Introduction

Public service broadcasting has been for long central to British culture. This is partly due to the internationally-renowned quality and objectivity of the BBC, but also due to the high quality of the regulated private broadcasters such as ITV and Channel 4. Yet broadcasting is also an industry, and we have had increasing conflicts between the role of public service broadcasters and that of private broadcasters who claim that they are disadvantaged by unfair competition, especially from the BBC, and by restrictive rules on media ownership. The Government has attempted to resolve the problem in the Communications Act 2003 which makes fundamental changes to both the regulation of public service broadcasting and the rules on media ownership, and this will be my main theme to-day. First some background is however necessary.

The Dual System of Public Service Broadcasting

The best known public service broadcaster is of course the BBC in television, radio and increasingly on the Internet; it is funded by a licence fee payable by all users of television sets. The system of regulation of the BBC is unusual in that it has mainly taken the form of self-regulation. Thus the BBC is subject not to statute but to a Royal Charter and an Agreement with the minister. The Agreement sets out requirements as to programmes, for example that they must be ‘provided as a public service for disseminating information, education and entertainment’; both Charter and Agreement come up for renewal in 2006. Enforcement of the public service remit does not involve an independent regulator but the Corporation’s own Board of Governors, and this has been increasingly criticised on the ground that they are not sufficiently independent of BBC management. There has also been loud criticism of the BBC from commercial broadcasters which consider that it is merely duplicating what the market can already provide, for example in entertainment and in website provision, and engaging in unfair competition because of its privileged access to public finance.
It is not only the BBC, however, which is subject to requirements for public service broadcasting. These apply also to the major private broadcasters. Thus all are subject to negative ‘consumer protection requirements’, for example to protect children and avoid indecency and excessive portrayal of violent scenes; ITV is also subject to positive requirements to the effect that, for example a sufficient amount of time was given to programmes of high quality, and these are set out in detail in the licences of the ITV companies. Channel 4 is required by statute to have a distinctive character and to cater for interests not catered for by other private broadcasters. These requirements were enforced by the Independent Television Commission, which had substantial powers to fine for breaches of the requirements.
There is thus a dual system by which the BBC ‘kept the private broadcasters honest’ through competition on quality, and the private broadcasters ‘kept the BBC on its toes (alert)’ through innovation and popular programming.

The Changing Broadcasting Context

This system has increasingly come under threat. Firstly, the development of digital broadcasting has ended the justification for regulation on the grounds of shortage of spectrum, and the proliferation of channels available, especially on subscription, has led many to question the need for detailed regulation of programme quality; instead it is suggested that the market can be the judge of what viewers want to watch. A number of new services have been highly successful, notably Murdoch’s BSkyB, which has achieved high viewing figures through a strategy of developing rights to sporting events and to recent films. This has had two effects; firstly it has affected the profitability of the private public service broadcasters such as ITV by attracting advertisers, and secondly it has changed viewing patterns. Thus in 2003 the main terrestrial television channels captured 76% of viewing, compared with 87% in 1998; the fall was larger for younger viewers. All these changes have led to increasing questioning of the existing regulatory model.

