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Tuesday, 7 May, 2002, 16:42 GMT 17:42 UK
Culture Secretary's speech in full
This is the full text of Culture Secretary Tessa Jowell's Commons statement about the draft Communications Bill.

With permission, Mr Speaker, I should like to make a statement on behalf of my Right Hon Friend, the Secretary of State for Trade and Industry, and myself on the draft Communications Bill, produced jointly by our departments and published today.

Copies have been placed in the Library and are available from the Vote Office, along with a Policy Document and Explanatory Notes. It is also available on the world wide web.

Mr Speaker, the White Paper in December 2000 A New Future for Communications set out the Government's objectives:

  • Creating a dynamic market

  • Universal access to a choice of diverse services of the highest quality

  • Safeguarding consumers and citizens

  • Minimising regulation

    Everything we announce today flows from those principles.

    The communications industry is of immense importance to this country, so we are determined to proceed wherever possible with the fullest consultation and consensus.

    That is why we consulted further on media ownership.

    That is why the bill published today is in draft and subject to scrutiny by a joint committee of both Houses.

    This degree of consultation on major legislation is perhaps unprecedented, but it is important that the legislation has the confidence of the industry and the public.

    The Case For Change

    There is general agreement that the existing regulatory framework has become out-dated by the rapid changes in technology, markets, and in consumer behaviour over the last six years.

    The communications industries are regulated in different ways by separate regulators, yet they are coming increasingly closer together in their ownership and their operation.

    The evidence is all around us.

  • TV and radio companies are linked to newspapers;

  • traditional media are developing web sites;

  • cable companies deliver television, radio, telephony, interactive services and broadband internet.

    This converging industry needs a converged regulator, providing industry-specific regulation with a light touch.

  • A framework, which protects the citizen while setting business free.

  • A regulatory framework, which offers certainty where it is needed for business plans and investment, and flexibility, where it is needed in a fast-moving environment.

    Previous legislation in 1984, 1990 and 1996 has left us with clumsy regulation that inhibits investment and reduces efficiency.

  • the ownership rules send the signal that the UK is not open for investment in our communications industries.

  • the rules on newspaper ownership are opaque, discriminatory and still retain criminal sanctions.

  • the rules on news on ITV have seen investment in ITN fall.

    Furthermore, technology is changing, throwing up new challenges and new opportunities. The case for change is compelling.

    The twin ideals of regulation are to be light in touch yet effective. The current rules are neither.

    The Industry Context

    The communications industries are vital to the health of the British economy and to our democracy.

    Every week we watch over 1bn hours of television, listen to over 1bn hours of radio and buy 100m national, regional and local newspapers.

    The BBC licence fee costs each viewing household 112 a year and raises 2.5bn. We send billions of text messages a year. Three quarters of adults use mobile phones. 24 million homes have internet access.

    Crucially, our democratic debate could not take place without the newspapers, television channels, radio stations and internet sites that tell what is happening.

    These sources can be biased, sometimes wrong, occasionally strident. But there are many of them, and people can hear many voices. This plurality must be protected at all costs.

    White Paper Policy and Subsequent Developments

    The White Paper proposed one regulator - Ofcom - to replace the ITC, the Radio Authority, the Radio Communications Agency, the Broadcasting Standards Commission and Oftel.

    It also suggested:

  • Ofcom to have sector-specific powers to promote competition;

  • Quality public service Broadcasting to be protected

  • Measures to ensure universal access to public service broadcasting channels over all main platforms

  • The consolidation of ITV subject to competition rules

  • The simplification of regulation for commercial radio

  • BBC regulation to be brought within Ofcom for basic standards and for specific PSB requirements, while retaining the regulatory role of the BBC Governors

  • The promotion of broadband

    Since then policy has been developed and you see the detail in this draft Bill, supplemented by the Policy Document.

    Structure and Role of Ofcom

    I turn now to the structure of OFCOM. Its top board will operate at the highest strategic level. It must be able to move quickly and with agility to address issues in a fast-moving sector.

    At the heart of its operations will be its sector-specific responsibility to promote competition:

  • to curb abuses of dominant market positions;

  • to ensure fair access to dominant network systems and platforms.

    In addition, all broadcasters, including the BBC for its commercial services, will continue to be subject to the Competition Act.

    OFCOM will have a number of other duties to promote certain interests, especially those of the nations and regions.

    That is why we are providing for OFCOM to establish a Content Board as an integral part of its structure.

    It will be a significant body, bringing together diverse interests, including those of the different nations of the United Kingdom.

