BECTU submission on the Draft Communications Bill to the UK Government

1 August 2002

BECTU submission on the Draft Communications Bill to the UK Government DTI (Department of Trade and Industry) and DCMS (Department of Culture Media and Sport).

Introduction

1. BECTU, as the trade union representing many thousands of members in the broadcasting and audiovisual production sectors, is pleased to be able to present evidence on the draft Communications Bill. As requested in the DTI/DCMS 'Policy' document, we have - with very few exceptions - concentrated on the substance of the Bill rather than offering drafting suggestions. Our response is set out not in order of priority but broadly in line with the order of issues as presented in the draft Bill and accompanying Policy document.
2. We take many of the issues raised in the draft Bill very seriously - including those concerning ownership and the proposed 'light touch' regulation of content. However, given the nature of our own membership, we have a particular concern about the Bill's implications for regional ITV. We do not see this in isolation from other key issues (especially on ownership) but we would ask you to take particular note of our evidence on this matter as set out in paragraphs 25-32 below.

   OFCOM

3. Our overriding concern on OFCOM is to retain a separate, powerful and specific focus on content as distinct from economic and technical regulation. We believe that a primarily economic approach would completely fail to address the cultural, democratic and social aspects of broadcasting (as emphasised, in relation to public service broadcasting, by the EU Amsterdam Protocol). We further believe that competition-orientated regulation cannot guarantee the benefits of public service broadcasting (PSB) nor media pluralism nor quality programming. Market failure in all of these areas is - as many commentators have noted - a likely outcome.
4. We therefore wish to see:
   • A distinct and identifiable division or department within OFCOM to deal with content regulation.
   • Separate personnel to undertake these functions, with appropriate expertise and experience.
   • Clear and transparent means of conflict-resolution with OFCOM's economic and competition-driven objectives.
5. We welcome the establishment of a Content Board within OFCOM and call for OFCOM and the Content Board.
   • to be open and transparent in their operations, with meetings in public wherever possible and/or full published minutes.
   • to be accountable to Parliament and to the relevant Parliamentary Committee (including the duty to submit an annual report and to be subject to examination by the Committee).
   • to include a suitable proportion of people with a content background who work in the industry, specifically including trade union stakeholders (and with Content representation on the full OFCOM Board).
   • to be representative of the nations of the UK and accountable to each national Parliament/Assembly (including the duty to report at least annually, to be questioned on such reports and for relevant key appointments to be subject to scrutiny).
   • to continue the current consultative arrangements with industry bodies, including specifically the Federation of Entertainment Unions.
6. We believe that a regulator as outlined above - representative, accountable and with a strong focus on content - would bring wide and lasting benefits to the UK's broadcasting system.
7. As a trade union representing members at the existing regulators ITC and the Radio Authority, we have further and very particular concerns about the staffing arrangements at OFCOM.
8. We therefore seek reassurance on the future job security of ITC and Radio Authority staff and seek fair treatment in respect of conditions of service at OFCOM.
9. On training:
   • We welcome the inclusion of training within Tier 1 responsibilities applying to all broadcasters governed by OFCOM.
     
   • We support the duty of OFCOM to promote training and retraining opportunities both for staff and also for the large pool of freelance labour on which the sector is heavily reliant.
     
   • In order to achieve this, we believe OFCOM should monitor broadcasters' investment in training; agree minimum levels of contribution to freelance training as a condition of licence; and require broadcasters to publish details of their investment in and provision of training on an annual basis.
   • We further believe that in undertaking this work, OFCOM should be charged with working in partnership with Skillset, the relevant Sector Skills Council.
10. On equal opportunities:
    • We support the duty of OFCOM to promote all aspects of equality of opportunity in employment.
    • We wish OFCOM to take forward the work of the industry's Cultural Diversity Network and to address the widespread concerns about the representation of our multicultural society both on and behind the screen.
    • We specifically wish OFCOM to address the need to facilitate increased participation by people with disabilities as workers in the media.
11. On matters of intellectual property, we wish OFCOM to have a concern to protect and enhance the rights of individual creators, whose work is crucial for the future health of the audiovisual sector in the digital era.

    Universal access and the transition to digital

12. On universal access to television, we believe strongly in the need:
    • to ensure that public service channels, free at the point of use, will continue to be available both before and after digital switchover.
      
