Media Convergence: Communications Committee Report

Lord Inglewood Excerpts

Wednesday 30th October 2013 Lords Chamber

Moved by

[Lord Inglewood]

That this House takes note of the Report of the Select Committee on Communications on Media Convergence (2nd Report, Session 2012–13, HL Paper 154).

[Lord Inglewood (Con)]

My Lords, we speak at a moment of high drama in the politico-media world. Lord Justice Richards, sitting with Mr Justice Sales, earlier today dismissed PressBoF’s application for a judicial review of the Privy Council’s decision to reject its charter on press self-regulation, and will dismiss its application for an injunction on the Privy Council’s sealing of the alternative all-party charter later today.

Barring any attempts by PressBoF to challenge this decision at the Court of Appeal, I believe that, as things stand, the Privy Council is still due to meet to seal the royal charter on the self-regulation of the press later this afternoon. I dare say that historians of the media will one day find it ironic that at the same time this House met to debate media convergence, a phenomenon which raises the question: for how much longer will the press truly require its own discrete self-regulatory arrangements at all as distinct from those which may yet come to be established in the future, which will have a wider focus and include forms of news media available online, in text, audio or indeed audio-visual form, with which the activities of what we now know as newspapers may have seamlessly merged? It is a coincidence of events that must generate at least a little Schadenfreude.

Of course, until recently, separate media industries were actually distinct. They were easily distinguishable by the way in which they delivered their content; for example, newspaper businesses were newspaper businesses to a great extent because their content reached us on large sheets of thin paper rather than over the spectrum or through the flickering light of a projector at the cinema. Media convergence, however, has changed all this. Alongside their individual traditional delivery mechanisms, content providers increasingly digitise their material and distribute it through the use of internet protocol, known as IP. Conveyed by IP, content, which has been reduced down to packets of data, can be assembled as text, image, video, sound or however else technology permits. This occurs on a growing range of devices, both fixed and mobile.

In turn, this has stimulated media providers of all kinds into a search for new ways of delivering their content, many of which have been straightforwardly borrowed from industries they each used to consider neighbours. This has blurred the boundaries between them. These experiments, in turn, have given audiences all kinds of ways to consume virtually any content, at any time, anywhere and on any device. In some instances, the impact of this revolution is far-reaching and often entirely positive, not just for the regulation of content standards, but also for content creation and competition. Barriers of all kinds are dissolving.

The impact of all this may not be fully felt at once, or even for some time, across the whole population. A recurring theme of our deliberations in this inquiry was the need, therefore, for haste rather than panic. As they say, we were looking for an evolutionary, rather than a revolutionary response. However, equally clear was that some thinking, some preparation and, to some extent, action, is required now to ensure that the evolutionary path is smooth and that we do not allow the regulatory architecture for the media as a whole to become entirely mismatched with the technological and commercial landscape which it oversees. I hope that our report and my remarks will make it clear why.

In our report, we submitted recommendations under three main headings. First, content standards; secondly, content creation and thirdly, competition. I should like to take each briefly in turn.

On content standards, which occupied us the most, it is worth saying that this country’s content standards framework has to date proven remarkably resilient. However, we found that the confidence and trust which the public have grown to enjoy in it will come under increasing pressure in two areas in particular. First, there is news content. Newspapers are not just printed, but are online and they carry video packages with the look and feel of traditional television. Broadcasters publish websites, including text-based articles, similar to online and print. The scheduled news programmes are still broadcast, but are also available on demand, both on digital channels and on a variety of websites. It is tremendously exciting, but potentially rather confusing because the regulatory framework has been left behind.

Broadcast news is required to adhere to the broadcasting code, with its full range of protections relating to accuracy and fairness, as well as an obligation to uphold due impartiality. While the emerging press regulator, with oversight of participating newspapers and websites, may well include some of these protections in its code, it will certainly not include an obligation to uphold due impartiality. It bears saying that this is a good thing. The abiding difference between the balanced, impartial news provided by the broadcasters, and the vigorous, partisan news provided by the press, has helped to create a beneficial tension and a valuable mixed ecology. Nevertheless, the impact of convergence means that the providers of the one will become increasingly difficult to distinguish from the other. The binary distinction between impartial and partisan news will no longer be mirrored in the difference between the news which UK audiences happen to watch and the news which they happen to read. In order to ensure that UK citizens continue to be able to identify and have confidence in the provision of impartial news coverage, and that they can identify and bring accurate expectations to partisan content, these blurred lines should be tidied up.

The second area that will come under increasing pressure is what we might call non-news, audio-visual content—sometimes known as TV and TV-like content. Perhaps the sharpest example of this pressure point can be seen in the content now available to the public through internet-connected televisions. On these, regulated and unregulated content, licensed and unlicensed services, sit side by side on one device. Increasingly, the public will be able to switch seamlessly between them. As the European Commission says in its Green Paper, Preparing for a Fully Converged Audiovisual World: Growth, Creation and Values, from the consumer’s point of view, the difference between linear and non-linear services might blur. Providers under no obligation to observe the watershed, for example, are increasingly only one press of the button away from those that do. The clues which the public might have used to sense that they are entering a different environment, in which different standards are to be expected and to be found, are disappearing. With that comes the risk that regulators will no longer be able to be sure that the public can confidently make sensible decisions about what is suitable for them and their families.

