Digital Economy Bill

Viscount Colville of Culross Excerpts

Committee: 2nd sitting (Hansard - continued): House of Lords
Thursday 2nd February 2017 Lords Chamber

[The Deputy Chairman of Committees (Baroness Garden of Frognal) (LD)]

I must advise the Committee that if Amendment 73 is agreed to, I cannot call Amendment 73A by reason of pre-emption.

[Viscount Colville of Culross (CB)]

My Lords, I declare an interest as a director and producer of television programmes for public service broadcasters. I have put my name to Amendments 73 and 235 because I want the public service broadcasters in this country to benefit as soon as possible from the repeal of Section 73. I also support Amendment 73A, which seems a very sensible use of any money the PSBs might garner. The question of whether there should be a transitional period after the repeal of Section 73 seems to revolve around the issues of whether underlying rights need to be worked out as part of the retransmission negotiations and whether it will take time to introduce a new structure for negotiating licensing arrangements between PSBs and cable providers.

At the moment, all channels, including the PSB channels, routinely buy the rights for “traditional” cable retransmission if they anticipate content being carried on cable, so rights should not be a problem. Therefore, any negotiations will focus on the licensing arrangements between the PSBs and the cable providers. As there is already a structure in place for the licensing arrangements of the PSBs’ non-core digital channels, this surely cannot be an excuse to put off the introduction of a similar framework for the core channels the moment Section 73 is repealed. I, too, am saddened by the extraordinary amounts of money that seem to be made by the streaming catch-up websites, such as TVCatchup and FilmOn. The litigation appears to suggest that millions of pounds has been made by these websites and therefore lost by the PSBs. The sooner we can stop that loophole, the better.

There is a genuine need to give extra financial support to the PSBs in this country. As the noble Lord, Lord Clement-Jones, said, they are the major customers for original UK content in all genres. They are threatened by the success of BSkyB and, in the BBC’s case, threatened with a 20% cut in funding as it takes on the burden of the concessionary TV licence fees. The noble Lord, Lord Clement-Jones, said that huge amounts of money would not be made by the repeal. However, the 2013 NERA report in the US noted that the free-to-air American broadcasters received $3.3 billion in retransmission payments, while the fees accounted for less than 3% of the cable operators’ cost. Therefore it seems that while UK PSBs will be able to raise extra money from new retransmission fees to invest in new content, the repeal will not have much impact on the price charged to the viewer. The removal of Clause 29(3) and the rapid introduction of the repeal of Section 73 will benefit both the PSB content providers and the creative industries across this country.

[Lord Black of Brentwood (Con)]

My Lords, I should like to say a few words in support of Amendments 73 and 235, to which I have added my name, and in doing so draw attention to my media interests as listed in the register. Like the noble Lord, Lord Clement-Jones, whose summary of the issues was excellent and which I wholeheartedly endorse, I warmly welcome Clause 29 and the Government’s decision to scrap Section 73, but I urge them to get on with it straightaway rather than having any form of transitional period, as time really is of the essence.

There is a good reason for that. No one can be in any doubt about the speed of change right across the media. A technological tsunami is overwhelming all those involved in content production, while the pace of development in the sector is relentless and punishing. It is the clear responsibility of any Government who believe in the creative economy—and this Government certainly do—to do all they can to support them through it, in this case by allowing the commercial television sector to invest more in world-class content. The question of retransmission fees is one where the Government can be a real help or, indeed, a real hindrance.

The legislation that is being repealed is nearly 30 years old. When it was put on the statute book, the fax machine was a technological novelty and there is simply no rationale for it continuing a day longer than it has to. Like the noble Lord, Lord Clement-Jones, I cannot see any reason for there to be a transitional regime, especially as all those involved have had fair warning of something which, as he said, we have been discussing since 2008. A further delay of up to two years is a lifetime in the creative industries and Section 73 is doing real harm now. If we are committed to a successful commercial public sector broadcasting industry and want to see investment in brilliant content, we should make sure that Section 73 goes as soon as the ink is dry on this legislation. Any law that is out of date and doing positive harm should go straightaway and not linger. It would be a real boost right across the whole of the UK’s creative economy and ensure that it gets an immediate benefit from this very important Bill.

Digital Economy Bill

Viscount Colville of Culross Excerpts

Committee: 4th sitting (Hansard): House of Lords
Wednesday 8th February 2017 Lords Chamber

That is the thrust of the amendments, and I beg to move.