    • to maintain and extend 'must carry' obligations for public service channels (including any new licence-fee funded BBC services) on cable and satellite.
    • to ensure PSB channels are given due prominence and easy access on electronic programme guides.
13. While we believe the draft Bill addresses these issues in respect of the period after digital switchover, we believe there is a need for all such policies to be applied with immediate effect.
14. The proposals on spectrum ownership constitute a separate issue, which is nonetheless linked to the transition to digital switchover. We support in principle a charge on satellite operators for the use of spectrum. We regard this as a fair equivalent to the much more substantial licence fees paid by terrestrial broadcasters.

    BBC

15. We continue to regard the BBC as the cornerstone of PSB in the UK. In this respect, we welcome the Secretary of State's recent remarks to the effect that licence-fee funding, as the 'venture capital for the whole of British broadcasting', should remain in place beyond the forthcoming charter review.
16. We believe it rightly follows that the BBC should not be placed wholly under OFCOM. The BBC has unique public service responsibilities to licence-fee payers and therefore to the public at large, which places it in a very different position to commercial broadcasters and it would be wrong for it to be situated as just another broadcaster to be regulated by OFCOM. We therefore strongly support the continuation of separate regulation (in respect of Tier 3) by the Board of Governors together with backstop powers held by the Secretary of State and accountability to Parliament.
17. In tandem with this, however, we support the need for reform within the BBC to achieve:
    • A clear and meaningful separation of the Governors from the Executive.
    • A clear remit for the Governors and an enhanced and separate secretariat.
    • A greater obligation for information disclosure and transparency of operations (not limited to the proposed statements of Programme Policy), including a requirement to hold meetings in public.
    • Greater accountability, including the scrutiny of appointments by Parliamentary Committee.
18. We note, nonetheless, that OFCOM will hold regulatory powers over the BBC in a number of areas, including Tier 1 and 2 obligations. We support the proposed requirements on the BBC and other broadcasters to be accountable to OFCOM in respect of original production, regional programming and regional production (subject to our strongly held view, as set out below, that these requirements should in themselves be strengthened).
19. We hope that OFCOM's more general advisory role in relation to the BBC will be used sparingly. We believe there is a potential conflict of interest between a regulator whose primary concern is with commercial broadcasters and the role of a publicly-funded competitor (especially in relation to any proposed new services). Any tendency for OFCOM to act as an agent of commercial broadcasters' interests in opposition to BBC interests should be strongly resisted.

    Content regulation

20. We welcome the Government's commitment to maintaining the role of public service broadcasting and the broad thrust of the PSB remit, as derived from the current BBC agreement. In our view PSB has and should retain a central and defining role in the British broadcasting system. We believe, however, that a commitment to PSB is incompatible with 'a duty to secure light touch regulation' and in particular with the proposed self-regulation for the qualitative PSB regulations covered by Tier 3.
21. We do not believe that a high quality and broad range of programmes can be adequately delivered and monitored through Tier 3 self-regulation by the broadcasters. We do not believe it is sufficient for OFCOM to evaluate retrospectively whether broadcasters have adhered to their annual Statement of Programme Policy. We question the decision not to adhere to the previous regulatory requirement for genre quotas. We further believe that experience of the ITC's trial of such an approach over the past year has confirmed our fear that broadcasters' actual performance will not be seriously challengeable under such a system. Without stronger powers of intervention, we believe the regulator will almost inevitably be obliged to accept broadcasters' arguments that commercial imperatives may prevent them fulfilling their initial programme promises.
22. Rather than Tier 3 self-regulation by the broadcasters, we wish OFCOM to have a proactive and interventionist role in order to secure quality PSB standards. We believe OFCOM will need, at an early stage, to demonstrate regulatory power in this area - especially in the context of the proposed ownership deregulation.
23. Rather than diluting OFCOM's regulatory role in securing quality PSB programming, we recommend a step in exactly the opposite direction. We believe OFCOM should have the power to place positive programme obligations of a public service nature on broadcasters such as BSkyB who, under the draft Bill as it stands, are constrained only by the minimum standards of Tier 1. OFCOM should have the ability to monitor and challenge the performance of such broadcasters in respect of programme originality and quality and to insert positive programme requirements on those organisations which have sufficient resources and market share to take on additional obligations.
24. In summary:
    • We oppose self-regulation in respect of Tier 3 and wish this to be replaced by a proactive and interventionist role for OFCOM in order to secure quality PSB standards.
      
    • We wish OFCOM to have the power to impose a measure of positive programme requirements (eg on the amount of original programming) on those broadcasters currently governed only by minimum Tier 1 standards but who, like BSkyB, have the resources to incur to some additional obligations.

