Digital Economy Bill

Baroness Bonham-Carter of Yarnbury Excerpts

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

[Lord Birt]

My Lords, I support the drift of the amendment of the noble Lord, Lord Best; I think that we need a proper, open, rigorous and transparent means of setting the level of the licence fee.

A little bit of history is that we did have a commission in the late 1990s, when the then Government appointed Gavyn Davies, a very distinguished economist and later chairman of the BBC, to do just that. As you would expect, he produced a searching, rigorous report. A further little bit of history is that he made a recommendation, and the Secretary of State, as you expect in politics, lowered the recommendation; as you do not expect, it went to No. 10, and the then Prime Minister not only upped his Secretary of State but recommended a level for the licence fee which was higher than that which Gavyn Davies recommended. It was the famous RPI plus 1.5% for seven years settlement, which allowed the BBC fully to enter the digital age. It was the process that Gavyn Davies led that enabled the Prime Minister to make a considered judgment.

However it is done, that body needs to look at the total environment. The most important issue in British broadcasting today, barely discussed at all, is the long-term decline of UK production. It is not going up; it is going down. It is going down because of the economic position of ITV and Channel 4. Any discussion of the level of the licence fee should look not only at the BBC but at the totality of the broadcasting production environment in the UK.

Some suggest that the licence fee should be linked to the RPI. There can, from time to time, be good reasons for that. I think that, strategically, it should be linked to GDP. The BBC performs a fundamental role in society, like the Armed Forces. We have a view of GDP and the investment we should make in the rest of the world; we should have a view in relation to GDP of how much we invest in our most important public service broadcaster. When GDP is stretched, as it has been over the past 10 years—though, thankfully, it is going up again—and if the country’s economy is suffering a reverse, then the BBC’s revenues should go down. If the country is prospering, so should the BBC—so should society’s investment in its most important public service broadcaster.

[Baroness Bonham-Carter of Yarnbury (LD)]

I add my support to these amendments and also pay my respect to the noble Lord, Lord Best, who so ably chaired the Communications Committee, of which I was a member, and produced this report. As everyone in this debate has said, a greater level of transparency must be introduced into the setting of the licence fee. Never again can there be backroom deals.

What these amendments seek to achieve is that in future there will be clarity and public scrutiny. The public, after all, pay the licence fees. These are moderate proposals which will rightly leave an elected Government with the final say in determining the BBC’s revenue, but introduce an important element of accountability into the process, which is surely appropriate for such a vital national institution. There is obviously room for debate as to which body oversees this process, but I hope that the noble Lord agrees that there should be a more open and transparent process.

[Lord Gordon of Strathblane]

My Lords, I was a member of that licence fee commission under Gavyn Davies in 1998. It may interest the House to know that we had a subcommittee under the late Lord Newton looking at the issue of possibly funding a licence fee for over-75s and making it free. The unanimous conclusion of the committee was that that was a very bad idea and wholly inappropriate for the BBC.

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[Baroness Bonham-Carter of Yarnbury]

My Lords, I put my name to this very important amendment. The noble Lord, Lord Wood, has said most of what I was going to say, so I will be brief, but I add that we live in such a rapidly changing world, in which the existence and preservation of public service broadcasting is ever more crucial.

As the noble Lord, Lord Gordon, mentioned, we were at a breakfast yesterday hosted by Channel 4. The topic for discussion was fake news—a frightening phenomenon that threatens to undermine democracy as we know it and to distort people’s understanding of the world. It is still the case that the main source of news, and the most trusted, is TV. Given the rise of fake news, PSB content—impartial, well regulated and fact based—is more important than ever.

Alongside being universally available, what is crucial is that PSBs are easy to find. As the noble Lord, Lord Wood, said, this is increasingly difficult—the number of clicks you need to get to BBC Alba is, I believe, 15 on Sky Q. Then there is the specific matter of children—children’s content lurks below numerous foreign cartoon programmes.

Change is needed. Ofcom and the Lords’ Communications Committee have argued it and these amendments provide it. Will the Minister not agree that the Bill offers the opportunity—dare I say an historic one—to ensure changes that are essential if public service broadcasting is to survive, in a time in our history when its survival is more important than ever?

[Lord Low of Dalston (CB)]

My Lords, I put my name to this amendment, so I shall speak briefly in support of it. It simply seeks to modernise the prominence regime for our digital age, expanding the existing legislation to cover on-demand services, such as catch- up television, on-demand TV menus and electronic programme guides.