[Viscount Colville of Culross (CB)]

I declare my interests in broadcasting as set out in the register. I support this group of amendments. I think it is about time that we seriously considered statutory underpinning to protect the independence of the BBC so that it can operate free from the influence of Ministers and other public authorities in the UK.

The last two charter negotiations have both ended up being a smash and grab by the Government on the BBC’s funding and independence. In my view, the negotiations for the 2017 charter have been the most egregious attack by Ministers in the history of the corporation. The new charter has been portrayed as a great victory that has not only saved the licence fee but also extracted an annual inflation-linked increase in the fee. However, the director-general and the strategy team at the BBC spent a great deal of the last three years constantly anticipating and fending off attacks by Ministers—surely a serious distraction at a time when public service broadcasting has been under unprecedented attack by satellite and internet rivals.

I particularly welcome the new clause that would be inserted by Amendment 218, which states that the BBC should be independent in all matters concerning,

“the content of its output, the times and manner in which its output is supplied”.

There is a groundswell of opinion among many politicians that the BBC needs to concentrate on content that cannot be provided by the market. Noble Lords have only to look at PBS in America to see that, although its programmes are very worthy and wholesome, they are watched by a tiny minority of the audience and are not really relevant to national discussion.

What was most extraordinary about the most recent negotiations for the charter was the level of interference attempted by the Government in BBC content provision. Your Lordships should know that the rumours in the press that the Government wanted to interfere not only in the content but even in the scheduling of BBC programmes were true. They wanted to force the BBC to move the “Ten O’Clock News” to another time. Surely that really is none of their business—even if many noble Lords who like to go to bed early might have appreciated the move.

I also welcome proposed subsections (3) and (4), safeguarding the BBC so that it can “exercise its functions” by providing,

“sufficient funds, through the licence fee and otherwise”.

“Otherwise” is an important word for me. As part of the charter negotiations the Government quite rightly demanded that the BBC find sources outside the licence fee to raise revenues. BBC Worldwide, the corporation’s sales arm, has been doing just that—and very well indeed. It promises to return over £1 billion to BBC content provision over the next five years.

As a former BBC programme maker myself, I know that the uplift from worldwide funding for a programme budget can transform its content. The extra money allows an increase in the number of days’ filming, the locations to be used and the ability to work with a craft film crew—all of which means that viewers can see the money on screen and have a better viewing experience. Yet in the last negotiations the Government very nearly managed to privatise BBC Worldwide. I believe that these proposed subsections would stop such a threat in future.

Many attempts to reduce the independence of the BBC were eventually successfully fought off this time round. But the existing charter mechanism allows similar interference by the Government in the BBC in the future. The risk of placing the future of the BBC on a statutory footing is that there are plenty of politicians from all parties who would like to do the corporation harm, or even to interfere directly in how and where the BBC spends its money. Amendments could be made by Peers and MPs which would atomise the BBC so that its content served their own interests or constituency, which would damage one of the great unifying institutions in our country.

However, if noble Lords look at Channel 4 and its statutory underpinning, they will see that it has made public ownership of that organisation more secure. Last year’s threat to privatise Channel 4 was only too real, but in the end it would have needed a very controversial Act of Parliament to carry out that threat. And what did we see? No such Bill was presented to Parliament, and Channel 4 remains in public hands. I am convinced that this group of amendments would give the BBC powerful protection from future government attacks on its independence. I urge the Minister to give them serious thought.

[Lord Gordon of Strathblane (Lab)]

My Lords, I cannot work up the same sort of enthusiasm for the statutory underpinning of the BBC. Although I deplore interference with the running of the BBC and the licence fee, and welcome the promises of better behaviour in future in the recent licence settlement, it seems to me that statutory underpinning creates a platform for statutory interference as well, which could be a lot more dangerous. Things are run quite well and we now have a royal charter that will last for 11 years. That gives us time to reflect on possible changes at some point in the next 11 years—but certainly not at the moment.

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This process would remove the licence fee process from the suspicion of undue political interference, ensure the licence fee is set with regard to what the charter demands, and introduce new transparency through the independent commission. It would be a significant change, but it would serve the interests of licence fee payers, the Government and the BBC at once. Like others, I am optimistic that the Government will share the principles that motivate this group of amendments: increasing transparency, operational independence, and credibility of the settlement. I therefore look forward to the Minister sharing the optimism that other noble Lords have expressed in his reply.