    Regional ITV production

25. As indicated in the Introduction, this is the issue of highest practical priority for BECTU. We believe any discussion of the place of the nations and regions within the proposed new broadcasting framework will be merely symbolic without real and meaningful commitments in this area. We also acknowledge, however, that debate in this area should be taken in the context of the debate on ownership regulation.
26. As indicated in the Communications White Paper, regional programme production has long been the strong and distinctive characteristic of ITV. The ITC, in its annual Report 2001, added that 'the provision of 15 different national and regional services on ITV across the UK ' is a 'premier public service feature of commercially-funded free-to-air television'. Strong regional production centres bring both economic and cultural benefits to regional economies; and they can help address geographical imbalances within the national television production sector.
    • According to research by the South West Economy Centre, the multiplier effect of broadcasting activities (ie their boost to output and growth in the rest of the regional economy) is 2.42 for income (every £1 earned by the sector generates a further £1.42 for the region) and 3.59 for employment (every broadcasting job generates a further 2.59 jobs).
      
    • Quite separately, Manchester Business School has estimated that Granada TV contributes, directly and indirectly, £160m to the North West and supports 4,000 jobs.
      
    • Market research involving viewers consistently records the high value placed by them on regional programming; and some regional programmes achieve very significant audience shares.
      
    • All of this, of course, depends on each regional TV centre retaining a critical mass of production, labour, facilities and training resources to sustain an independent presence rather than rely on servicing from London.
27. We are extremely concerned, especially in the context of the proposed ownership deregulation, that regional ITV production is under critical threat. Recent trends have not been encouraging:
    • The ITC's new 'Charter for Nations and Regions', (which, in our view, should not have been introduced in advance of the debate on the draft Bill) is leading to a reduction in regional hours, with consequent planned redundancies already at SMG.
    • This is set against the background of significant decline in the ITV regional production base since the ITV franchise auction in 1991, involving redundancies (eg YTV staff down from 3,600 to 600, Central Nottingham staff down from 2000 to 350, Anglia staff down from 750 to 200); studio closures; cheap, common formats; and increased reliance on London-based facilities and freelances.
    • Whereas ITV franchise bids in 1991 outlined production plans across many genres (eg Granada's bid included entertainment, sport, current affairs, documentaries, religion, arts and childrens'), the ITC's regional breakdown now only requires 'news' and 'other'.
    • Programmes are increasingly being given vague, all-purpose regional remits eg
      • Programmes which can count as factual, lifestyle or religion
      • Programmes made in Manchester can be rebranded for Yorkshire
      • Programmes made in London used across the company by Granada and Carlton
      • Programmes made by SMG to be used in either STV or Grampian
      • A YTV job finder text service: broadcast overnight and counting as 'regional production'
    • Some small and medium ITV companies produce no ITV network programmes at all, with the consequent loss of production experience, deskilling and migration of some key staff to London.
    • Broadcast transmission control functions (ie playout centres) are being increasingly consolidated into only 2 or 3 sites rather than dispersed regionally.
28. We therefore believe the Government should be concerned, more than ever before, to secure:
    • a broad range of regionally-originated programming of high quality from each licence-holder, and with a suitable proportion in peak time.
      
    • the use of the full range of regionally-based staff, freelances and production facilities (to the exclusion of notionally - regional productions made with London-based facilities and labour).
      
    • a guaranteed minimum contribution to the ITV network from each licence-holder in proportion to their size.
      
    • the retention or restoration of regionally-based transmission control functions.
29. Specifically in terms of the wording of the draft Bill, we note the existence of the regional production quota (clause 193) and the regional programming quota (clause 194). We further note the original production quota (clause 190) applying to all PSB broadcasters. We welcome all three quotas in principle.
30. However, we wish these provisions to be strengthened:
    • We note that there is no specific minimum level for the regional production and programming quotas but merely a level which is 'appropriate', 'suitable' or 'sufficient' in the view of OFCOM. We believe these quota requirements should be strengthened by specific percentage proportions which either match or exceed current levels; and or by an additional requirement that each quota should be set at a level which is 'substantial and significant', ie insert 'substantial and significant' at each appropriate place in clauses 193 and 194.
    • We note with concern that clause 193(2) requires the inclusion of a regional production quota only if OFCOM considers it appropriate. We take this to be a means of excluding GMTV (and only GMTV) from the quota. If so, this requires explicit clarification. In any event, we believe the regional production quota should be compulsory for all C3 licences other than GMTV and that this should be made explicit.
    • We are clear that the original production quota in clause 190 applies not just to C3 but to all PSB broadcasters. We believe this should not just be 'appropriate' but 'substantial and significant' and either matching or exceeding current levels of original production for all such channels.
31. As further protection against the inevitable future commercial pressures to diminish regional production levels, we advocate that:
    • Specific quota commitments for each licence-holder should be incorporated into the ITV licences, as should a comprehensive breakdown of these commitments by programme genre
    • Such commitments should not be reducible by the regulator but only by the approval of Parliament.
    • Subsequent ownership changes should not be considered as valid grounds for reducing quota commitments.
    • All such licence commitments should be in the public domain.
32. There is a real danger - in the context of the Government's other proposals - that the effect of the draft Bill will be the further decline of regional production and programming in ITV, thereby destroying the distinctive feature of the network. We believe this is undesirable not just on broadcasting grounds, but for broader economic and cultural reasons. We believe such a decline is avoidable - but only if the regional quota requirements are made compulsory, substantial and explicit. Without this strong regulation in favour of regional broadcasting, we fear the market forces unleashed by deregulation will fatally undermine the regional dimension of our broadcasting sector. This should not be allowed to happen.

