Media Plurality - Communications Committee Contents


Chapter 6: Summary of recommendations

259.  We recommend that a plurality policy should be limited to the activities of media enterprises engaged in news and current affairs content. Content diversity in other genres is not unimportant but is a matter of independent commissioning or the stipulations set out in licence and Charter renewal agreement which create the context in which commissioning decisions are made. (Para 27)

260.  There appears to be a strong consensus that UK media markets should be the focus of UK media plurality policy; we agree. We recognise that plurality policy remains broadly a matter for the UK and this report relates to a UK plurality policy. (Para 34)

261.  Any plurality policy approach may take into account media enterprises based in the UK as well as those outside UK jurisdiction to the extent that they are consumed by UK audiences if this is considered relevant to the overall assessment. (Para 35)

262.  The scope of any plurality policy should encompass both local and regional media as well as national media in the devolved nations and UK-wide media enterprises. In dealing with local or regional media, those tasked with making decisions should in reaching their conclusions pay particular attention to the question of financial sustainability. (Para 40)

263.  The BBC should be included in any assessment of media plurality but it should not be subject to any control measures imposed from outwith its own regulatory framework as a result of that assessment. It is for the body which oversees the BBC, under the existing governance rules this is the BBC Trust, to ensure that the BBC's conduct in relation to plurality is addressed satisfactorily. (Para 45)

264.  We recommend that media plurality policy should not be limited by the media channel through which content is primarily delivered: print, broadcast and content delivered over the internet may all be relevant, as could be the influence of digital intermediaries on the consumption of this content. It should, therefore, be open to an assessment of plurality to determine which media channels should be in scope based on whether they are relevant to the overall assessment of plurality at the time. (Para 51)

265.  We recognise the importance of ensuring that no content provider has an unreasonably high level of consumption and recommend that a media plurality policy should take into account both the supply and consumption of content, albeit that any interventions available will have to be limited in application to the supply side. (Para 56)

266.  We recommend that a media plurality policy should be flexible enough to take into account both the wholesale and retail provision of news and current affairs content. It should establish an approach to determining how to attribute content to media enterprises operating at different points in the value chain. This determination will require the location of editorial control in the value chain to be identified in each case. (Para 63)

267.  The framework of plurality assessment and intervention must strike a balance between providing certainty to the market and flexibility to the regulator—both are important. (Para 68)

268.  The assessment of plurality should drive the decision about which remedy or intervention is appropriate, not the other way around. (Para 69)

269.  On the BBC, we think that the proper place to consider its responsibilities, including with regard to matters such as internal or external plurality, is within the Charter Review framework. (Para 90)

270.  We encourage the Government and the BBC in negotiating Charter Renewal to consider whether the BBC might be given a more explicit responsibility—with respect to its online offer for news and current affairs content—to stimulate consumption of diverse viewpoints from different external sources. (Para 92)

271.  We recommend that the Charter Review process makes clear what licence fee funding is for, and that, as long as it is conceivably available for projects external to the BBC, it is also made clear what strategic role, if any, this funding might play in positively promoting external plurality in the wider UK media. (Para 94)

272.  For our part, we urge the Government to support our view that the licence fee should be for the BBC alone, though we do not argue that funding to S4C should now be removed. (Para 95)

273.  The centre-piece of our approach is that the Government should introduce a statutory periodic review of the plurality of the media markets to be undertaken by Ofcom on a 4-5 yearly basis, which will reshape the role for Government, Parliament, regulator and competition authorities in protecting the public interest. (Para 196)

274.  Ofcom's periodic assessment of plurality should be based on a limited number of different measures which address availability, consumption and impact. (Para 199)

275.  There should be a role for Parliament in setting guidance for this new framework of assessment, but the metrics themselves to be used in assessing plurality should not be set down in statute. Instead, there should be flexibility for Ofcom to interpret statutory guidance, design the assessment framework and select appropriate metrics according to the circumstances at the time of the review, but with an emphasis, wherever possible, on longitudinal consistency of the measures applied. (Para 200)