[Viscount Colville of Culross]

My Lords, I too add my voice to say that it is important that the BBC’s funding should be transparent and inclusive. I listened carefully to my noble friend Lord Best on his Amendment 220, which argues for Ofcom as a possible way of looking at this. However, I read Sharon White’s evidence to his committee, in which she said that she was already going to be fairly stretched with taking on the new regulatory powers and looking after the BBC. I also listened to the noble Lord, Lord Lester, and his concerns that it is rather odd to have a body that is both regulating the BBC and has the additional power to recommend the setting of licence fee levels. I rather prefer the suggestions made by the noble Lord, Lord Wood, for an independent commission which would make a recommendation to the Secretary of State.

Even if the Minister is not prepared to accept any of these amendments, serious thought needs to be given to the future process for funding the BBC. The constant arrival of new technologies means a shortfall in the number of licence fees being paid, and I doubt that the new digital licence fee is going to provide adequate compensation. The digital age is throwing up an extraordinary array of alternative funding models. An independent body should not only investigate the level of funding for the BBC but the manner in which the public contributes to that funding.

I urge the Minister to think very seriously about facilitating legislation which would enshrine the financial independence of the BBC. Without adequate funding, this great British institution will wither and may even become irrelevant to our national life.

[Lord Berkeley of Knighton (CB)]

My Lords, I will make one brief point as a broadcaster who works for the BBC. When we speak about transparency, I completely agree with what I heard about transparency from the point of view of the public. However, I make a plea for transparency from the point of view of the BBC over being able to budget. That means knowing in good time what it will get. More and more, we have heard about digital technology, and buying rights and planning broadcasts depends on knowing what kind of budget you are going to have. That is all I need to say, but I make a strong plea for giving the BBC the chance to know what it will have to spend, even if it is going down.

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[Lord Wigley]

My Lords, I am delighted to follow the noble Lord, Lord Low, and to support Amendment 226A, relating to public sector broadcasting prominence, about which I spoke during the Second Reading debate. This Bill presents an excellent opportunity to update prominence rules so that they work as they should in our digital world. Given the amenable response from the Minister on earlier amendments, I hope there will be an equally forthcoming response on this one.

The current legislation, from 2003, places a requirement for PSBs to have appropriate prominence to ensure that the flagship PSB channels, such as BBC1 and BBC2, are prominent on electronic programming guides. However, as I raised at Second Reading, the BBC’s children’s channels, referred to earlier, do not enjoy this prominence and sit below 12 commercial children’s channels on some electronic programming guides. As a former member of the S4C Authority, I know from experience that this is a particular issue for both S4C and BBC Alba. S4C is a vital service for hundreds of thousands of people in Wales who speak Welsh and who want to be able to watch programmes in their own language. This content must be easily available on electronic programming guides and—as I will touch on in a moment—on demand. I believe, quite simply, that PSB content must be prominent, whether it is “Y Gwyll”—an excellent Welsh detective drama series known outside Wales as “Hinterland”, which has been sold to almost 200 countries and shows what it is possible to achieve—or great children’s dramas such as “Wizards vs Aliens”, filmed at Roath Lock in Cardiff.

Perhaps a more recent issue, but nevertheless one which must also be tackled, is the need to modernise prominence rules to ensure that they cover on-demand services, such as catch-up TV and connected TV on-demand menus. As I raised at Second Reading, young people in particular are increasingly watching public service content this way and spending less time watching linear TV. At the same time, finding the iPlayer on connected and smart TVs is getting to be a longer and more arduous process, making it harder to watch programmes—including S4C. I am told that there are more than 100,000 requests for S4C programmes on iPlayer every week, showing just how popular this content is.

Both S4C and MG Alba have stated their support for extending prominence to cover on-demand and catch-up TV. They have issued a statement which I should like to quote:

“The extension of the PSB prominence principle to include the PSBs’ on-demand players is of great and growing importance. Its significance is not only for the future of public service media content and how it is consumed by the public, but it is also particularly vital for the availability of Welsh language content as S4C is the only Welsh language PSB available—serving Welsh speakers throughout the UK”.


It also has a considerable following in parts of the UK outside Wales.

Although this is certainly an incredibly technical area of legislation, I see it as another simple problem with a straightforward solution. Had smart TVs and the iPlayer been common when the original legislation was devised, I have no doubt that they would have been included at that stage. We now have an opportunity to do something about this and I hope that the Government will take it.