I turn now to our recommendations on content standards and want briefly to make one preliminary point. During the inquiry, we received a number of thoughtful proposals for a complete overhaul of the regulatory framework. These aimed for a new, logically coherent system. While some of the thinking that had gone into the proposals was impressive, we felt that they did not account for one or two important points. For example, the pace of media convergence is contested, and it was put to us repeatedly during the course of the inquiry that traditional services such as linear broadcast television remain hugely popular and resilient. What is more, there are very marked generational differences in the ways that younger groups are using media compared with their older peers. This meant, we felt, that it would not be right, in considering reforms of the content standards framework, to try to set a course for the promised land. Rather, we should look more simply for a framework that enables audiences to make good decisions in the circumstances of the time about the content which suits them and their families. The framework will almost certainly need updating from time to time to the extent that it fails to achieve this, and fails by extension to earn or deserve their trust. To that end, we made two recommendations which could and should be adopted in the short term, and we postulated on a basis, one that is entirely up for debate, around which further change might occur in the medium to longer term.

First, in the shorter term, broadcast licences should be amended to ensure that standards similar to those set out in the Ofcom broadcasting code, amended for the relevant environment, would apply to any service using the same channel name or brand as a licensed broadcast service. It is at present an anomaly that the BBC, to give an example, is required to uphold the broadcasting code when it broadcasts, but not when it makes content available through the iPlayer, and especially in light of the director-general’s recent announcements about online commissions, we feel that this is an important step. Secondly, there is a case for positively encouraging other non-broadcast providers to join the framework in return for some form of public recognition or kitemark. Were such an opportunity to be provided, I suspect that some of them would seize it, not least for their own commercial advantage but equally so that the UK public could build accurate expectations of the standards and character of their products.

We also made a number of recommendations as regards the content standards framework that focus on the medium to long term, but I do not propose to rehearse the detail of these. In a nutshell, we recommend a slight reconfiguration of the regulatory framework involving the establishment of four different approaches to content standards across four clearly defined types of content. The first one is public service broadcasters, the second one would be non-public-service broadcast news providers, the third would be non-news television and television-like content, and the fourth would be the open internet. Some of the impact of this reconfiguration might seem to be a bit striking at first blush. For example, no longer would broadcasters other than public service broadcasters be required to uphold an obligation to due impartiality. In place of the watershed, a standard system of age-based classification would be adopted for TV and TV-like services, providing the public with useful information to take into account in making their own decisions about what they and their family should look at. Ofcom would be given a new proactive role with regard to the content available to UK citizens over the open internet, with a duty to consult on and publish UK citizens’ expectations of the responsibilities of digital intermediaries, and to monitor performance against those expectations.

While we believe that these recommendations point in the right direction, they are entirely up for debate, one that we would welcome and thoroughly encourage. The Government’s response to our report was, as I said at the time, disappointingly thin—albeit that that is probably better than being thick. They deferred the substance of any response to our report to what was at the time a forthcoming policy paper called, Connectivity, Content and Consumers: Britain’s Digital Platform for Growth. However, the Government appear to have avoided the major questions, saying that they will look to industry and regulators to provide clarity on the right approach to content standards and regulation in the digital world. But because we believe that what is required is a reconfiguration of the framework around the media as a whole, there is an important and necessary role for the Government in setting out a view and leading debates that can be orchestrated sensibly only from that particular podium. For example, there are matters of principle: should we, generally speaking, adopt a more libertarian approach in which the public are expected to make their own choices about which media and content to use, informed by appropriate information, or should there be a more paternalistic approach in which regulators impose certain standards and help make those choices on behalf of the public? As our recommendations show, our report tends to lean towards the former over the latter. However, where the line is drawn is an important matter for genuine and legitimate debate.

Secondly, there are matters of process. How can we bring about evolutionary change to a system of regulation which is cemented in statute, and which in recent years has been subject to a slow cycle of change—10-yearly or thereabouts—imposed by the parliamentary timetable as much as anything else? In our report we propose a new approach, including the use of the super-affirmative procedure. We believe that this would avoid the “stop/go” approach, and provide the legislative mechanism to ensure smoother evolutionary change in an era when time for primary legislation is allocated elsewhere. In summary, I urge the Government and the industry to read carefully the thinking behind our recommendations on content standards, and to engage properly with this important set of debates.

I now turn briefly to the two remaining aspects of our report, which address content creation and competition. On content creation, convergence has made it possible for new investors to reach audiences outside the traditional broadcast environment. Your Lordships will be aware that my noble friend Lord Dobbs recently had a great hit on Netflix, entirely funded by that enterprise. Our congratulations go to him. However, investment in content from these new entrants remains dwarfed by the investment from the five public service broadcasters and their spin-off channels, which still represent something like 90% of UK spend on first-run, originated output. This seems very likely to remain the case for some time to come. In that light, it is important to recognise that the ability of the public service broadcasters to continue investing in content depends on their ability to reach large audiences in this country.

We therefore recommend that the Government consider the implications of changes in the way that public service content will be discovered and accessed by viewers on new connected TVs and other converged devices and, specifically, what interventions on prominence and “must carry online” obligations may be appropriate and possible in non-linear environments. In our view, as far as possible the on-demand services offered by public service broadcasters should achieve due prominence on any relevant home screen or guide which directs users to content.

Having said that, the way that the public access content is almost inevitably going to change, and the range of brands they choose to consume is likely to widen. Against that background, convergence can be seen to raise some very important general questions about public investment in content creation. As audiences continue to fragment and models for funding content creation adapt, exactly how public service broadcasting is provided, by whom, and the contestable process of allocating public money to pay for it, are all matters which deserve debate. The issue again is that these questions must be considered from a higher vantage point, and in a manner which is more holistic—to use a word I dislike—than is currently the case.

To date, decisions about each type of public service broadcaster—the BBC, