Examination of Witnesses (Questions 1960
- 1979)
WEDNESDAY 6 FEBRUARY 2008
Professor Tony Prosser, Professor Tom Gibbons and
Professor Lorna Woods
Q1960 Chairman:
Some witnesses have told us that there is a need for an objective
public interest principle to underlie regulatory intervention.
Could you design such a thing?
Professor Gibbons: I am not sure whether that
will not come. I think some attempts have been made to try to
quantify what the public interest in plurality is. There were
some attempts in America not so long ago to try to create an index
of pluralism. Really it identifies again a number of surrogates
and an inference is made from numbers of owners or numbers of
adverts and so on. It is very difficult to identify quite what
is an adequate degree of pluralism. In all the debates about media
ownership in the last 10 to 20 years, it has been very difficult
to pin it down. It comes down to something like having two, three
or four players in the market, which is a rather vague sort of
idea in some ways. It is difficult to find an objective justification
for that. I think that pluralism is very much about a political
sense of what is a healthy democratic society and what diversity
of viewpoint is available in that society. It is a matter of judgment.
It cannot be put into a test very clearly. All that one can do,
I think, is try to make the tests based on sufficiency a little
bit more articulated, maybe identify the fact that we are dealing
with content essentially, point to sources, point to outlets as
well, and then construct a test around the idea that there should
not be a reduction in the coverage of viewpoints that reflect
the views of the particular market, whether it is broadcasting
or the press market.
Q1961 Lord King of Bridgwater:
Do you think there is a tendency for plurality still to focus
on what I call the old media and not take sufficient account of
all the other areas? I think one of the interesting things that
this Committee has been impressed with is the realisation of how
many people obviously have a particular view of news provision;
they get their news in quite different ways from anybody who was
looking for plurality ten years ago and completely different arrangements
exist in so many areas. Do you think it does take account of the
new arrangements, the new possibilities?
Professor Gibbons: The test in itself does.
It is open to the authorities to take those into account. I do
not think there would be any need to mention those specifically,
as long as the authorities were aware of different forms of news
availability. It is still the case that internet news is a small
part of total news availability and really serves to complement
standard news organisations' offerings. Indeed, much of it is
offered by standard news organisations. I think that one would
expect the authorities, in applying this test, to take that into
account, and indeed I think the Competition Commission did do
that in the recent Sky case, but it came to the conclusion that
was not weighty.
Q1962 Lord Maxton:
Increasingly, broadcasters and newspapers are using the internet.
Although the actual news content on the internet as such on Yahoo
or Google may be quite small, it is a platform that increases
things, is it not? In a sense, the biggest media merger that appears
to be about to take place, which is between Microsoft and Yahoo,
Microsoft buying Yahoo, we cannot control in any way whatsoever.
Now you have got essentially a system provider and the access
platform coming together in a way, and neither of them so far
have attempted to interfere politically at all, that perhaps has
the potential there for enormous power, does it not?
Professor Gibbons: That makes it all the more
important to ensure that there are complementary sources of news
reflected in public service broadcasting, either broadcasting
or through the internet, and also efforts to preserve the existing
domestic structure because I think the existing domestic structure,
whether it involves accessing the internet or taking broadcasting
of various kinds, will be very significant. That is the way that
people on the ground experience news, experience plurality, and
that is where the internet should be. I can see maybe a long way
down the line, if all broadcasting were to disappear and we were
all capturing our news as we wanted from the internet, then there
might be a diminution in the amount of news that many of us will
receive, but I cannot really see that happening in the foreseeable
future.
Lord Maxton: You and I disagree on that.
I think that will happen relatively quickly in the sense that
not necessarily news but broadcasting as we know it will cease
to exist; it will be narrow-casting and I think it will essentially
be down the platform of the internet; report broadcasting will
come, controlled by the remote control through the television,
yes, but it is controlling either a computer built into the television
that is built into a computer in another room.
Q1963 Chairman:
Let us get out of futurology. We can keep it in mind. The important
lesson you were drawing, as I understand it, from what Lord Maxton
was saying was that in fact it rather underlines the importance
of public service broadcasting at a national level?
Professor Gibbons: I think very much so.
Q1964 Chairman:
I notice, Professor Prosser, that you agree with that? You are
nodding your head.