[Viscount Colville of Culross]

My Lords, I support Amendment 226A. This is an important attempt to future-proof the prominence of PSB channels on electronic programming guides, which is essential if we are going to bring younger audiences to PSB output. As Sharon White, the chief executive of Ofcom, said:

“Public service broadcasting continues to deliver TV that is enjoyed and valued by millions of viewers across the UK.


More people are watching online or on demand, and this presents challenges as well as opportunities for public service broadcasters. They must continue to find new ways of connecting with audiences, and the PSB system needs to evolve to ensure it remains effective in the digital age”.


The prominence of PSB online services has to be safeguarded in the face of what I see as a determined effort by commercial rivals and some manufacturers to downgrade them. These services need to be easily accessible to viewers and, as many other noble Lords have said, they are not covered by the Communications Act.

I draw your Lordships’ attention to two services provided by the BBC online which show how important it is that they should have prominence on any EPG in the future. BBC iPlayer has been an astonishing success, especially for younger viewers and listeners. In June 2016, there were 290 million requests for radio and television programmes to be downloaded—a 9% increase from the previous year. I know, from when I worked on “Horizon”, the BBC science strand, that the overnight ratings would almost double in the following months from people downloading the programme on iPlayer. At the moment, in some cases, it is hard to find this service on the EPGs.

We also have no idea what other on-demand channels will be launched in future by the PSBs. An example of what these might include is the service that is being mooted by the BBC, which it hopes to be able to launch in 18 months’ time, called BBC Ideas. It will bring together the BBC’s output across all platforms—radio, television and online—in arts, culture, science and history. It will place them alongside interesting new ideas from partners in leading arts, science and cultural institutions. The hope is that the audience will have their minds stretched and even thrilled by the interchange of ideas in a place where art meets medical science or where history meets theatrical performance. As things stand, there are many smart TVs and set-top boxes which will not give prominence to services such as these. In some cases, this is because the platform providers are also the content providers. I am sure that in the fast-growing area of smart televisions there will be relationships between television manufacturers and content providers which will favour the latter.

If public money is being spent on PSB online content provision, we have a duty to ensure that, in future, viewers should be able to access this content easily. I urge the Minister to accept this amendment.

[Baroness Benjamin (LD)]

My Lords, I support this amendment. I too am concerned that it is becoming more and more difficult to find BBC programmes on new, connected televisions, particularly, as we have heard, programmes for children. On one new platform, it takes 22 clicks on the remote to get to the home screen of CBBC. Parents know that BBC content for children is both high quality and educational but, worryingly, it is not easy to find on many platforms and televisions, especially for new parents. I agree with other noble Lords that the legislation is out of date. On one platform, CBBC and CBeebies, broadcasting UK-produced content, are buried beneath 14 commercial children’s channels in the guide. Many of these show American content. I hope that the Minister will commit to updating the legislation to ensure that children’s BBC content is prominent on all platforms.

Digital Economy Bill

Viscount Colville of Culross Excerpts

Report: 1st sitting: House of Lords
Wednesday 22nd February 2017 Lords Chamber

[Lord Clement-Jones]

My Lords, I hope this will be a short debate. I was pleased to see the Government’s response to the technical consultation on transitional arrangements, which in a sense is a quick response to the spirit behind Amendments 21 and 29, which I tabled in Committee. It is another pleasing and welcome indication of the speed with which the Government are responding to some of the arguments being made, such as the call for evidence on IPTV.

An unequivocal statement has been made, which I very much hope the Minister will repeat, to the effect that on the basis of the responses to this consultation, the Government have decided to repeal Section 73 without a transition period. I am assuming that if I get such a pledge from the Government, it will be upheld, and that there is no need to amend the Bill to that effect, but obviously I would very much like those assurances from the Government at this stage.

On the right to equitable remuneration where a creator has transferred his or her cable retransmission rights to a broadcaster, the concern is that if public service broadcasters are going to receive licensing income for carriage of their services on cable networks, those underlying rights holders—such as scriptwriters and directors—should receive an appropriate share of this new revenue. The Government in their new Clause 30 have made clear what happens to performing rights, because they deleted old paragraph 19 of Schedule 2 to the Copyright, Designs and Patent Act 1988. It has not, however, been made absolutely clear what the score is as far as the copyright of creators such as authors is concerned. I do not know whether the IPO has been able to give Ministers guidance on that. However, this is a probing amendment, and I very much hope that the Minister will be able to explain what is contemplated.