    There will also be a Consumers Panel, able to articulate the needs and views of consumers, again with strong representation from Scotland, Wales and Northern Ireland.

    The Draft Bill proposes a regulatory regime which will be lighter in touch, with greater reliance on self regulation by all broadcasters.

    OFCOM will be taken out of day to day regulation, and use its backstop powers only if licensed broadcasters fail to deliver.

    Ofcom's responsibilities will extend to the BBC for the basic broadcast standards and for agreed quotas for such things as regional production, while also setting the general standards across the industry.

    It will be responsible for general reviews of Public Service Broadcasting.

    However, the quality of BBC output under its public service remit will remain fully regulated by the Governors. This regime, with its detailed scrutiny by Governors, is a measure of the special role the BBC fulfils.

    This system has developed because the BBC's obligations are the greatest, not the least.

    Public Service Broadcasting

    But Mr Speaker, we recognise that the media of the future must provide the high quality public service broadcasting that people have enjoyed in the past.

    Competition alone cannot guarantee this. Public service broadcasting nurtures creativity. It is vital to independent producers.

    It provides training grounds which sustain the whole sector. It meets the particular needs of local and regional communities, both in programming and in production.

    And in the case of the BBC, the 2.5 billion raised annually by the licence fee is venture capital for the whole of British broadcasting.

    Most importantly, Public Service Broadcasting works for the public.

    The Draft Bill therefore proposes for the first time to define Public Service Broadcasting and to consolidate in statute the hierarchy of PSB that viewers and listeners will readily recognise.


    The Draft Bill is much more than a new system for regulating the content of TV and radio broadcasting.

    Telecommunications become ever more important to our economy and to our society.

    By bringing together the functions of Oftel and the Radio Communications Agency with those of the Independent Television Committee, the Radio Authority and the Broadcasting Standards Commission we will ensure that content, economics and technology are viewed as a piece, not as fragments.

    The competition responsibilities for Ofcom are intended to deliver dynamic competitive markets in networks and infrastructure as well as in content.

    Our economy needs access to networks to be opened up.

    That means a regulator that is light touch where possible, but powerful where necessary.

    The new regime for telecommunications will enable OFCOM to operate within a harmonised European framework, providing greater certainty so that UK companies are better able to sell their services abroad.

    The new regime will be lighter in touch, removing the requirement for licensing of telecommunications systems, thereby removing about 400 licences, and replacing it with a much simpler regime for electronic communications.

    The new regulator will have the right responsibilities and powers to promote competition, tackle abuses and make sure that consumers' interests are protected.

    Spectrum Management and Spectrum Trading

    We will also extend the principles of deregulation and market competition to the allocation of the radio spectrum by introducing spectrum trading.

    Spectrum is to the modern age what iron and steel were to the first industrial revolution. It must be used efficiently.

    Companies need to know that they can gain access to spectrum so that they can bring their ideas to the market.

    In future, as well as being able to apply for a licence, firms will also be able to buy spectrum from an existing user.

    This should prevent the hoarding of spectrum, increase the number and range of users, deliver significant benefits to businesses and consumers and promote the innovation on which future UK competitiveness depends.

    These proposals are broadly in line with the recommendations of Professor Cave's independent review of spectrum management, published in March.

    We intend to respond to this review by the summer and I would therefore emphasise that all the spectrum management provisions are subject to revision.

    Internet The Draft Bill will continue our policy of not imposing regulation on the operation of the internet, although we will continue to work with the industry to improve the standards of protection available through self-regulation.

    Media Ownership

    Lastly, I come to media ownership.

    Competition, and competition rules to regulate undue economic power, are increasingly recognised here and abroad as the best means of delivering innovation, investment and employment.

    It is our intention to apply the same principles to the communications industry.

    But the media are different from other industries in one crucial respect - they are uniquely important to the debate that underpins our democracy.

    Citizens need access to a range of different media voices if they are to take informed decisions.

    We need a system that delivers a plurality of owners, none dominant, and a diversity of output.

    Our approach is simple and proprietor-neutral.

    We will deregulate where it is possible to rely on competition law to maintain a wide range of voices.

    Where it is not, we will establish clear, predictable rules.

    The changes we are proposing today will remove barriers to investment, will encourage innovation and will allow companies to consolidate and expand.

    Ofcom will combine the important twin roles of promoting competition while protecting plurality and diversity.

    Within TV, radio and newspaper markets competition law will tend to encourage dispersed ownership and new entry. We will therefore remove most ownership rules within those markets, retaining only those we need as minimum guarantees of plurality.

