Examination of Witnesses (Questions 2094
- 2099)
WEDNESDAY 27 FEBRUARY 2008
Lord Puttnam
Q2094 Chairman:
Thank you very much for the paper that you sent, which is extremely
helpful. Could I start at the beginning with your experience not
least in chairing the Joint Committee that looked at the Communications
Bill? Why should there be special conditions governing the media?
Why should we not just leave it to the market?
Lord Puttnam: Because, unlike the rest of the
market, most people's decisions as citizens and consumers are
made on the basis of the information available to them. The nature,
the plurality and the accuracy of that information are what drives
people's lives forward. If the information is false or misleading,
they will make false decisions. If the information is accurate
and sufficiently broad, they are likely to make better decisions.
The market for information is not a market place in the sense
of markets for commercial products.
Q2095 Chairman:
In a democratic state all those factors are of great importance.
Lord Puttnam: They are fundamental. One of the
wonderful, almost surreal moments during the passage of the 2002
Communications Act was when we drafted a report containing the
word "citizens" on more than one occasion. It was knocked
back by officials on the grounds that the word "citizens"
could not be incorporated in English law. It was not until the
Secretary of State bravely said to her officials that she was
not prepared to stand at the despatch box in the House of Commons
and make the point that we were not citizens that the lawyers
scuttled back and found a way of getting the word "citizens"
into the legislation. It is the only place where the word "citizens"
is in legislation. That is a very broad criticism of our legislation
generally, not just of a specific piece of legislation.
Q2096 Chairman:
You were Chairman of the Joint Committee that scrutinised the
Draft Communications Bill. That Bill deregulated much of the media
in any event. Remind us what your main objections were from the
Joint Committee.
Lord Puttnam: My experience in the motion picture
industry was the amount of damage done over 30 years by a process
of consolidation built on purely economic grounds. I have come
to the conclusion that almost always when this occurred it would
be the consumer, the audience, who ended up with a raw deal. I
was at a conference the other day and it started with an organisation
called FIDO, the Film Industry Defence Organisation, a brilliant
idea dreamed up in the late 50s by British film companies, which
created a pool of money whereby they were going to buy the television
rights of all American and British movies off the market place,
prevent them from going on television and by doing that crush
television. This was the way of trying to ensure that television
never took off. The scheme lasted six months but it was interesting
because it was a precursor of dozens of attempts to stun at birth
new technologies and new means by which consumers could have access
to movies. If there is an over-arching theme that I have tried
to fight against, it is the presumption in favour of the economic
over the legitimate expectations of the audience. At almost every
turn audiences have been manipulated in favour of the economic
considerations.
Q2097 Chairman:
Is it fair to say that you agreed to or went along with a compromised
solution which led to the government introducing amendments which
established the Public Interest Test for media mergers?
Lord Puttnam: Yes. The architect of it was my
colleague on the Committee, Andrew Lansley, who lit on the fact
that, at exact the same time as our Bill was going through, the
Enterprise Bill was also going through. He conceived this notion
of a double lock whereby you use the provisions of the Enterprise
Bill to look at things from a competition perspective and at the
same time you looked at those same provisions from the perspective
of the public interest. By creating these two locks, you were
likely to get a reasonable result.
Q2098 Chairman:
Tell us what the Public Interest Test in mergers means in practice?
Lord Puttnam: Broadly speaking, the public interest
would be affected in the event of diminution of plurality of voice.
It was taken as being the written, audio or televisual voice.
If you were diminishing the plurality of voice, you were damaging
the public interest.
Q2099 Chairman:
Has that test done the job that you hoped for?
Lord Puttnam: Yes. I think in some senses very
much so. We now at least have the way that Britain works on the
basis of precedent. We now have sufficient precedent to move forward
reasonably confidently. I am still slightly bothered that Sky
may end up with 7.5% of ITV. Again, it comes down to this business
that the economics are seen to be defended at all times, whereas
the market would be clearer and everyone could get on with their
business if the position was that Sky had to get rid of an entire
investment.
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