Professor Prosser: I was nodding my head very
strongly at that. It seems to me that people have very different
expectations of information over the internet and information
from traditional broadcasting. That seems to me to be a very good
thing. We have the internet, subject primarily to competition-based
controls, such as they are, providing freedom of expression rather
well, so to speak. Anything can be on the internet. As I tell
my students, you should not believe it without checking there
is some form of quality control. We have public service broadcasting,
which is subject to editorial standards, some forms of quality
control that may be breached on occasions but nevertheless which
goes some way to preserve some sort of trust in the public sphere
that we can expect that the information has been subject to some
form of checking and that there is some form of impartiality and
treatment of opposing views required. It seems to me to be totally
desirable to have two very different spheres for different purposes.
Q1965 Chairman:
But they are very different?
Professor Prosser: They are very different indeed.
Professor Woods: I just want to ask the question:
where is all the content on the internet coming from? It is all
very well talking about the distribution platforms but who is
providing the content? At the moment, it seems to me, that it
is heavily reliant on existing media content providers. News gathering
itself is a very expensive enterprise if you are talking about
overseas correspondents and all that, rather than happy little
stories about pigs escaping from Tamworth, or whatever. There
is still a link there and the internet to some extent is dependent;
in fact some of the news organisations have brought intellect
property claims about Google and some search engines taking headlines
and photographs.
Chairman: And there are battles being
waged at the moment on this very point.
Q1966 Baroness McIntosh of Hudnall:
I wanted to come back to the public interest question but it may
be that it is better wrapped into later points. I will state it.
Professor Gibbons I think made the point that there is a political
element in the ultimate in deciding how the public interest is
constructed. There is a disposition I think generally at the moment
to think that everything would be better if politics were not
involved in politics, or particularly of politicians were not
involved in politics. In reality, it felt to me as though what
you were saying was that the construction of a public interest
test, as it were, is fundamentally about values and therefore
about what is set within a political context as being the prevailing
values at the time. Those will change because democracy delivers
different sets of values when it delivers different governments.
Do you think in that context, firstly, that you would stick by
one or other view that it would be better to get the Secretary
of State out of this process and, secondly, if you agree that
that is the case, can we ask you again: is it possible to develop
a way of talking about the public interest, let us say, which
preserves a sufficiency of objectivity for people to understand
what is being attempted but actually acknowledges the fact that
in the end somebody has to make a judgment?
Professor Gibbons: Very broadly, it is a matter
of process. The basic ground rules here ultimately are political
and the politicians have to set those rules. I do not think you
can quantify then what is appropriate to generate plurality; it
is a matter of trying to work out in a very fuzzy kind of way
what range of opinion you think is desirable to be voiced and
the viewpoints. You do not want to give a voice to every viewpoint
and treat it equally because that would give disproportionate
weight to perhaps rather extreme viewpoints, but maybe extreme
viewpoints ought to be heard from time to time. The media might
sometimes have a role in having special study weekends, like Channel
4 used to have some years ago, of the particular ideologies. That
would be fine. How one constructs the balance is for the politicians
and it is for them to come to a judgment about whether five players
or six players or two players is sufficient. Having come to that
judgment, I then think that when the rules are applied, the politicians
should stand back because, having applied the rules—and
of course that creates a burden on making the rules reasonably
intelligible, understandable and predictable because the industry
obviously like predictability—I think the expert regulator
taking evidence about these matters, in so far as it can, should
be taking the primary role. I would hope that I can be consistent
in that.
Q1967 Baroness Scott of Needham Market:
To follow that, the creation of the rules means within a legislative
framework. Is it ever possible to have a set of rules which moves
as fast as the sector does, or would it not always be the case
that you were applying rules that were out of date or not consistent
with the economic environment or the business environment?
Professor Gibbons: In some ways I think it is
not so much of rule; it is rather perhaps of principle or of a
standard, and so identifying a set of relevant criteria and then
applying those in a different context. If you were to say: we
do need media to reflect the whole range of issues, viewpoints
and positions in a particular market, how that is done will be
dependent on how the market changes and what new kinds of media
there are. You can still apply the standard in a general way in
that sense.
Q1968 Baroness Howe of Idlicote:
Going back to the public interest test again, my memory of the
background is that there was quite a lot of debate and the actual
way that it was framed in the end was a bit of a compromise anyhow.
