BECTU's response to the Culture, Media and Sport Committee's inquiry into audiovisual communications and the regulation of broadcasting

18 December 1997

Introduction

The concept of convergence

The gatekeepers

A distinctive regulatory structure for broadcasting

Public service broadcasting

Elements of a future regulatory structure

Conclusion

Introduction
1. The Culture, Media and Sport Committee's Enquiry into the future regulation of television and radio in the light of convergence is especially timely in the light of the European Commission's Green Paper on Convergence issued in December 1997, which is likely to lead to a Communication from the Commission by June 1998.

2. While BECTU has a general interest in all of the developments encompassed within the idea of convergence we wish for the purposes of this submission to concentrate on its implications for the regulation of broadcasting. For us and our members, this is an aspect which could, in the short to medium term, have direct implications for our sector in terms of the possible reform of regulatory structures. We will therefore focus on this aspect of the debate, although we initially wish to examine the notion of convergence itself.

   The concept of convergence

3. The convergence of the broadcasting, telecommunications and computer sectors through the application of common digital technology is causing widespread interest both at industry and governmental level throughout all the developed economies. New products and services are emerging which span two or even all three of the sectors concerned. Examples include:
   • home-banking, home shopping and voice telephony over the Internet

   • e-mail and World Wide Web access over mobile phone networks

   • data services via digital broadcasting

   • on-line combined with television services such as Web-TV

   • 'web-casting' of news, sports and other services

   • telecoms operators providing near-video on demand and cable tv

4. The convergence appears at the level of the network (with the network in each sector beginning to carry services previously associated with other sectors) and at the level of consumer equipment (in the use of telephones, televisions and personal computers for new services, and the future development of new consumer devices as in the TV/PC). As a consequence we are already, in the UK, beginning to see new cross-sectoral corporate alliances e.g. BSkyB and BT in British Interactive Broadcasting and possibly, Microsoft and British Digital Broadcasting. Our regulators also appear to be contemplating new, broader roles (e.g. the ITC's discussions with internet service providers concerning high quality video applications on the World Wide Web).

5. However, a note of caution is due. The concept of convergence is seductive. The possibilities and potentialities of sectors developing in the same direction can become, in the hands of some commentators, a matter of inevitability. The blurring of distinctions between sectors can develop - with superficially attractive but inherently false logic - into the disappearance of any such distinctions. The delivery of various services over the same network can seem to anticipate their becoming essentially the same service. None of these propositions is, in our view, necessarily true.

6. What is at fault with some of the current discussion on convergence as it affects the broadcasting sector is the leap from evidence of technical convergence to a prediction of convergence in content. On the contrary, it by no means follows these will be significant convergence in matters of content between the broadcasting sector and the telecoms/IT sectors. Broadcasting - which from our perspective is primarily about content rather than form, about software rather than hardware, about programming rather than transmission technology - is and will remain significantly distinct for the foreseeable future. We believe this perspective is essential in prescribing regulatory structures for the new technically-convergent era.

7. We further believe an excessive focus on convergent digital technology and the means of delivery can obscure the fact that content - in the broadcasting context, programming - is becoming increasingly important. In the words of the EC Green Paper, 'value [is] migrating from simple delivery to the production and packaging of content' and 'the transmission and delivery of services [is being rendered] a commodity item, converting it into a low-margin, high-volume business.' In the actual and potential explosion of broadcasting hours made possible by digital technology, quality programming will be increasingly at a premium. Regulatory structures formed exclusively on the basis of common technology are in danger of missing the point - the distinctive regulatory concerns associated with broadcast programming may become more not less relevant and necessary in the future.

   The gatekeepers

8. Our further views on why broadcasting is distinctive and what this should mean for future regulatory structures are set out below. We do not want, however, to give an impression that an inward looking view on the future of broadcasting regulation is desirable or adequate. The application of digital technology will of course bring new regulatory issues to the fore. One aspect which concerns us is the role of the gatekeepers to the digital broadcasting era.

9. By this we mean the role of conditional access systems, subscriber management systems, electronic programme guides, and the application programming interface - all of them affecting the way consumers access programming in the more complicated world of digital broadcasting. Key corporate players will have the opportunity - if inadequately regulated - for practices such as discrimination in favour of their own services, cross-subsidisation, channel 'bundling' and predatory pricing. The European Commission's investigation into British Digital Broadcasting may have been an early example of further problems in store, and more generally we are already concerned about BSkyB's overly influential position straddling programming (especially sports and film rights), the transmission system (i.e. digital satellite) and the set-top decoders.

10. We accept that the Television Standards Directive on conditional access systems - which requires that they be offered on a fair, reasonable and non-discriminatory basis - is a valuable early step. We believe both that this should be policed and enforced rigorously and that a new and strong regulatory regime should be developed in the UK governing all aspects of 'gatekeeping' to digital broadcasting.

    A distinctive regulatory structure for broadcasting

11. At the heart of our current concerns, however, is - as indicated above - the future regulatory structure for broadcasting in the digital era. We acknowledge that the case for a single communications regulator - the Office of Communications (OFCOM) - has been widely and strongly articulated, sometimes, though not always, with the assumption that such a body should subsume the activities of existing broadcasting regulators such as the ITC and the Radio Authority. We think that these proposals now need to be examined more carefully and critically.