276.  The work which the Government intend to commission relating to the development of a clear measurement framework should not seek to find a 'right way' of measuring media plurality which can then be set in stone. Instead its output should provide Ofcom with a starting point and input to the decisions it will have to make, at the time of the first periodic review, about how to design the assessment framework and select appropriate metrics in a way most likely to balance the twin objectives of delivering certainty to the market and sufficient flexibility for a proper assessment of plurality at the time. (Para 203)

277.  Ofcom should select the metrics to be used in a plurality assessment which are most likely to assist it, given the state of the market at the time of each periodic review, in reaching defendable conclusions about the following:

·  the sufficiency of diversity of viewpoints available and consumed across and within media enterprises; and

·  the extent to which any one media owner or voice may have too much influence over public opinion and the political agenda. (Para 204)

278.  The periodic plurality review report should contain both a narrative assessment of the sufficiency of plurality in specific media markets and across media; and a clear indication of where plurality may be under threat, which will guide the decisions over intervention in the event of any transaction. (Para 205)

279.  In producing the narrative description of the degree of sufficiency of plurality, Ofcom should be able to rely on new guidance relating to the definition of sufficient plurality to be set down in statute. This guidance should be qualitative and descriptive rather than quantitative and tightly prescriptive. (Para 206)

280.  The content of this guidance should be clearly stated in statute and might include certain key elements such as a diverse range of independent news voices; high overall reach and consumption with consumers actively multi-sourcing; sufficiently low barriers to entry and competition to spur innovation; economic sustainability and no single organisation accounting for too large a share of the market. (Para 207)

281.  The Government could, as part of the next phase in their work programme on media plurality, also begin to develop statutory guidance relating to the meaning of sufficiency of plurality upon which Ofcom can rely in making an assessment of plurality at the time of a periodic review. (Para 208)

282.  Only in the most extreme circumstances should interventions in the interests of plurality be imposed outwith the context of a transaction. (Para 209)

283.  Where immediate and pressing concerns resulting from organic change are discovered in a periodic review, it should be possible for Ofcom to order a media enterprise to divest. The bar for this imposition should be high and hinge on a demonstration of the following:

·  That there is a real problem now;

·  That the specific proposed divestment measure is the only way to remedy the problem;

·  That the specific proposed divestment measure will be effective in remedying the problem. (Para 211)

284.  Before making the recommendation that a media enterprise should be ordered to divest, Ofcom must ask those players affected to submit representations, in which they can put forward their own divestment measures in lieu of Ofcom's initial recommendation. Ofcom can then make a final recommendation if, in light of these representations, Ofcom believes there is a divestment measure, either of its own or of the media enterprise's design, able to pass the tests above. (Para 212)

285.  The report to result from the periodic review should be written so as to limit the need for transactional plurality reviews, by sending very clear signals and guidance to all concerned about the prospects of consolidation in future possible transactions before they are formally proposed. (Para 215)

286.  Ofcom should publish in its periodic plurality report any plurality concerns associated with digital intermediaries. Indeed this might be the vehicle through which Ofcom could on a regular basis express the UK public's expectations of major digital intermediaries, as recommended in our previous Report on Media Convergence. (Para 217)

287.  Finally, once complete, Ofcom's report on the periodic plurality review must be submitted to the Secretary of State. (Para 218)

288.  The process for agreeing a final report should proceed as follows: The Secretary of State should have an obligation to accept the content and recommendations of the periodic review report or publish good reasons for not doing so. Ofcom should be permitted to submit an amended report in the light of the reasons given by the Secretary of State but should not be able to submit a third report. If agreement cannot be reached, the Secretary of State should have the final say, and accordingly, if this arises, the Government rather than the regulator should revise and publish the final version of the periodic plurality report. (Para 219)

289.  The Government should revise the present system of transactional reviews, in order to clarify the relationship between competition and plurality policy when dealing with specific transactions. (Para 225)

290.  To that end, plurality assessments and competition assessments of transactions should be conducted as two distinct processes, by regulators with the appropriate set of priorities, expertise, methods and ultimately ethos for each. Competition authorities should remain responsible for the assessment of a transaction's impact on competition, but Ofcom should be given a new statutory responsibility for the assessment of a transaction's impact on plurality. (Para 226)

