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I do not have a direct answer to the question that the noble Lord, Lord Fowler, asked me on the numbers, but I will write to him immediately after this debate to inform him of the facts. I hope that the noble Lord,

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Lord De Mauley, will feel that we have met the broad terms of his amendment and that he can safely withdraw it.

Lord De Mauley: My Lords, I am grateful to my noble friend Lord Fowler and to the noble Lord, Lord Clement-Jones, for their supportive words and I agree with what they say. In explaining my amendment, I acknowledged that the Government might have alternative means. Although I am not entirely sure that the Minister has given me 100 per cent satisfaction on that, I beg leave to withdraw the amendment.

Amendment 139 withdrawn.

Clause 35 : Local radio multiplex services: frequency and licensed area

Amendment 140

Moved by Lord Davies of Oldham

140: Clause 35, page 42, line 14, leave out "local"

Lord Davies of Oldham: My Lords, I will also speak to the other government amendments in this group, which are intended to address the concerns expressed by the noble Baroness, Lady Howe, in Committee about the extension of the licensed area of the national radio multiplex. The effect of the amendments is to allow Ofcom, at the request of the licence holder, to extend the area in which a national commercial radio multiplex is available. Notably, this would facilitate the extension of the coverage area of the existing national commercial multiplex into Northern Ireland. We recognise that the decision to extend into Northern Ireland may have an impact on the existing commercial multiplex provider, but we believe that any impact would in fact be minimal and more than outweighed by the benefit to listeners. At the same time, these government amendments will ensure that the provisions in the original drafting of Clause 35, which allow local multiplexes to vary their frequencies and reduce their licensed areas as well as to extend them, remain applicable only to local multiplexes. The Government have listened carefully to the concerns raised by the noble Baroness in our previous discussions on the Bill and we hope that our proposed amendments will address the issues that she raised. I beg to move.

Amendment 140 agreed.

Amendments 141 to 143

Moved by Lord Davies of Oldham

141: Clause 35, page 42, line 14, at end insert-

"( ) OFCOM may, if the requirements of subsections (2) to (4) are met, vary a national radio multiplex licence by extending the area in which the licensed service is required to be available."

142: Clause 35, page 42, line 15, leave out "this section" and insert "subsections (2) to (5)"

143: Clause 35, page 42, line 37, at beginning insert "In the case of a local radio multiplex licence,"

Amendments 141 to 143 agreed.



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Amendment 143A

Moved by Baroness Bonham-Carter of Yarnbury

143A: After Clause 37, insert the following new Clause-

"Regulation of television

In paragraph 19(2) of Schedule 24 to the Enterprise Act 2002, after paragraph (b) insert-

"(c) may, as concerns undertakings given by one or more holders of a licence to provide a Channel 3 service, be amended or revoked by statutory instrument which shall be subject to annulment in pursuance of a resolution of either House of Parliament"."

Baroness Bonham-Carter of Yarnbury: My Lords, I start by declaring an interest as an associate of an independent production company. The purpose of this rather technical amendment is to address an imbalance that exists in the treatment of certain merger undertakings. The issue arises because when responsibility for mergers, which was given to the Secretary of State under the old Fair Trading Act 1973, was transferred to the Competition Commission, this did not cover all cases and the Secretary of State retained the power to review some mergers. This amendment in fact concerns the continuing existence of the contract rights renewal, the price control mechanism that applies to ITV advertising sales.

When Carlton and Granada merged in 2002 and became ITV plc, it was one of only three commercial television channels available in most homes. There were concerns then that its share of the advertising market was too powerful, so CRR was introduced to protect advertisers. CRR allows companies that advertise with ITV to retain to this day commercial deals that they made in 2002. It was designed for an analogue age and is palpably ridiculous in our digital one. Digital TV, and with it the supply of airtime for adverts, has grown with incredible speed. While competition in the commercial TV market has exploded, the media-buying market has consolidated, with 80 per cent of media advertising today controlled by four agencies. Do these super-agencies and the multinational companies that they represent really need protecting from one television channel, ITV?

