Freeview Channels

Debate between George Howarth and Mary Macleod

Wednesday 23rd November 2011 Westminster Hall

[Mr George Howarth (Knowsley) (Lab)]

I am last but not least, Mr Streeter. I am grateful for the opportunity to hold this debate. The mechanism for allocating channels is particularly important to the largest private sector company in my constituency, the shopping channel QVC, which employs more than 2,000 people nationwide, the majority of whom are based in Knowsley. Most of QVC’s work force are based in the UK, even though the company could move elsewhere given the nature of its business.

Although it sounds complicated and will involve a lot of acronyms, the issue under discussion is quite straightforward. QVC’s viewing figures and revenue are dependent on viewers being able to find it. As it stands, finding QVC is easy—as long as the channel remains the same—and it has 1.1 million loyal customers and many more viewers. Control of the channel number, however, rests in the hands of an organisation owned by its competitors. Such an arrangement could work with proper forward-facing regulation, but Ofcom does not actively regulate the process of channel allocation.

There have been three attempts to change the channel’s location in recent years, and another is imminent. We know that channel changes can lead to loss of revenue in excess of 35% per home. If Freeview channels were retail premises, it would be the equivalent of allowing major supermarkets to move the location of a smaller competitor at will. The issue, therefore, is about fair competition and appropriate regulation, to allow this thriving industry to create and sustain UK jobs.

[Mary Macleod (Brentford and Isleworth) (Con)]

I declare an interest in the debate because the headquarters of QVC will hopefully move to my constituency in the near future. My constituency is also the home of BSkyB, so I have an additional interest. On this issue, however, it seems that a group of companies is deciding the one thing that gives QVC its only competitive advantage and allows it to grow.

[Mr Howarth]

The hon. Lady made her point effectively and I will support her argument as my speech develops.

I have recently received helpful representations from the Interactive Media in Retail Group—IMRG—and the Electronic Retailing Association—ERA Europe. Both organisations support the case I am making today. The issue has a direct effect on QVC, but there is also a wider effect. Leaving aside QVC’s 1.1 million active customers, independent commercial broadcasters in the UK form a successful and growing sector that employs 22,000 people. Some of those broadcasters are now commercially vulnerable due to the unfair and unclear regulatory situation in respect of the Freeview platform. The allocation of Freeview channels is important to the whole of the independent commercial broadcasting industry.

According to a communications market report by Ofcom, non-public service broadcasters have a 28% share of the audience in UK multi-channel homes. That is a not insignificant number. Research undertaken by Deloitte shows that members of the Commercial Broadcasters Association—COBA—invested £432 million during 2009 in original UK content. Another survey, from 2008, showed that COBA members contributed more than £2.2 billion to the UK economy.

The Government recognise the importance of the sector and are currently undertaking a major review that is likely to lead to a new communications Bill. I welcome the rationale for that legislation, which I understand is to bring the UK’s regulatory regime into the digital age and to ensure a communications infrastructure that supports growth and innovation while protecting the public interest and consumer choice.

COBA told me that

“one of COBA’s fundamental principles is to support light touch regulation that benefits the whole market not just a few players.”

That is why handling the allocation of Freeview channels is so important. It will signal the Government’s intentions on fostering independent dynamic businesses in the communications industry and beyond.