The problem is that where creators assigned their rights, that was in the old days. There may be licences in respect of which public service broadcasters attributed a zero value to retransmission rights, but of course, in future, those rights will not necessarily have a zero value. I therefore hope that the Minister can at least give some assurance that this issue is being looked at, and that at least some guidance or encouragement can be given to public service broadcasters to look again, in all equity, at some of their past rights clearances, so that creators will not be disadvantaged in the income they receive from what could be a new income stream for our public service broadcasters. I beg to move.

[Viscount Colville of Culross (CB)]

My Lords, I voice my admiration for the noble Lord, Lord Clement-Jones, and his dogged determination to get Section 73 of the copyright Act repealed, and I am grateful to the Government for including its repeal in the Bill. Their response to the technical consultation seems to mean that it will be repealed immediately, but I too would like the Minister to assure us that it will be.

[Baroness Buscombe]

In Committee, and again here today, noble Lords have expressed their desire to see a swift repeal of Section 73. As I set out in Committee, the Government, through the Intellectual Property Office, have consulted on the technical aspects of the repeal, including on the question of a transition period, and committed to returning to this issue on Report following the publication of the government response to the consultation. The IPO published the Government’s response to the technical consultation on 10 February. In summary, the responses did not see the need for creating a new rights clearance mechanism and were in favour of no or a very short transition period in connection with the repeal of Section 73. The Government agree with that view.

I therefore confirm to the House that Section 73 will be repealed without a transitional period and that no compulsory structure for licensing needs to be introduced. In coming to the decision not to have a transition period, the Government considered that the intention to repeal Section 73 was announced in summer 2015. The industry has therefore had plenty of time to prepare for the repeal. There is also the ongoing and pressing issue of online service providers continuing to rely on the Section 73 exception to permit the streaming of PSB content over the internet without seeking the necessary permissions or paying any licence fees. This can impact not only the copyright owners in the broadcast but the underlying copyright owners in the content carried within the broadcast itself. The Government regarded the resulting financial loss to the affected parties as an important driver for a swift repeal. The repeal will become effective on a date to be appointed by statutory instrument after Royal Assent is received for the Bill. I confirm that the Government will commence repeal without delay before the Summer Recess.

On Amendment 21, the IPO consultation also looked into the position of underlying rights holders in PSB content, such as musicians and scriptwriters, and whether new rights clearance mechanisms needed to be introduced. It concluded that there are already extensive commercial rights agreements in place between underlying rights holders, broadcasters and the platforms, and that these will be capable of factoring in the new rights, which will be reactivated following the repeal of Section 73.

Underlying rights holders already contract, on terms acceptable to them, with broadcasters and platforms in respect of rights that are not currently exempted by Section 73, such as underlying rights in non-PSB content and in programmes transmitted on all other non-cable platforms. As such, we do not think that statutory intervention in the manner proposed in the amendment is necessary.

In response to the question put by the noble Lord, Lord Clement-Jones, I want to make it clear that underlying rights holders already have in place rights agreements with broadcasters. Section 73 only ever applied to cable networks, so the value of underlying rights will have been factored in for transmission on all platforms.

I hope this explanation has assured the noble Lords that the purpose behind their amendment has been met. I therefore ask them to withdraw the amendment.

Digital Economy Bill

Viscount Colville of Culross Excerpts

Report: 3rd sitting (Hansard): House of Lords
Wednesday 29th March 2017 Lords Chamber

[Viscount Colville of Culross (CB)]

My Lords, my media interests can be found in the register. As many other noble Lords have said, it seems to me that the run-up to the next licence fee deal must be the time to take politics out of the corporation’s funding arrangements. This amendment is very welcome in creating a body that will do just that. The criticism of similar sorts of bodies is that they have been ignored by successive Ministers. However, the noble Lord, Lord Best, has dealt with this by recommending that the proposed commission should be considered by the Secretary of State, who should then explain his reasons if he is going to ignore it. That would provide a gold standard against which the public and politicians can measure any discussions and subsequent spin on the BBC’s funding settlement. I ask the Minister to consider the idea very favourably.

As regards Amendment 32E, I add my admiration for the tenacity of the noble Lord, Lord Lester, in trying to put the BBC on a more independent footing. In Committee, I spoke in favour of statutory underpinning for the BBC. As the noble Lord said, this amendment is a watered-down version of that discussion. I understand that it will not be put to a vote but I hope that it will stir the Government to start a debate to free the corporation from ministerial diktat. That debate must involve all the stakeholders. I hope that the result will guarantee the corporation’s future. Its position as one of the most effective public service broadcasters in the world has never been more important at a time when “fake news” threatens to suffocate the truth.