CRR is damaging the UK's creative industries. It deprives ITV of money at a time when investment in original UK television content has fallen by £340 million over five years. It has become unnecessary and should be brought to an end. As it stands, the CRR regulations are the responsibility of the Competition Commission. The best route to amending CRR is to bring its review under the responsibility of the Secretary of State. This amendment is designed to pave the way for that. It would give the Secretary of State the discretion, following secondary legislation, to bring CRR back within the scope of a regime that continues to apply to several other merger undertakings. I beg to move.

Lord Gordon of Strathblane: My Lords, I support the noble Baroness, Lady Bonham-Carter, and I hope that her lucky run from earlier in the Report stage will continue today. I moved an amendment in Committee suggesting that media mergers be moved from the Competition Commission to Ofcom as a knowledgeable specialist surveyor of the media marketplace. I withdrew

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my amendment at that stage and, within a week, the Competition Commission announced that, after three years of deliberation, it would not make any significant changes to CRR. Had my amendment been moved after that decision was announced, I would have been strongly pressed to push the matter to a vote and I suspect that I might have had considerable support throughout the House.

As the noble Baroness said, this amendment does not pronounce on CRR; it simply gives the Secretary of State power to review it. It is the minimum position that we should aim for. We are in something of a mess in terms of media mergers and, frankly, the Competition Commission has not been on top of the job. It seriously worries me that a good government Bill, which among other things does quite a lot to help the commercial sector in both television and radio, will find its best efforts vitiated by the Competition Commission refusing to move on matters such as CRR. All the improvements that the Government are bringing about through the Bill could well be vitiated if that situation is maintained. I support the amendment.

Lord Fowler: My Lords, I, too, support the amendment and the words of both fellow members of the Communications Committee, although the amendment is not necessarily one of the committee's proposals. The term "contract rights renewal" seems designed to put off the understanding of any right-minded person. It is, in fact, reasonably simple. It amounts to the conditions that were adopted to deal with any adverse market effects resulting from the merger of Granada and Carlton, which formed ITV. However, that was in a different age when ITV was a major player in this area. It still is, but it is not as major as it was then. The measure was introduced to protect advertisers when ITV was one of only three commercial television channels available in most homes in the country. Self-evidently, that position has changed dramatically. The advertising market has completely changed. The number of digital households has more than doubled to 90 per cent and there has been an explosion of new digital channels.

The only question is: do the advertisers require the kind of protection that was once given to them? Frankly, I do not think that they do. This is unnecessary regulation. I agree entirely with what the noble Lord, Lord Gordon, said-had we known the result of the competition inquiry, there would have been considerably more interest in this provision when it was first debated. This amendment gives us the opportunity to put that right. The condition placed on ITV-as everyone knows, it has been going through some pretty rough times-is entirely unnecessary in modern market conditions and it is about time that we recognised that. If the only way of recognising it is to take the power away from the Competition Commission and leave it to the Secretary of State's discretion, that seems to me a sensible way to go.

Lord Dubs: My Lords, I support the amendment and associate myself with the remarks made by the three noble Lords who have spoken to it. It may seem a technical amendment but it is very important. If we are not careful, we will have an environment where

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ITV will have a job to continue as a public service broadcaster. Although it has done a little better financially in the recent past, it is facing a very difficult situation with declining advertising revenues. That may be a long-term phenomenon, given how much the internet is taking away. It seems to me that this regulatory provision relates to a bygone age, albeit only seven or eight years ago. It would be sad and disastrous for British television if the main players ended up being the BBC and Sky. It would not be good for the BBC-an organisation for which I have enormous respect-or for the British public, and it would weaken television generally. Therefore, this amendment is important. If we constrain ITV from surviving with a decent level of return, its programming quality will go down and in the end we will not have a vital commercial sector, which is healthy for British television and broadcasting.

I do not know how much discussion the Competition Commission has had on CRR. I suspect that it probably did not have sufficient. I would very much like to give ITV a chance to compete properly-not tie its hands behind its back-return to decent profitability and contribute to the creativity of British television.

Lord Puttnam: My Lords, I support the amendment despite my position as deputy chairman of Channel 4, which in some respects marginally benefited from the CRR decision. As someone who has watched developments in this very specialised sector for a great number of years, it is clear to me that the Competition Commission struggles when it tries to deal with this very fast moving and complex area. I do not expect it to put its hand up and say that it cannot cope, but it would be helpful if the Government put their hand up for it.