At Second Reading, I shared my own and others’ experience of how frustrating electronic programme guides and user interfaces can be. Navigating them and finding a particular channel can be a particular challenge for people with a sensory impairment. Finding BBC News on electronic programme guides or finding the iPlayer on smart and connected televisions can take a considerable time. Likewise, finding BBC Parliament to allow people to take in your Lordships’ proceedings can be quite difficult—I am assured that people do still attempt to do this.

The Commercial Broadcasters Association has argued that giving public service broadcasting children’s channels extra prominence would create problems for investment in UK children’s content by their members. Moving public service broadcasting channels to higher electronic programme guide positions would mean displacing commercial broadcasting channels, with a detrimental impact on audience share and revenues. This, they say, would ultimately damage investment in children’s content. However, I am advised that greater prominence for public service broadcasters’ channels has a cross-promotional value which ultimately redounds also to the benefit of commercial channels. As I see it, there is no real threat to commercial broadcasters from this amendment.

This is a straightforward amendment which simply seeks to update the letter of the legislation for an increasingly digital age and bring it in line with the spirit in which it was originally conceived. I trust that the Government will see their way to accepting it.

Digital Economy Bill

Baroness Bonham-Carter of Yarnbury Excerpts

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

[Baroness Bonham-Carter of Yarnbury (LD)]

My Lords, I support my noble friend Lady Benjamin. It is clearly of paramount importance that our children have access to British-made television content. As I mentioned before when talking about the electronic programme guide—and I am afraid the Minister will have to appreciate that the issue is not going away—easy access is important. As my noble friend said, children need to see programmes that reflect their lives and our diverse, vibrant nation. It is my experience that children do actually watch television, certainly the ones I know. That is one reason why they love their step-grandmother, because she encourages it. Importantly, as my noble friend mentioned, flexibility is built into this amendment. It includes consultation with Ofcom about how it should be implemented in practice and around genres. It is important that this sector is not just left for the BBC to carry.

The Minister recently responded to a Liberal Democrat debate on the importance of the creative industries. That is another reason why the children’s independent television sector should be encouraged. We have only to look at the Harry Potter films to see what the children’s market can contribute to our economy and to Britain’s soft power. Let us support this sector and unlock its great potential and, in particular, not break my noble friend’s heart.

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I want with all my heart to believe that the Prime Minister believed what she said that day and that she and her colleagues in government are prepared to live by it. When she used the words “you” and “yours”, I assumed that she meant the public—those citizens referred to on the very first line of Ofcom’s duties. By accepting these amendments—or, far better still, coming back with wording that clarifies while offering the same intent—the Government will prove that, where media ownership is concerned, they have no intention of following the dismal example of so many of their predecessors, including, I am sad to say, the Government of whom I played a very small part, who entrenched the advantages of the fortunate few. Should they fail to do so, they will have fallen at the very first hurdle they set themselves, and possibly never recover the public’s trust. I beg to move.

[Baroness Bonham-Carter of Yarnbury]

My Lords, my name is also attached to these amendments, and I support the noble Lord, Lord Puttnam. They add the necessary extra scrutiny needed for media mergers and ensure that Ofcom’s fit and proper test is effectively applied.

These amendments specify further grounds for the Secretary of State to refer media mergers to Ofcom. As the noble Lord, Lord Puttnam, mentioned, the existing plurality safeguards are no longer adequate. They do not deal with market dominance and they are not sufficient for protecting editorial independence of media outlets. It is vital for the media environment that no company possesses disproportionate power to influence public opinion or the political and policy-making process. Plurality safeguards are an essential part of protecting the public and decision-makers from media organisations which are allowed to expand without proper scrutiny.

Then there is the matter of Ofcom’s fit and proper test. As many noble Lords will know, Ofcom must supply a test of fitness and propriety to owners of broadcast licences. At the moment, this test is not spelled out. What we propose would add definition to the test, using the recommendations of Leveson 2. Taking the current Sky-Fox bid as an example, I believe that this would ensure that the present chief executive of 21st Century Fox, James Murdoch, would undergo proper scrutiny if he were to retain a senior position at Sky.

I echo the noble Lord, Lord Puttnam, in one of the letters to which he referred. How we deal with the concentration of power decides the kind of country we are. I, too, understood that that is what Theresa May said when she became Prime Minister. Now it is for her Government to follow the logic, evidence and facts, and accept these amendments. They do not bind the Government; they simply strengthen the merger and plurality regime already in place. They put appropriate and proportionate power in the hands of an independent regulator, Ofcom, in order to protect the interests of citizens and consumers.