The Communications Act 2003

In 2000, the Government published a White Paper (A New Future for Communications) proposing radical reform. The most highly publicised proposal was for a single regulatory body for all forms of communications, including television and radio but also spectrum management and telecommunications, so reflecting the convergence of different forms of communication. Underlying the proposals were two other themes; firstly re-defining public service broadcasting (the continuing importance of which was stressed in the paper) and moving to partial self-regulation to enforce the requirements on private broadcasters, and secondly liberalising media markets by lifting some important restrictions on media ownership.
The proposals became law in the Communications Act 2003 which established the new regulator in the form of the Office of Communications (Ofcom). For the first time, the Act sets out in detail what is meant by public service broadcasting, in sec. 264, which I have copied. Thus Ofcom is to review periodically the extent to which all broadcasters taken together (including the BBC) meet the requirements of public service broadcasting. These include, in subsection. 4, provision of services which deal with a wide range of subject matters, meet the needs and satisfy the interests of the available audiences, and meet high standards of quality. It must have regard to a number of other requirements set out in subsection 6, including support for cultural activities, comprehensive and authoritative coverage of news and current affairs, educational matters, programmes reflecting lives and concerns of different communities within the UK, etc. In addition, under section 265 Channels 3 (ITV), 4 and 5 are given public service remits, for 3 and 5 the provision of a range of high quality and diverse programming, for 4 programming which is also distinctive and demonstrates innovation and appeals to the tastes and interests of a culturally diverse society.
Enforcement of the remit is primarily a matter of self-regulation, or more accurately co-regulation, by the broadcasters themselves, who must publish annual statements of programme policy (following guidance from Ofcom) and to monitor their performance against it. If Ofcom considers that a broadcaster has failed either to meet its public service remit or to contribute adequately to the purposes of public service broadcasting as a whole, and if the failure is not excused by economic or market conditions, the regulator may give a direction to the broadcaster to remedy the failure and if necessary it may amend the broadcaster’s licence.
Ofcom has now issued the first stage of its review of public service broadcasting. Many had feared that it would adopt an over-economistic approach paying less regard to social purposes, given its role as an economic regulator of telecommunications as well as of broadcasting, and this is in part borne out by the review. Thus, although it has stressed the importance of public service broadcasting for citizenship, it has also pointed to serious problems of protecting public service values in the current broadcasting environment. The recommendations include moving away from detailed requirements on broadcasters to show particular types of programmes for a specified number of hours in order to increase their flexibility to respond to changing viewing patterns. Most controversially, it has also suggested that there should be competitive bidding for public service broadcasting funds, rather than the licence fee going entirely to the BBC. It concludes by suggesting that after the move to digital broadcasting is completed (probably around 2010), public intervention to secure public service broadcasting may not be justified on its present scale.

The Position of the BBC

There are other developments which may threaten the continued importance of public service broadcasting. A highly controversial issue has been that the BBC is not subject to Ofcom in relation to the achievement of its public service remit (although other matters such as unfair competition and fulfilment of quotas for independent and regional productions fall under the new regulator). Instead this continues to be a matter of self-regulation for the Board of Governors. However, the Board is under considerable pressure due to the effect of the Hutton Inquiry. As you probably know, this concerned the events surrounding the death of the Government scientist Dr David Kelly after the BBC had broadcast material to which the Government seriously objected and which the inquiry considered untrue, partly based on an interview with him. The report criticised the Governors as ‘they should have recognised more fully than they did that their duty to protect the independence of the BBC was not incompatible with giving proper consideration to whether there was validity in the Government’s complaints …’. As a result the Chairman of the Board of Governors and the Director-General of the BBC resigned. It seems unlikely that the present system of self-regulation will survive the Charter review.