12. Our starting point as already indicated above in the section on convergence, is that broadcasting - and in particular all aspects of programming - will continue to require a distinctive regulatory approach in the digital era. If anything, the provision of quality programming may become a bottleneck requiring more, not less, regulatory attention. This contrasts sharply with the views of some participants in the convergence debate, who argue that a common regulatory structure entails a minimalist approach to regulation, with an emphasis on competition rules and economic criteria to the exclusion of other aspects of regulation.

13. We believe that one key reason why broadcasting is and should remain distinctive for regulatory purposes is the democratic, social and cultural role of the media. For example, political and cultural pluralism in the media does not develop naturally through market forces and minimal competition rules; it requires a special regulatory framework. Market forces and regulations oriented to purely economic criteria will not deliver a broadcast-service which seeks to educate, inform and entertain for a mass audience as opposed to market niches. Cost-intensive programming outside of the traditional mass market genres such as sport and feature films is unlikely to be encouraged within such a framework.

14. The minimalist regulatory approach is not in our view likely to support the maintenance of quality broadcasting services. We suspect that when, as a consequence, 'market failures' in this area become apparent, the only solution will be ad-hoc interventions by regulators seeking to remedy problems after the event. In short, the public interest in the future of broadcasting involves more than just economic priorities, and distinctive regulatory criteria and structures will be necessary, in our view, to reflect this.

    Public service broadcasting

15. To be more specific, we believe that the aims and values of public service broadcasting (PSB) should remain at the heart of our approach to regulation in the digital era. We see this as entailing a positive role of providing programming for a mass audience which seeks to entertain, educate and inform rather than a negative role of residually supplying what the market fails to deliver. It provides a benchmark of quality against which all broadcasters can be judged and can serve in this way to raise and maintain standards across the board. It is a way of emphasising the need for a range and quality of programming investment which the market may not spontaneously provide, and implies a strong and continuing commitment to original programme production. PSB is above all successful and popular - despite the growth in broadcasting hours, it is the free-to-air generalist PSB channels that continue to attract the clear majority of TV audiences.

16. We are therefore opposed to any notion of a converged regulatory structure which seeks to equate PSB standards to, for example, the universal service obligations familiar from telecoms regulations. Universal service is usually linked to minimal service provisions, an emphasis on access to infrastructure or delivery systems and no concern for content (i.e. the quality of a telephone service is unrelated to the content of the telephone calls). At a time when the EU's Amsterdam Protocol recognises for the first time the centrality of PSB values, it would be sadly inappropriate to reorient our regulatory structures in a different direction.

    Elements of a future regulatory structure

17. These distinctive regulatory aspects of broadcasting will, in our view, continue to require distinctive regulatory agencies for broadcasting even in a technologically-converging digital future. Whether any such agency is part of a single umbrella body is a separate issue, but we would certainly be opposed to a single body attempting to provide a common regulatory approach across all of the converging sectors.

18. The most immediate and obvious area in which broadcasting regulation needs to remain distinctive is that of programme content. In our view, however, it is vital to recognise that content cannot simply be separated from the underlying structural aspects of the broadcasting sector.

19. In particular, the issue of market power, vertical integration and concentration of ownership are elements that cannot be ignored if we wish to retain a broadcast media that is democratic and pluralistic. We would therefore propose that any future broadcasting regulator should have a clear remit to deal with concentration of ownership, media cross-ownership and all issues arising from the anticipated EU initiative on pluralism and concentration.

20. Other structural aspects concern the economics of original programme production. Broadcasting is far from being a free market. There are specific regulations on the proportion of independent production, of original production and of UK/European-originated production. These underpin our broadcasting sector's ability to produce a range of quality programming, and form a necessary barrier to over-reliance on repeated programmes or cheap imports from the world's overwhelmingly dominant audiovisual industry based in the US. These regulations are structural rather than content-related, but we believe it will be equally important for a future broadcasting regulator to retain responsibility in such areas.

21. Ironically, the one area in which we believe broadcasting regulation could benefit from a rationalisation and unification of separate bodies is precisely that of programme content. Under the previous Conservative government we saw the establishment of a surfeit of separate regulators on content - especially the Broadcasting Standards Council and Broadcasting Complaints Commission. These have now been combined into the Broadcasting Standards Commission. We see no reason, however, for the continued separate existence of such a body, and no reason why its functions should not be subsumed under any existing or future broadcasting regulators.

22. Finally, we believe that any future regulatory body should be headed by a Commission rather than a single individual director-general. Broadcasting issues are often more complex and subjective than those arising, for example, in telecommunications. Giving a single individual overall power in such an area would not be desirable. We further believe that any such Commission should be open and accountable both in its operation and in its method of appointment (e.g. scrutiny by Parliamentary Select Committee, advertisement of vacancies).

    Conclusion

23. In recognising the reality of technological convergence, we believe it is essential to realise that this does not automatically or necessarily imply a convergence of the content of the services provided. On the contrary, broadcasting will remain for the foreseeable future a separate sector requiring a separate regulatory approach. Rather than a minimalist approach geared to competition rules and exclusively economic criteria, we see a strong and continuing need for broadcasting regulations reflecting the aims and values of public service broadcasting.

24. We therefore support the need for a distinctive regulatory agency for broadcasting - whether or not this is allied to a broader umbrella body - and for such an agency to have a remit encompassing not just programme content, but also the structural aspects of broadcasting including media ownership and requirements for independent production, original production and UK/European production. If we can retain and develop such a distinctive regulatory approach to the broadcasting sector, we believe the benefits to viewers in terms of the range and quality of programming in the digital era can be hugely significant.