Baroness Howe of Idlicote: My Lords, I add my support. Irrespective of whether the Competition Commission does not know enough about the industry or whether its mind works in a different direction, it clearly is not an appropriate body to decide this matter. It is important that we keep ITV with us as far as we possibly can. I support the amendment.

3.30 pm

Lord De Mauley: My Lords, we, likewise, support Amendment 143A. There is now widespread acknowledgement that the contract rights renewal regime has served its purpose. As the noble Baroness, Lady Bonham-Carter, said, internet search-engine advertising has grown dramatically and that, together with the multitude of digital channels now available, means that ITV is no longer the dominating player in advertising it once was, as my noble friend Lord Fowler said. It was interesting to note that the Secretary of State for Culture, Media and Sport told the other place recently that he was sympathetic to calls to scrap the system. He did not, however, think that there was a mechanism by which this could be done through this Bill. Amendment 143A seems to solve his particular problem in a rather neat way. The amendment gives to Parliament the power to scrap the regime. It does not, as the noble Lord, Lord Gordon, said, necessarily mean it will be

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scrapped. Parliament will want to listen to all sides of the debate in some detail. Given the cross-party political will for change, which this debate has demonstrated rather aptly, it is frustrating that politicians have been powerless to do anything about it. Amendment 143A would change that so I hope the Minister will listen carefully and can offer some support from the government Benches.

Lord Davies of Oldham: Certainly the Government are listening carefully. This amendment is supported in many parts of the House and I therefore approach the issue with great seriousness. We recognise the concerns which have been expressed about ITV in its present circumstances, and the noble Lord, Lord Fowler, is right that we are in different circumstances today from a number of years ago when ITV had a rather more flourishing prospect before it. The Secretary of State has already made his concerns in this area clear elsewhere. However, we do not agree that this new clause is the correct way to address these concerns.

The Secretary of State already has a power under the Interpretation Act to amend or repeal orders, such as the order specifying and transferring the CRR undertakings to the Competition Commission. So we do not need the amendment in substance since the Secretary of State already has that power. It was the intention of the Enterprise Act that the Office of Fair Trading and the Competition Commission act as independent competition authorities, free from government interference. Accordingly, once undertakings were transferred to the competition authority, the Secretary of State ceased to have any power over those undertakings. The final decision of the Competition Commission is not due until April 2010 and it may, of course, still revoke the CRR undertakings. ITV may also decide to challenge the Competition Commission's decision in the High Court on judicial review grounds if it is not happy with the situation.

The competition regime has been carefully crafted and any changes to it should be considered in depth. Here we are with this Bill at Report stage, dealing with an important dimension. I fully appreciate the concerns of all noble Lords. However, this amendment deals with only part of the problem and does not allow for the full analysis required in these circumstances. The Secretary of State has said that he has sympathy with ITV's position, but we need to be cautious of making amendments to legislation at this stage when we cannot foresee all the potential consequences.

I am not seeking to resist the amendment in principle, in terms of the issue it addresses and the importance of it. What I am contending is that this proposed new clause will not improve the situation or solve the problem and we should be extremely wary of putting one change into legislation at this stage when we do not have a total perspective before us. As I have indicated, developments relating to independent television are imminent and will take place within a matter of the next couple of months.

I hope the noble Baroness will accept that we have had an important debate on these issues. She is right to have raised them, and she was supported from many parts of the House with concern on the matter. I reiterate that what she expressed is also of concern to

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the Government. But the amendment is not the way to solve it and it would be injudicious for us to accept the amendment at this stage. I hope therefore that the noble Baroness will feel able to withdraw it.

Lord Fowler: On a matter of pure information, is the noble Lord saying that the Government already have powers that could be used to annul these regulations?