    Channel Four

33. We welcome the retention of Channel 4 as a statutory corporation with its distinctive remit; together with the requirement on regional programme-making for the Channel.
34. However, we share C4's concerns on unrestricted non-EU ownership. Our views on this are set out below. At this point we note that the Channel has good reason to fear the threat to its role and remit - otherwise so widely praised from all sides - by the proposed ownership deregulation.

    News

35. We welcome the proposal to retain the nominated news provider system but see no justification for the further inclusion of an enabling power of revocation. We believe that the potential removal of the news provider system altogether could endanger the long-term guarantee of a quality commercial news service. Given the uncertainties involved, there seems no reason to provide for the abolition of the news provider system.
36. Of more immediate relevance, we support the new requirement for C3 licencees to provide adequate financial support for a high quality news service by the news provider. The remorseless negotiating down of ITN's news contract is threatening the viability of the service (eg ITC guidance in the early 90's suggested a reasonable contract price level of £55-60m, compared to the current actual £36m). This trend should now be reversed with the active involvement of OFCOM.
37. As a further point on news, we would support the insertion in clause 191 of a requirement for a 'sufficient' rather than unspecified amount of time (including peak time) for news and current affairs.

    Independent production

38. We support in principle the continuation of the independent production quota. However, we have long-held concerns about the concentration of ownership in this sector and the trend towards the acquisition of independents by broadcasters. The sector is now significantly different from that originally envisaged, when there was a clear desire to open up broadcasting to a range of differing and often smaller companies. A number of ' independents' are now affiliated to large international corporations and are themselves larger than some of the broadcasters they negotiate with for commissions. Arguably, some of the small ITV companies could now argue for the right to make independent productions for the BBC.
39. We question the notion of needing to bring a balance to the relationship between, by implication, 'small' independents and 'dominant' broadcasters (as in PACT's proposal for a Code of Practice requiring, among other things, equal access to programme commissioners as between independents and in-house producers). This ignores the reality of the recent period in which broadcasters (as indicated above in relation to ITV) have suffered significant reductions in staffing and programme-making facilities, especially in the regions. We would oppose any further measures leading to the casualisation of staff and the closure of facilities in broadcasting.
40. We further think that the notion of a single independent sector should be critically examined. This reality, we believe, is of a 2 tier sector comprising the large corporate independents (often with preferred bidder status for commissions) and small genuine independents, often struggling for survival (especially in the regions and especially among ethnic minority producers). We hope Government will not, yet again, give an uncritical response to the opportunism of already privileged corporate operators in this sector.