    Overall we intend to get remove or relax most rules concerning media ownership, while keeping those necessary to protect the public interest.

    We will strengthen safeguards for news and other broadcast content.

    The rules we will scrap include:

  • Those which prevent single ownership of ITV

  • Those which prevent large newspaper groups from acquiring Channel 5

  • Those which prevent ownership of more than one national commercial radio licence
  • We will ease the complex rules preventing consolidation of ownership of local commercial radio.
  • We will scrap the criminal sanctions that apply in the newspaper merger regime

    We also intend to scrap the inconsistent rules that prevent the non-European ownership of some broadcasters.

    It makes no sense that, that French, Italian or German companies can own TV and radio licences but Canadian, Australian or US companies cannot.

    The resultant inward investment should allow the UK to benefit rapidly from new ideas and technological developments.

    New blood, new competition, will help give our industry the edge.

    The recent CMS Select Committee report on Communications, for which I thank my Right Honourable Friend and his colleagues, made a case for relying on competition law.

    But we do not believe that this alone will guarantee the plurality of ownership that democracy demands.

    We will therefore retain three key limits on cross-media ownership to safeguard debate at every level - national, regional and local:

  • First, recognising that most people get their news and information from national newspapers and from terrestrial television, we will keep a simple rule that any newspaper group with over 20% of the national market will not be able to own a significant stake in ITV, the only commercial public service broadcaster with universal access to a mass audience, currently 25% of all TV viewing.

  • Second, a parallel 20% rule will prevent anyone with a dominant position in local newspapers owning the regional ITV licence in the same area;

  • And third, there will be a scheme to ensure that at least 3 commercial local or regional media voices exist (in newspapers, TV and radio) in addition to the BBC in almost every local community.

    Where necessary we will retain and strengthen content regulation to ensure the quality, impartiality and diversity of broadcasting services:

  • OFCOM will have the power to investigate the news and current affairs programming of any local radio service if they have concerns about accuracy or impartiality.

  • They will have a new duty to protect and promote the local content of local radio services

  • They can vary any licence on change of control, to ensure the character of the service is maintained. For ITV, this will protect regional production and programming requirements

  • They will oversee the nominated news provider system for ITV, to ensure high quality and independent news on free-to-air public service television.


    Mr Speaker, in sum these changes will be deregulatory.

  • We will depend more on competition, and on competition law exercised by a sector-specific regulator

  • Ownership regulations will disappear or be reduced.

  • Self regulation will be extended wherever possible.

  • Complex schemes for licensing networks and access to them will be scrapped and replaced with a stream-lined system.

  • All regulations will be reviewed regularly.

    The rules that will remain will be simple and purposeful:

  • A streamlined system for newspaper mergers

  • Simple limits on cross ownership of ITV and the largest newspaper groups

  • Minimum levels of ownership for local radio, and for cross ownership by local newspapers

  • Content rules in broadcasting to ensure UK production, regional production, local and regional programmes and accurate, impartial news and information.

  • Public Service Broadcasting protected in the digital future as it has been in the analogue past.

    Mr Speaker, reform of the regulation of this vital sector is a major task.

    The draft Bill will exceed 250 clauses. The accompanying documents also indicate areas of policy not yet fully reflected in the draft clauses, notably those giving effect to the policies on media ownership which I have announced today.

    Like the changes to the BBC Agreement, these will be published shortly so that they can be considered alongside the draft Bill.

    Our proposals are subject to a three month consultation period and I am delighted that both Houses have agreed also to subject the draft Bill to pre-legislative scrutiny.

    We shall bring forward the Communications Bill itself as soon as parliamentary time allows.

    Mr Speaker, my Right Honourable Friend and I want Britain to have the most dynamic communications industry in the world.

    We want Britain to continue to have the best quality TV and radio in the world.

    This Bill is the route-map to making these ambitions a reality. We look forward to hearing the views of Honourable Members; and we commend the draft Communications Bill to the House.

    Adam Smith, from media buyer Zenith Media
    "The force of globalisation is simply to make broadcasters behave in a more rational way"

    In DepthIN DEPTH
    Charting its past, present and digital future
    See also:

    20 Jun 01 | TV and Radio
    Communications Bill on back burner
    20 Jun 01 | TV and Radio
    Communications Bill's likely tasks
    11 Jun 01 | TV and Radio
    Tessa tackles in-tray
    18 Oct 01 | TV and Radio
    Watchdog calls for ITV shake-up
    30 Jul 01 | TV and Radio
    Keeping tabs on TV
    12 Dec 00 | Business
    Media reform heralds single ITV
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