To quote my friend, Sir Vince Cable:

“The public interest centres on plurality and fitness”.


These are beneficial proposals which have been carefully agreed through cross-party consideration. I hope that the Minister will recognise this and respond positively.

[Baroness O'Neill of Bengarve (CB)]

My Lords, I support this amendment. I remember well—and the noble Lord, Lord Puttnam has reminded us of it—that, in 2003, we had quite dramatic discussions in your Lordships’ House about the dual duties of Ofcom to the citizen and to the consumer. There was a bit of a wobble after Ofcom was set up, but since then it has properly seen itself as defending these two separate interests and not, as was initially suggested, merging them into the interests of a fictitious character called the citizen-consumer. That was an unfortunate, but brief, episode.

I believe the noble Lord, Lord Puttnam, hit the nail on the head when he said that this pair of amendments is highly congruent with the Government’s policy. Not merely has the Prime Minister spoken about acting in the interests of “you rather than the few”, she has also started to refer to “issues of corporate governance”. This is basically what this is about—the standards that we think are relevant in corporate governance.

This has been a very unhappy decade in which there have been failures of corporate governance in many sectors. I am a member of the Banking Standards Board, looking at the culture of the banks. I read every day about this culture and realise how vital is the requirement that only those who have passed fit and proper person tests come into positions of leadership and influence in the banking sector. I realise how important this also is for the media sector—indeed, it is perhaps more important.

As we have seen clearly in the last few weeks, with the presidential campaign in the United States, the media have changed hugely in this decade. We can get spiralling misinformation that is extremely difficult to stem once it gets a hold in social media; once it spreads with the rapidity which the greediest of proprietors could never have imagined. In this world, more than ever, serious corporate governance has to take account of the ethics, as well as the law, of the fitness and propriety of leadership, as well as the adequacy of regulation. I support the proposal that Ofcom get a clear grip on the fitness and propriety of those who lead the broadcasting industries.

Digital Economy Bill

Baroness Bonham-Carter of Yarnbury Excerpts

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

[Lord Inglewood (Con)]

I refer briefly to our previous debate when the House was considering the Bill, when I raised my concern about the independence of the BBC and its relationship with the Government of the day, because there must be a relationship and it is important that it is both transparent and rules-based. That is why I have added my name to a number of the amendments; I do not want to elaborate further than that to explain clearly why I have done so.

I also owe an apology to my noble friend, because on that occasion I referred to the Government as behaving like Dick Turpin in respect of the licence fee. He picked me up on that point and said he thought that it was very wrong because a lot of money was being given back, so I apologise for suggesting that; instead, I should have said Robin Hood.

[Baroness Bonham-Carter of Yarnbury (LD)]

I support the amendments. As I mentioned in Committee, I am a Member of the House of Lords Communications Committee, so ably chaired by the noble Lord, Lord Best, and I stand by our report, Reith not Revolution, although I accept the slight change in who should oversee the setting of the licence fee, as the noble Lord, Lord Best, mentioned.

The Minister referred more than once in Committee to the licence fee as a tax. As the noble Lord, Lord Best, said, it is a hypothecated tax, paid by the public to fund the BBC. As such, it is surely correct that in future there is clarity and public scrutiny and no more midnight raids, and that the licence fee is used to fund the BBC’s functions and public services, not those of the Government. These proposals would, rightly, leave an elected Government with the final say in determining the BBC’s revenue but would introduce an important element of accountability in the process, which is surely appropriate.

[Lord Pannick (CB)]

I have added my name to Amendment 32E from the noble Lord, Lord Lester, and I agree with all the speeches that have been made in this debate. The process for setting the licence fee is manifestly inadequate; it lacks transparency, fails to identify—far less promote—any coherent principle, and allows and indeed encourages a last-minute political fix. Does the Minister really think that this is a satisfactory means of promoting the independence and efficacy of the BBC?

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[Lord Wood of Anfield]

My Lords, Amendment 33ZG has a simple purpose: to ensure that high-quality public service broadcasting content, paid for by licence fee payers, continues to be accessible and prominent to viewers as viewing habits change. PSB programming is not only a staple of cultural life in our country but one of the jewels of our world-leading creative industries. A crucial component of the regime surrounding PSB is the regulations to ensure that these programmes are widely available and easy to find. The current rules, established over a decade ago in a code of practice, ensure this by requiring that the main PSB channels—BBC1, BBC2, ITV1, Channel 4 and Channel 5—appear at the top of channel listings or electronic programme guides, EPGs, on all TV platforms. The code works well for traditional TV viewing, where it is watched in real time, but we live in a world in which viewing habits are rapidly changing and the platforms for providing programmes to viewers are multiplying and diversifying.