[Lord Berkeley of Knighton (CB)]

My Lords, in supporting my noble friend Lord Best, I point out that the reprehensible situation in which we found ourselves the last time that the licence fee was discussed discredited not only the Government but managed to discredit the BBC as it put the director-general in a very difficult position for which he received a great deal of criticism. Nobody came out of that process very well. We must be able to find a better system that is more transparent and gives the BBC the possibility to plan ahead, but it has to be one that is fair to all parties.

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[Baroness Bonham-Carter of Yarnbury]

I support this important amendment. In Committee, the Minister rejected the need for change. He said,

“we have not seen compelling evidence of harm to PSBs to date”.—[Official Report, 8/2/17; col. 1783.]

“To date”: key words. What is needed is for them to be made up to date, to ensure that public service content will continue to be available and easy to find in whatever way it is viewed in a future-proofed way. The current rules on the prominence of PSBs have not kept pace with technological and market development. I shall be very brief because, as usual, the noble Lord, Lord Wood, has said all that I was going to say, and I do not want to be a parrot. The impact of PSB depends not just on producing high-quality, distinctive UK content but on providing easy access for people to consume it. It is still the case, as mentioned by the noble Viscount, Lord Colville, that the main and most trusted source of news is on TV. Given the rise of fake news, PSB content—impartial, well regulated, fact based—is more important than ever.

Prominence is one of the few sources of regulatory benefit to PSB providers, and we believe that in an increasingly complicated and fragmented digital world, its importance increases. As viewing habits change, reform is critical to preserve PSB in a digital age and sustain the creative powerhouse and global success that is UK broadcasting.

[Viscount Colville of Culross]

My Lords, I have added my name to the amendment because it is important to future-proof the prominence on the EPG of our public service broadcasters at a time, as the noble Lord, Lord Wood, said, of extraordinary change in the media.

In Committee, the Minister said that anybody could find the PSB digitally connected channels if they wanted to: the channels’ very success showed that they did not need any boost to their prominence. However, one of the aims of the amendment is to push back on BSkyB’s unique position in our media environment of being both a content provider and, via its satellite and broadcast services, a distributor. This means that it is in its interest to ensure that its content is more easily accessible than other companies’ content. As the noble Lord, Lord Wood, said, on many of the new Sky boxes, its content is made as prominent as possible, while making the PSB channels—in particular the BBC’s children’s channels—more difficult to find. After the great success of the amendment of the noble Baroness, Lady Benjamin, we should do everything we can to encourage access to PSB children’s channels.

The Minister said that children can easily find their way around the channel controller—we all know how adept children are with technology—but I hope that he is not suggesting that children are given free rein with the channel controller to access anything they want. It needs to be carefully controlled and, I thought, given top prominence.

It is also clear from research by BARB, the audience research company, that prominence—or lack of it—affects consumption of programs. A like-for-like comparison shows that CBeebies secures a lower target audience share on Sky, at 28%, where it is more difficult to find, than on Virgin, at 33%, where it is listed in the top three children’s channels.

I also understand that some noble Lords believe that an unintended consequence of the amendment will be to stop the prominence of the existing linear PSB channels: BBC1, BBC2, ITV and Channel 4. I assure noble Lords that this will not be the case. In subsection (3), the amendment confirms Ofcom’s power to review the main linear channels and extends it to the new connected, or internet, channels. In subsection (8), it further strengthens Ofcom’s power of review by omitting “such degree of” appropriate prominence. It simplifies and strengthens the duty on Ofcom to secure prominence, which will apply to both the main PSB channels on EPGs and the new PSB internet channels. It therefore gives Ofcom more rather than less scope to require prominence for all PSB services within the EPG.

Surely your Lordships’ House will want to ensure a balanced broadcasting environment with a wide range of content on offer. I ask the Minister why he would not want to allow Ofcom, our world-class media regulator, to review this issue.

Digital Economy Bill

Viscount Colville of Culross Excerpts

Report: 3rd sitting (Hansard - continued): House of Lords
Wednesday 29th March 2017 Lords Chamber

[Lord Crickhowell (Con)]

My Lords, I have not taken any part in the debates on this Bill, but in view of the fact that a speech I delivered 14 years ago and which I had entirely forgotten has been quoted at some length today, I hope I may be allowed to say that, on having reread it, I am rather proud of it and stand by every single word I said on that occasion. For that reason, I wholly support the general principles being advanced by my noble friend Lord Lansley and others who support the amendment. If it cannot be accepted tonight, I hope the Minister will at least indicate that the Government will follow this up with some very serious consideration indeed of the principles being advanced.