    Media ownership

41. The power of the media in not just reflecting but forming opinion means that regulation of media ownership is an essential component of democracy. We are all the more concerned, therefore, at the draft Bill's proposals in this area. In our view, the media ownership proposals are dangerously and unjustifiably deregulatory, especially in respect of the ending of restrictions on non-EU ownership. Taken together with the proposed light touch approach to content regulation, we believe this threatens the future of public service broadcasting (PSB) in the UK. In our view, the quality and range of programming currently provided in the UK broadcasting system is guaranteed by strong and committed regulation rather than market forces and competition. We believe both quality in programming and pluralism in ownership are likely to diminish irretrievably if the Bill remains unamended and leaves us with on one of the most deregulated regimes in the world.
42. In particular, we oppose the removal of restrictions on non-EU ownership of ITV/C5. We believe this could hand ownership of significant parts of British broadcasting to global, especially American, corporate interests. We see no economic benefit and a clear cultural loss. Far from attracting significant inward investment and new ideas we believe American companies would import their own vast programme stocks, inflate the already massive audiovisual trade deficit, remit a large proportion of their profits, and operate according to corporate and cultural priorities determined outside the UK.
43. We note the complete lack of current reciprocity in terms of British access to ownership of US media companies. Failing the withdrawal of this proposal altogether (which would be our preference), we therefore believe that non-EU ownership of ITV/C5 should be made conditional on British access to ownership of equivalent companies in the relevant country of origin.
44. We take the view that single ownership within all or an overwhelming proportion of ITV is undesirable in itself and completely unacceptable without stringent commitments on ITV regional production as recommended above.
45. We note that even if single ownership of ITV is allowed, this will still raise competition issues in the market for television advertising, with Granada and Carlton controlling an estimated 57% between them. Avoidance of this problem by 'warehousing' a sales house would be a predictable response. We believe the Office of Fair Trading should rule out such measures and insist on complete disinvestment and a strong cap on market share.
46. We welcome the retention of cross-ownership (20:20) restrictions as between national newspapers and C3. However, we see no reason - other than seeking to gratify Rupert Murdoch - for lifting such restrictions in respect of Channel 5. If BSkyB were to become the owner of C5, this would open huge opportunities for cross-promoting the channel in newspapers and on satellite TV - to the detriment of C3 (with stronger PSB obligations and no equivalent cross-promotion). We therefore believe the cross-ownership restrictions should also be retained in respect of C5, which continues to prosper within the current regime.
47. In respect of the rules on disqualifications:
    • We welcome the proposal to allow local authorities to provide non-party-political information services by broadcasting.
      
    • We support the retention of the prohibition on ownership by political parties (in the absence of the reform of party funding).
      
    • We oppose the lifting of the prohibition on ownership by advertising agencies on grounds of the conflict of interest between commercial and editorial concerns.
      
    • We oppose the relaxation of ownership restrictions on religious bodies. We see no justification for the special treatment of organisations which happen to reflect a religious as opposed to a secular world-view, especially when political parties (which could claim equally strongly held views on morality and policy) are disqualified. The restrictions on religious ownership should be retained in full, especially in the light of the experience of religious media ownership in the US, with its overwhelmingly conservative influence on public debate.
48. On the review of ownership rules, we continue to have a strong preference that media regulation - given all the broader implications for our democracy - is dealt with through primary legislation. We therefore oppose the proposal for a 3 yearly review by OFCOM to be followed by possible secondary legislation. In our view it is unacceptable that major future media reform could be introduced without full primary legislation.

    Radio

49. We have grouped our comments on radio in one section because we believe this is a distinctive sector deserving separate attention.
50. Precisely for this reason, we welcome the proposals for a separate Radio Group within OFCOM. We strongly favour the retention of a separate department, personnel and expertise within OFCOM to deal with the regulation of this distinctive sector.
51. On regulation:
    • We welcome the new duty on OFCOM to promote and protect the local content and character of local radio.
    • We welcome the restrictions on the onward sale of licences, with a view to retaining the character of the services and preventing yet a further narrowing of the range of programming offered.
52. On ownership:
    • We note the long term trends towards increasing concentration of ownership in groups of stations, increasing uniformity of output and formats and unceasing self-interested lobbying by the radio companies for ever greater deregulation.
    • In the light of this:
      • We oppose the lifting of the prohibition on owning more than one national commercial licence.
        
      • We remain unconvinced that the total abolition of the points system and reliance solely on competition authorities will provide anything like sufficient protection against excessive concentration of ownership.
        
      • We support, as at least a minimum protection, the proposed 'three plus the BBC' formula for local licence ownership, and hope that pressure for further deregulation from the radio companies will be resisted.
        
      • We believe that where holdings exceed the limits set in the regulations, this should lead in all circumstances to a requirement for disinvestment.
53. We are particularly concerned about the implications of the lifting of restrictions on non-EU ownership.
    • Clear Channel (the US company regarded as a likely predator) has a well established track record of imposing common formats with minimal local content. The company also has an ethos of selling advertising as a priority over producing programmes.
      
    • We believe that other non-EU companies are very likely to operate in a similar way.
      
    • We therefore oppose the lifting of non-EU ownership restrictions, while again noting the complete lack of reciprocity in the US.
54. On access radio:
    • We support the development of this new, very local, community-based radio sector as long as it is adding to rather than undermining the already fragile ecology of local radio.
      
    • We therefore support the ban on ILR ownership of access radio companies.

    Conclusion

55. We hope Government will take note of our views (especially on regional ITV and also on issues of ownership and content regulation) and will amend or remove those proposals which we believe will be deeply damaging to the future of British broadcasting.