
had Michael Grade's announcements on the reduction in the newsrooms.
I wonder, first of all, how you feel about that announcement in
the short term, but, also, looking forward into the future, would
the same interventions that you propose for national news be relevant
for the protection of regional news, the tax breaks and so on?
Ms Hay: Yes. We are very dismayed and very concerned
about the reduction in regional news. We have a member up in Cumbria,
for instance, who has pointed out how difficult it is going to
be in Border now if that regional news is cut back and how different
it will be.
Professor Gaber: I agree, and we do think the
carrots should work for regional news as well, although not for
regional programming. I want to make a broader point which is
very relevant which relates to the whole notion of democratic
culture. One of the great successes of ITV has not been regionalism
per se but the fact that it has created regional identities
which did not exist before. People do talk about "Granadaland";
people in Border have a sense of "Border" as a region.
That will go. In the opposite case, to take two examples, Luton
and Swindon both fall in ITV deserts and I think their sense of
regional identity has suffered. One of the things we are losing,
with the consolidation of ITV into regional news is that whole
notion. In the highly centralised country that England is—and
I specifically refer to England—that sense of regionalism
is going to be diluted, and that will be a great loss. We cannot
turn the clock back but it is worth noting that people in Border,
people in Carlisle, do not regard what is happening in Sunderland
as directly relevant to them but what is happening in Workington
is, and we are going to lose that.
Q1356 Lord Maxton:
The people in Hawick never considered Border television. They
relate to Scotland, not to Border.
Professor Gaber: Maybe Border is a bad example.
Ms Hay: I have someone from Cumbria here who
is very concerned that their news in future might come from Newcastle,
Glasgow or wherever. When you are talking about regional news,
you want to take it in conjunction with the cutbacks in television
and the cutbacks in independent radio as well. This is one of
the areas about which we are concerned, that has been well served
in the past but is eroding at the moment. There is a danger that
it might erode still further after switchover. Whilst you were
in America, I do not know if you happened to see the report on
the structural imbalance of political talk radio that was produced
by the Centre for American Progress. I do commend it to you. It
is available, and I can give you the contracts. It traces the
concentration of radio ownership in America and the impact that
has had on localness of output and on the programming, and the
bias in the programming that has come from that concentration
in media ownership. It would seem that some of those trends are
already occurring here and Ofcom has had its consultation on localness
of radio and its news here.
Chairman: I would like to ask the Bishop
of Manchester to ask the last questions.
Q1357 Bishop of Manchester:
There are two areas I would like to explore to end: one is about
the BBC cutbacks in journalism and the other is about the future
of Channel 4. I wonder what your view is about the severity, as
it would appear, of the cutbacks in the number of journalists
within the BBC and the effect that that will have, both on the
quality but also, given the fact that many other television companies
have working for them people who were trained and gained their
skills from within the BBC, what the knock-on effect will be there.
Perhaps the doorway into this particular question might be to
invite you to comment on the remark of Jonathan Ross about being
worth a thousand BBC journalists.
Professor Gaber: Only a thousand?
Ms Hay: I am not going to get into that.
Q1358 Bishop of Manchester:
Actually, if I may, it is not a wholly facetious remark because
it may possibly indicate something of a culture.
Ms Hay: Yes, it could. It is a difficult one
and I think it is a very foolish remark; a very foolish remark
indeed, a very conceited remark too. I am not going to comment
on that.
Chairman: I would love to hear your comments.
Q1359 Lord Corbett of Castle Vale:
Give us your thoughts.
Ms Hay: I think looks can say more. On the question
of BBC news cutbacks, I do not know the answer. In a large organisation
like the BBC I am sure there can be some economies. I personally
think that you also need to look at the range of BBC outputs that
are served. You cannot compare it immediately with ITN and Channel
4, because the BBC is serving international audiences, national
audiences which are very different from Radio 1 to Radio 4, local
audiences from Radio Aberdeen to Radio Plymouth to Radio Sheffield,
there are a huge range of outlets and different audiences who
want news presented in different ways, and some of that news will
be different. Some of those bulletins can be produced by the same
teams, some will require specialist people, but we did also have
a suggestion—I think you put it forward, Ivor—for
monitoring.
Professor Gaber: Yes, let me just add, wearing
my hat as a former BBC broadcaster, one of the things that is
under-estimated is the extent of competition, which is healthy
competition within the BBC, not needless competition. One of the
great spurs when you are working on a programme—for example,
Radio 4's World Tonight—is to try and get a better,
a different interview, a better package than Newsnight.
To that extent, people under-estimate the benefits of that duplication;
however, that is not to say there is not some duplication, and
one of our suggestions is that perhaps the BBC Trust and Ofcom
could co-operate on measuring BBC journalist output in terms of
minutes of output per journalist against the equivalent number
in ITV. I suspect they might find that there was not a huge difference.
Certainly it often appears odd if five crews come along to interview
you from the BBC and one from ITV, and there is certainly some
scope for economies there, but nonetheless in terms of the actual
output I suspect one would not find a huge difference. That is
one suggestion we would make for the Committee to consider recommending,
but it would have to be a joint operation. We are concerned about
the level of cuts, but that is not to say that we would simply
take a position and say there is no scope for economies.
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