Select Committee on Communications Minutes of Evidence

Examination of Witnesses (Questions 1960 - 1979)


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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