[Viscount Colville of Culross (CB)]

I too rise to support these very well-crafted amendments, particularly Amendments 33J and 33L, which are crucial in ensuring that Ofcom’s fit and proper test is extended to not just existing licence holders but prospective ones.

The amendments come as the proposed 21st Century Fox merger with BSkyB goes for the Ofcom fit and proper review. At the moment, I fear that the regulator can look only at the present situation, with Fox holding a 39% stake in BSkyB. Surely, that test should concentrate on what would happen if the merger went ahead and Fox took 100% control of BSkyB. Such a test would look at the assessment of James Murdoch. I refer your Lordships to the 2012 Ofcom report on “fit and proper assessment of Sky”. It said:

“In our view, James Murdoch’s conduct in relation to events at NGN repeatedly fell short of the exercise of responsibility to be expected of him as CEO and chairman”.


At the time, Murdoch was not chairman of BSkyB, merely a non-executive director, and therefore junior enough for Ofcom to conclude that the finding did not affect BSkyB as a fit and proper licence holder. But last year, he was appointed chairman of BSkyB. The prospective merger with 21st Century Fox would give him massively increased power, with the full backing of a 21st Century Fox-appointed board. Ofcom surely should have the power to investigate what would happen in mergers such as these.

I am also concerned by developments with the federal grand jury sitting in Manhattan which is investigating the business practices of Fox News and claims by the Attorney’s Office that Fox News violated securities laws by not reporting to the Securities and Exchange Commission a series of massive settlements to employees. If Fox News is found guilty, there will be an American investigation into whether it is fit to hold a broadcasting licence. I ask the Minister, would it not be strange if the UK Government went ahead and granted 21st Century Fox a merger with BSkyB in this country, at a time when the sword of Damocles hangs over Fox News in America?

I look forward to the Minister reassuring me on these matters.

Digital Economy Bill

Viscount Colville of Culross Excerpts

Ping Pong (Hansard): House of Lords
Thursday 27th April 2017 Lords Chamber

[Lord Lester of Herne Hill (LD)]

My Lords, about a year ago I introduced a Private Member’s Bill that was too low in the ballot to have any chance of being debated or passed. When that became evident, I decided instead to use this Bill as a vehicle to protect the independence and funding of the BBC. As the Minister will, I am afraid, recall painfully, we debated these issues as a result throughout most of the last year.

The first problem that we debated was whether it was proper to have legislation and a charter. The Government originally took the position that they were inconsistent. I am grateful that eventually, having listened to the authority of the noble Lords, Lord Inglewood, Lord Fowler—while he was a free man—and Lord Best, about how a charter is nothing more than what Ministers desire and is not like legislation, the Government eventually concluded that there was nothing incompatible between having a charter and statutory underpinning, too.

The next question was why any statutory underpinning is needed. The answer, if you read the current charter, is that there is no obligation in it upon the Government to provide sufficient funding or even to respect the independence of the BBC. I made it clear before the Bill left the House for the other place that I was not wedded to any particular solution to the problem of ensuring that the Government would provide sufficient funding and respect the independence of the BBC, and would do anything in their power to secure that. As the noble Lord, Lord Best, indicated, one way this House expressed our view was by adopting his rather more moderate approach than mine. His commission would not bind the Government to anything in particular other than to consider the outcome of the review commission. My approach would create an obligation upon the Government as regards funding and a prohibition against top-slicing, the transfer to the BBC of matters that were the obligation of the Department for Work and Pensions, to ensure that that never happened again.

As I understand it, we are now in a position, before we finally approve this Motion, where the Government do not accept any obligations on them with regard to the sufficiency of funding or respecting the independence of the BBC. I asked this of the Minister the last time and he could not answer. I ask him this time please to assure the House that the Government accept that there is an obligation to provide sufficient funds to the BBC, whether through the licence fee or otherwise, to ensure that it can fulfil the public purposes as an independent public service broadcaster that are enunciated in the charter. Do they also accept the obligation to ensure that the independence of the BBC is guaranteed and that there will be no further raids upon it through top-slicing? If the Minister can give those assurances today, I will not feel that I have wasted the best part of the last year in these debates. If he cannot do so—I very much hope that he will—I am afraid that I will have to bring in another Private Member’s Bill at the ballot.