Applying this to the regulators, really do you think that both
Ofcom and the Competition Commission are indeed the right sort
of organisations, regulators, to make this sort of judgment, not
least given that Ofcom, though more broadly based as I think one
of you said, nevertheless is mainly economic and technical geared
and the content side would not get much of a look in?
Professor Prosser: The Competition Commission
I think, as I mentioned earlier, is very much an economic-based
regulator. That is its speciality. That has been the big change
in competition law over the last ten years, that we have moved
away from a general public interest test to a competition-based
test in competition law generally with these very limited opportunities
for the Secretary of State to raise public interest issues. The
Competition Commission, it seems to me, is not the best body to
decide on issues of plurality, given that plurality is not essentially
an economic issue; it involves some economic elements but it is
primarily an issue involving citizenship, for instance social
principles, one might say. This is why I saw a role for the Minister
at the end of the process. Ofcom is in a rather different position,
given that it has dual responsibilities relating to consumer protection
and protecting us as citizens. It seems to me that Ofcom would
be a better qualified body to examine the plurality issues. It
has a good record in terms of openness, in terms of making clear
what it is doing, and so on. The difficulty with Ofcom is a familiar
one of how it balances its two remits because they can very easily
come into conflict between the rights of the consumers and the
interests of citizens.
Q1969 Baroness Howe of Idlicote:
As you will know, and indeed you might like to comment on this,
they got into a bit of a muddle right at the beginning by trying
to blend citizens and consumers together. Is not this always going
to be quite a problem for them in sorting out these sorts of tests?
Professor Prosser: I think it is always going
to be a problem where you have a combined regulator of that kind
because a lot of their work will clearly be economics based; for
example the telecoms side. What is important, though, I think,
is to realise that in each of the issues that it deals with there
will be two ways of viewing things: the interests of consumers
and the interests of citizens. In the end, they are not the same
thing. This is something which has come out strongly in the Review
of Public Service Broadcasting, for example. There is a conflict
there. How we deal with it, I am not sure.
Q1970 Baroness Howe of Idlicote:
I wondered what the other two of you thought about this. Ofcom
have had a very important role and have done a lot of extremely
good things, in my view anyhow, but we may be moving to a time
when they should give rather greater prominence to the contents
side of their work. They could do, I would have thought, even
within that framework.
Professor Gibbons: I very much agree with that.
The Content Board seems to have been lost in some ways. As far
as I can tell, it has a clear role in the adjudication of content
issues, but its contribution to the broader debate about policies
within Ofcom do not seem to be very obvious. I take it there are
some influences. If you look at the Public Service Broadcasting
Review generally, Ofcom seems very ill at ease in talking about
citizenship issues; it does not have any debate within itself
based upon non-economic considerations. I am sure there are people
in the organisation who would want to express those views but
they are not very obvious. I think I would have to agree with
Professor Prosser: if those kinds of issues are not very prominent
in Ofcom, it does raise questions about whether Ofcom is perhaps
at the moment the best organisation to deal with these plurality
questions ultimately. However, if the content remit were to be
strengthened within Ofcom and it were to develop this debate within
itself, I would feel fairly confident.
Q1971 Chairman:
Where would that leave the Competition Commission?
Professor Gibbons: Again, on the issues of plurality,
I am not so sure the Competition Commission are all that ideally
competent. Having said that, I was very impressed with the way
that they handled the plurality issues in the recent investigation.
There was a sense, I thought, that they were gathering information
about plurality without quite feeling it. It was interesting at
one stage that they made the point about plurality being a matter
of democratic interest, as if that were something odd. I thought
that was quite telling really. Having said that, they gathered
evidence from various experts and from people in the industry
and so on and they tried to make a determination about plurality
which I thought was probably defensible, with one qualification
that we might discuss later. They could do it but I would much
rather see Ofcom deal with this.
Q1972 Chairman:
I suppose the question I am asking is this. If I was trying to
take over a company, having both these big bodies tramping over
the ground, can it not be rationalised so you get it into one?
Professor Gibbons: The problem is that sometimes
the pluralism issues conflict with the competition issues.
Q1973 Chairman:
And you think you need both?
Professor Gibbons: I think somebody has to create
a trump card, as it were, and it has to be within the basic legislative
framework. The politicians have to say: this is the dominant consideration.