In the past decade, digital channels have proliferated, and viewing habits have moved on towards on-demand and online viewing. Three-quarters of adults now watch programmes through catch-up services, and about 16% of all programme watching is now time shifted rather than in real time. The problem is that in the face of this behavioural and technological change, it is becoming much harder to find the PSB content that viewers both like and pay for. On-demand players such as BBC iPlayer and All 4 are outside the scope of the prominence rules. New means for accessing these programmes apart from traditional channel listings, such as menus for catch-up and on-demand TV, are also not covered by the rules. In newer TV platforms, the prominence of PSB channels is being marginalised by new graphics and menus. On the new Sky box, Sky Q, you are greeted, when you turn your telly on, by a large box advertising top picks chosen by Sky, more than three-quarters of which is content broadcast by Sky channels.

What is the result of this failure of regulation surrounding PSB prominence to keep up with changing technological developments and viewer behaviour? It means that programmes such as Welsh and Gaelic language programmes are hidden in the digital weeds, often requiring many more than 10 clicks and a sophisticated knowledge of online platforms to reach. It means that the world-leading BBC children’s channels, CBeebies and CBBC, are now below 12 US channels in the channel listing of the leading pay-TV platform, Sky. It means that viewers are increasingly being led to programmes whose prominence is paid for by commercial competitors to PSB channels rather than to PSB content.

Yet viewers’ preference for PSB remains incredibly strong. Ten times more viewers want the TV guide at the top of their screen, in which PSB has preferred prominence, rather than the recommendations of the platform operator. More and more, viewers are not getting what they want.

There is widespread recognition that the rules need updating. In its 2015 PSB review, Ofcom concluded unambiguously:

“The current rules on schedule prominence for the PSBs were designed for an analogue broadcasting era. They need to be reformed to match changes in technology and ensure that public service content remains available and easy to find, in whatever way it is viewed”.


This House’s Communications Committee suggested extending the prominence rules to on-demand services and online menus. The TV licensing laws have already been updated to cover BBC on-demand services; the amendment simply demands that the same work be done for PSB prominence rules.

The amendment responds to the holes in the code in four ways: first, by adding PSB on-demand services to the list of services entitled to prominence; secondly, by extending the definition of an EPG beyond traditional channel listings to include connected and on-demand menus used by a significant number of consumers to access TV content. Note that the concept of “a significant number” is a robust one already in use under the 2003 Act, serving as a threshold test applying to Ofcom’s powers under the must-carry regime, so it has precedent, it is workable and means that it would apply to a few major platforms and not serve as an impediment to emerging innovators in the TV platform market.

Thirdly, it strengthens the requirement for prominence of PSB children’s channels specifically, so that parents and children can find the content they like and trust the most more easily, however they watch television. Fourthly, rather than seeking a legislative definition of prominence, it enables Ofcom to set prominence principles which the platforms would adapt as appropriate to their EPGs.

Some have argued that this proposal is unnecessary because the programmes and on-demand platforms that carry them prominently, such as BBC iPlayer, are thriving. This would be complacency of a high order, as well as ignoring the evidence of changes over time. Usage of iPlayer is indeed growing, but iPlayer’s market share is reducing: Netflix and YouTube are now the market leaders. Pressure on iPlayer and All 4 will increase in line with the amount that US companies are increasingly prepared to pay to support prominence for their commercial product on UK TV platforms. Similarly, children’s PSB programmes are indeed trusted and popular, but we know that platforms that display them prominently generate greater audiences than those, such as Sky, that do so less, so ensuring that the prominence rules cover those platforms is crucial to their sustainability.

What is at stake with the amendment is not an optional add-on to the regulatory regime around PSB, it is an updating of the prominence rules that is indispensable to the long-term sustainability of PSB in the face of changing technology. It is not just what consumers want, it is doing justice to the millions spent by licence fee payers on quality programming, to ensure that these programmes are not just made but watched.

Public service broadcasting cannot fulfil a public service if it is impossible to find or if it is crowded out by the sponsored content of wealthy and powerful commercial rivals. The amendment extends a principle that enjoys universal support for traditional TV viewing of the 2003 era, when the most recent Communications Act was written, to the more exciting, varied and complex world of TV viewing of 2017 and the years ahead. If we want PSB to flourish and remain at the centre of our national cultural life, rather than withering on the vine, we should support the amendment. I beg to move.

[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.