Liberalisation of Media Ownership

The UK has always had strict rules limiting concentration of media ownership on a number of grounds. These included preventing market dominance for competition reasons, but also that protecting a plurality of different sources of news and other types of programmes is essential to a healthy democracy. These had taken a variety of forms. One was that non-EU or EEA persons or companies were not allowed to own a UK broadcaster. Another was that ITV was arranged as a system of regional companies, which came together to provide a common network but which retained links with their localities; thus multiple ownership of regional licences was restricted, though the restrictions were simplified in 1996 to prevent only holdings which exceeded 15% of all television broadcasting time (including broadcasting by the BBC), and this applied also to accumulation of satellite services. Further restrictions prevented extensive broadcasting involvement by press interests, again to maintain plurality of sources of information; thus a national newspaper proprietor with more than 20% of the market could not hold a licence for Channel 3 or 5, and further restrictions applied to the proprietors of local newspapers, though no restrictions applied on ownership of satellite services by newspaper interests.
This is changed by the 2003 Act. Firstly, it simply ended the restriction preventing ownership by individuals or companies outside the EEA, thereby opening up the possibility of takeovers of UK broadcasters by, for example, US media groups. Secondly, the restrictions on holding a number of ITV regional licences are ended, thereby opening up the prospect of it becoming a single national company; indeed, this has already happened so far as England and Wales are concerned through the merger of the existing companies. Finally, the Act permits a concern holding more than 20% of the newspaper market to control Channel 5, the smallest of the major broadcasters. This led to concerns about a takeover by Murdoch’s News International, already the dominant shareholder in BSkyB, although currently a merger of Channel 5 with Channel 4 is being discussed.
These changes proved highly controversial. The Government justified them as opening up the domestic media industry to new investment from overseas, as simplifying an over-complex system of rules and as reflecting the increasing number of media outlets facilitated by digital technology which had reduced the need for rules protecting pluralism. It was claimed by objectors that the lifting of ownership restrictions could result in the takeover of domestic companies by US conglomerates with limited local links and little understanding of the European culture of public service broadcasting. According to the Government, the controls described above on the content of public service broadcasting were adequate to control this. The Government did however accept that some special rules were necessary to guarantee that a sufficient number of media voices would be heard and to address concerns over editorial freedom. The most important criticisms were made by the influential joint Parliamentary Committee of both Houses on the Communications Bill, chaired by Lord Puttnam, the film producer. It proposed that the merger rules contained in the Enterprise Act 2002 be amended to include a new plurality test, permitting the minister to take action to prevent a merger which threatened media pluralism, this meaning the maintenance of a large number of media owners and voices with a commitment to impartial news and factual programming, a balanced and accurate presentation of news and the free expression of opinion. The Committee also recommended that the lifting of the nationality restrictions be postponed until Ofcom had reviewed the programme supply market and established itself as an authoritative regulator.
The initial response of the Government was strongly to oppose this proposal, however at a late stage in the House of Lords it was forced to accept an amendment which introduces a plurality test which applies to media mergers. This will allow reference by the minister of media mergers which raise pluralism issues to Ofcom which can report on whether the effect on pluralism is in the public interest. Its importance is however limited in that the role of Ofcom in this test is purely advisory; it is for the minister to decide whether to refer a proposed merger, and he is not bound by Ofcom’s advice. The lifting of the nationality restrictions was not postponed as the Committee had recommended.

Conclusions

It is clear that the Communications Act has made major changes to UK broadcasting. In one respect this may appear to be positive and supportive of public service broadcasting through providing a far-reaching definition of the purposes of such broadcasting for the first time. This is a definition which also goes far beyond a limited view of public service broadcasting as being restricted to correcting market failures which do not fully permit effective consumer choice, and which instead sees public service broadcasting as essential to full citizenship, through for example the references to cultural activity, fair and well-informed debate on news and current affairs, educational matters, reflecting the lives and interests of different communities, and so on.
However, the outlook may not be so positive for public service broadcasting because of some other aspects of the reforms. Firstly, the new regulator, whilst accepting that public service broadcasting is based on citizenship concerns, seems to have some doubt as to the potential value of public service broadcasting in the digital future, and has suggested mechanisms for allocating funding which, whilst apparently more economically rational, may seriously damage the BBC as the predominant supplier of public service broadcasting, achieved through an unrivalled body of established expertise. This is exacerbated by the weakened position of the BBC after its recent political difficulties.
Secondly, the lifting of the restrictions on media ownership may undermine the provisions of the Act which aim to protect public service broadcasting. The plurality test for media mergers is weak, and there is a danger both of increased concentration of ownership and of British commercial broadcasters becoming part of international conglomerates with little understanding of public service expectations. This is related to difficulties in enforcement. If, as is quite likely, broadcasters become part of larger international conglomerates, it is likely to become more difficult to enforce the public service remit, especially given the new stress on self-regulation and co-regulation. From what we have seen so far, Ofcom is likely to be reluctant to take formal enforcement action instead of relying on self-regulation, as the Act encourages, and indeed under the Act cannot do so where failure to meet a public service remit is excused by economic or market conditions, an excuse which could cover a multitude of sins.
Overall, then, the future of public service broadcasting contains considerable uncertainties in the UK currently. The BBC will certainly survive after Charter review, but the extent to which it will be permitted to enter new markets to maintain a large audience is unclear, as is the extent to which commercial broadcasters will be subject to the demanding public service obligations which have existed in the past.

Note

L'articolo Broadcasting reform in the UK<br> Presentation for Rome, May 2004 proviene da Giustamm.