Lord Davies of Oldham: My Lords, I am saying two things. Certainly, other parts of the Bill refer to the difficulties which face independent television. It is the case that this amendment concentrates our mind on the issue, but several measures in the Bill are designed to address the issue of independent television. We are involved in complicated competition matters which are properly the responsibility of the Competition Commission, but I have indicated that the Government have power under the Interpretation Act to step in if, in fact, the situation was serious enough to merit action. Clearly, we hope that things do not reach that unfortunate pass and we appreciate the widespread concern in the House about the position of independent television. We all recognise that the issue needs to be safeguarded, although I cannot go as far as my noble friend Lord Dubs who, in slightly more maudlin comments, suggested that independent television might disappear altogether. It is very clear that we regard independent television as having both a future and an important role to play.

While the House will recognise that other parts of the Bill help to reinforce the position of independent television, this amendment would produce a partial and limited approach which superficially looks attractive because there is a genuine problem that needs to be addressed. However, the amendment might have all sorts of attendant difficulties for the relationship of the Secretary of State regarding competition matters, which are the responsibility of the Competition Commission. What I am assuring the House is that the Secretary of State certainly has the power in extremis to take necessary action.

Baroness Bonham-Carter of Yarnbury: I thank the Minister for his reply. He mentioned the word "cautious". He is being much too cautious. I stress that the amendment is designed only to make it possible for a Secretary of State to take responsibility for a review of CRR. It does not compel him or her. Nothing would need to happen after the Bill is passed unless a future Secretary of State wanted to do it and could get a further piece of secondary legislation through Parliament to make it happen.

The Minister mentioned that the Competition Commission still has not completed its deliberations. However, its latest decision, which noble Lords around the House have mentioned, is based on the same misconception set out in its previous decision last September. The commission considered that,

That is blatantly nonsense. It spent three years on its latest review and, judging by those pronouncements, nothing fundamental will change. Once the final statement is made, that will be it for the foreseeable future.



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I thank all noble Lords who have supported this amendment, in particular the noble Lord, Lord Puttnam. As vice-chair of Channel 4, he is in an interesting position in supporting this amendment. I urge the Minister to ponder my words, and I hope the Government might reconsider their position. For the moment-

Lord Davies of Oldham: Before the noble Baroness sits down, I sought to indicate in my reply that we took this issue very seriously indeed; we know it is serious and needs to be addressed. I also indicated that we have considerable difficulties because of certain imminent decisions. Given the range of opinions and strength of feeling across the House, I have indicated that the Government will of course look at this very seriously, and I give the noble Baroness that assurance.

Baroness Bonham-Carter of Yarnbury: I thank the Minister again and I beg leave to withdraw the amendment.

Amendment 143A withdrawn.

Clause 38 : Payment for licences

Amendment 144

Moved by Lord Clement-Jones

144: Clause 38, leave out Clause 38

Lord Clement-Jones: My Lords, in Committee we had a very useful debate on Clause 38 stand part which ranged widely across the whole issue of spectrum auction and allocation. My intention today with this amendment is not to range so broadly but to home in much more carefully on a particular aspect, namely the spectrum used by the programme-making and special events sector for radio microphones. Through its Save our Sound campaign, the sector has made it very clear that it has not been happy with the way in which the Government did not make their intentions clear regarding compensation for the loss of spectrum used by that sector and those radio microphones.

The Minister wrote me a very helpful letter on 24 February. He set out quite a number of the issues regarding the moving of the sector from the 800 megahertz band, and, specifically for PMSE users, from Channel 69. Subsequently, the sector has had meetings with Stephen Timms, the Minister for Digital Britain. I do not know whether the Minister in this House has had meetings, but clearly they have been very helpful. However, at the moment, and certainly in the Minister's letter, the principles of the compensation scheme are set out in very broad terms:

"Any package has to be consistent with the principles of leaving users no worse off than if the change had not taken place and also has to be consistent with State Aid principles and within Ofcom's statutory powers. As you can appreciate, this is a difficult judgement. The Government will give this matter careful consideration when we have the relevant information from Ofcom".

On these Benches, we look very carefully at ministerial letters, and we take comfort from them when they contain a certain level of detail. This letter is very general, and at the moment it does not give a great

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deal of comfort to the PMSE sector. I hope that today the Government will be able to give a much better idea of where advance notice applies and no compensation is payable; where no notice was able to be given and where compensation does apply; and, in particular, the kinds of compensations which will be available.


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