291.  The plurality assessment of a transaction should proceed on the basis of a judgement by Ofcom. Right at the outset, Ofcom will have to form a reasonable belief prima facie that a specific transaction may be expected to result in a material and unacceptable lessening of plurality, and that it therefore merits closer assessment. (Para 230)

292.  In reaching a decision about whether there may be a material and unacceptable lessening of plurality as a result of a transaction and therefore whether to proceed with a plurality assessment, Ofcom should draw on the most recent periodic plurality report, and consider the relevance of any readily observable changes to plurality in the UK since. (Para 231)

293.  In conducting a plurality assessment of a specific transaction, Ofcom should reach a decision about whether or not the transaction should go ahead based on an assessment of the likelihood of its leading to a material and unacceptable lessening of plurality as compared to a scenario in which the transaction does not go ahead, taking into account in both scenarios:

·  the sufficiency of diversity of viewpoints available and consumed across and within media enterprises; and

·  the extent to which any one media owner or voice may have too much influence over public opinion and the political agenda. (Para 233)

294.  The final step in the transactional review should be the submission of the competition assessment and the plurality assessment to the Ofcom Board who should be responsible for reconciling the recommendations of the two reports and implementing them as a single Public Interest Decision. (Para 234)

295.  Where the two reports reach the same conclusion, the Ofcom Board must be responsible for ensuring the implementation of the regulators' mutual view either to block or allow the transaction, but there must be a clear mechanism in place for resolving potential conflicts between plurality and competition assessments of transactions. (Para 236)

296.  Further, this mechanism should be designed to resolve such conflicts on the very clear principle that, where plurality is concerned, the citizen interest should have greater weight than at present in relation to the consumer interest, and a democratic and informed society should have greater importance than at present when weighed against the cost of advertising. (Para 237)

297.  Responsibility for resolving such conflicts and as such for making a final Public Interest Decision should therefore be given to the Ofcom Board, rather than the competition authorities, as at present. (Para 238)

298.  The Ofcom Board, mindful of its twin statutory duties to further the citizen and consumer interest should publish this Public Interest Decision, having weighed up the merits of each case and determined whether overall it is in the public interest for the transaction to proceed. (Para 239)

299.  As a whole, plurality policy should be revised to strike a new balance between the regulator and Government in terms of decisions to be made about intervention: there should be accountability for politicians where appropriate but the onus should be on Ofcom to balance the consumer and citizen interests. (Para 246)

300.  Ofcom's Local Media Assessment (LMA) should be given greater weight than at present in the competition authorities' decision about whether to refer a specific local media transaction onto a full Phase 2 investigation. The competition authorities should make this change clear in their guidance on mergers, before the new competition authority, the Competition and Markets Authority, comes into existence, at present anticipated in April 2014. (Para 250)

301.  We note that this recommendation bears a striking resemblance to one we made in a previous Report, The Future of Investigative Journalism, paragraph 161. We urge the competition authorities, in cooperation with Ofcom, to make greater progress towards implementing this recommendation following the present Report. Should the competition authorities fail to act on this recommendation, we urge the Secretary of State to consider the introduction of a measure by which the relevant section of the competition authorities' merger assessment guidance would have to be approved by the Secretary of State. (Para 251)

302.  One of the outcomes of Ofcom's periodic plurality review might be a consideration of whether there is a case for the more in-depth assessment of media-specific considerations provided by the LMA procedure to apply more widely to players in other fragile or emerging media markets. (Para 253)

303.  We do not recommend the removal of the "20/20" rule, but equally would not argue for its retention. Were the Government to implement a revised plurality policy which lives up to the principles contained in this Report, there may be a case for its removal. However, absent such a policy, it remains a potentially important safeguard which should be kept in place. (Para 256)

304.  The relationship should be clarified between the public interest and plurality as we have defined it in our Report and other related but separate policies and interventions such as licensing, PSB reviews, fit and proper person tests and so on. (Para 258)


 
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