[Viscount Colville of Culross (CB)]

I regret that the Government decided not to accept Lords Amendment 242. The Minister in the other place said in his speech yesterday that the technology of broadcasting and internet-based on-demand viewing are completely different. I am afraid that that is not right. The two technologies are merging as television sets become multipurpose computers. We are seeing convergence between television and the internet increasing at a massively rapid pace. It is crucial that the prominence regime should keep pace with changing viewing habits.

However, the response from the other place gives me some heart. At least there is to be an Ofcom review of the PSB prominence guidelines in the internet age. I urge the Minister to ensure that Ofcom starts that review as soon as possible and not allow it to put that off until 2020. Every month, we see PSB on demand and digital services become more important for broadcasters. I am sure that your Lordships would like viewers to have easy access to programmes that in the BBC’s case are funded by public money and in Channel Four’s case are publicly owned.

[Lord Clement-Jones]

My Lords, I very much hope that the Minister will take the threat from my noble friend Lord Lester extremely seriously and will rise to the challenges that he put to the Minister on the questions of funding, independence and carrying out the activities of the BBC.

I agree in particular with the noble Lord, Lord Best, in his disappointment with the Minister’s Motion today. As the noble Lord mentioned, my noble friend Lady Bonham-Carter added her name to what we saw as a very important amendment in this House. That was the product of the report of the Communications Select Committee, Reith Not Revolution, which urged a much greater level of transparency and independent oversight in the setting of the licence fee. Of course, the Minister pushed back in Committee, on Report and at Third Reading by talking about the licence fee being a tax. However, it is a rather exceptional one: a hypothecated tax paid by the public to fund the BBC. So it is entirely correct that there should be a different mechanism for the setting of that licence fee. This arises because of the midnight raids—the hijacking—by the Treasury of the licence fee process on at least two occasions recently. One of the worrying phrases that the Minister used was that the Government want a free hand following negotiations with the BBC. That is exactly what the original amendment was designed to prevent.

The nub of the concern is about assurances. The Minister gave assurances and used new language on this. However, we have seen what assurances given by the Government are worth when it comes to snap elections. Assurances can be given by government one minute and broken the next. However carefully we scrutinise the Minister’s wording today, if his Government are in a position in future to negotiate the licence fee, we have no absolute assurance that those words will be followed. I share the deep disappointment that I am sure is felt all around the House.

In many ways, Motion E is even more disappointing. It was perfectly valid for the noble Viscount, Lord Colville, to express some support for the Ofcom review, but given that the Government could say that whether or not to have a BBC licence fee commission is a political decision, this is much more a question of the facts and perception. On at least two occasions we have had Secretaries of State for Culture, Media and Sport—Jeremy Hunt and Maria Miller—saying that the position of the public service broadcasters is very important and EPG position is a very important way of safeguarding it. The Minister has said that a review will be undertaken by Ofcom, but Ofcom already knows that there is a problem. It recommended in its 2015 PSB review that policymakers should reform the rules for on-demand. Why are we asking Ofcom to do the work all over again? That does not seem a particularly constructive way forward, despite appearances.

A number of questions arise from Motion E. Can the Minister confirm that statutory change will be necessary to bring on-demand PSB content and the connected EPGs, where they are found, into the scope of Ofcom’s EPG code? In conversations, the Minister has claimed that it is not possible to have a Henry VIII power that would implement Ofcom’s recommendations for on-demand, so I assume that there is no current statutory power and that therefore we would be talking about primary legislation in that respect, but it would be helpful to have that confirmation.

Will the Minister give us an assurance that the Government will act on those Ofcom recommendations? We would not have tabled amendments on EPGs unless we thought that this was a real and present issue that needed to be tackled. This was not a frivolous amendment, but the Government seem to have a completely different view. The earnest of their intentions on this provision is rather important. The amendment sets a 1 December 2020 statutory deadline for the review and the revision of the EPG code, but does the Minister not agree that actually it would be desirable to commence work rather earlier, given the need for statutory changes beforehand, probably, to bring on-demand content into scope?

Finally, it appears that there is a statutory power to ensure the prominence of PSB children’s channels on EPGs. Does the Minister agree with that? Does he agree that if Ofcom so recommends, that could be brought in at a much earlier date than the on-demand provision? I very much hope that the Minister can answer those questions.