Q1974 Baroness Howe of Idlicote:
Going back for a minute to Ofcom, and perhaps we could hear from
Professor Woods too, one of the interesting things to me is that
the Consumer Panel, because it was rather more independent, seemed
to be coming out in its report with one or two of the citizenship
aspects of giving advice. I wondered again whether rather more
pressure needs to be put on Ofcom to look at this whole area again.
Professor Woods: I think there is a problem
with the Act in the sense that you have the two duties specified
one after the other in section 3, or whatever, but then that is
more or less it for citizenship. I know there is a couple of references
but the way in which the consumer is to be protected is rather
better delineated throughout the Act. Then you also have other
definitions like "members of the public". How is a member
of the public different from a citizen? I think Ofcom is not helped
in that regard. Certainly it is left to its own devices in making
a choice about which version, the consumer or the citizen, to
prioritise in the event of conflict. I am rather uneasy about
that. The Consumer Panel is limited in what it can comment on
under the Act but I could be wrong. My sense is that it is limited
by the terms of the statute.
Q1975 Baroness Howe of Idlicote:
But it publishes its report?
Professor Woods: Yes.
Q1976 Lord Maxton:
Has not the Content Board however recently done work on advertising
on television in relation to food, fast foods and children and
so on between the 9 o'clock watershed and so on? They have produced
some reports on that, so they have not done nothing. I do not
necessarily agree with what they said but leave that aside; they
have done something. Turning to BSkyB, that comes into competition
obviously. The argument is that BSkyB deliberately bought those
shares in order to stop Virgin basically from merging with ITV
or taking over ITV, I do not know which. Virgin is, even now,
still not happy although they think that it is better than nothing.
They are still not that happy with this need for a small percentage.
Do you agree? Do you think they should have been told to get rid
of all of it?
Professor Prosser: I think there were two issues
here. If we are looking purely at the competition-based test,
which is the one on which the decision was made, it seems to me
that the reduction below 7.5% deals with those issues. What I
found a bit less convincing in the Competition Commission's report
was on the issue of plurality. If I remember rightly, the three
points that it used in deciding that there was not likely to be
a problem of plurality, for example in news provision, were: firstly,
that the editorial culture was strong enough in ITV to prevent
a shareholder putting pressure on; secondly, that ITN had in independent
board and would not be influenced and there is a 40% shareholding
by ITV in it; and, thirdly, that news is covered anyway by demanding
standards concerned with impartiality, et cetera. My worry
about the first two is that there is no obvious means of monitoring
what happens after the decision, and that I think is where we
have a potential problem. In one sense, it is speculation. On
the final one, it seems to me to be a confusion because, as I
think Ofcom evidence to this Committee pointed out, the rules
on impartiality and so on are concerned with individual programmes
primarily. The issue on plurality is a different one; it is the
ability to set agendas by dominant shareholders, for example.
I think that was a point that was missed.
Q1977 Lord Maxton:
But Virgin would have become the dominant shareholder, so in fact
it could have become almost the sole shareholder in the case of
a merger. In terms of some aspects of that, although it is a Virgin
name and everybody thinks it is Richard Branson, Richard Branson
has a tiny share. As far as we are aware, and you may know better
than us, Virgin is not a British company; it is not British owned,
is it?
Professor Prosser: I do not know the answer
to that. I suspect that you are correct on it.
Q1978 Lord Maxton:
In fact BSkyB could be seen as more of a British company than
Virgin?
Professor Prosser: Yes. Does this not perhaps
show the point that was made earlier by Professor Gibbons about
the importance of a qualitative element to these questions, that
you cannot lay down rules and think that that is enough because
precisely the issues that you have raised here are the ones that
would be investigated, surely, by a competition authority or by
a body like Ofcom? What is the history of those involved in Virgin
in, for example, putting pressure on editors? What is the history
of Sky in relation to that? Those would be precisely the sorts
of issues that a competition body or another regulatory body should
investigate.
Lord King of Bridgwater: Could we clarify?
Who owns Virgin? Is not ntl one of the owners?
Lord Maxton: ntl has been bought over and changed
in ownership of shareholders.
Q1979 Lord King of Bridgwater:
Does anyone on the panel know what the ownership is of Virgin
Group?
Professor Prosser: I think ntl is American now.
Chairman: We can check this.
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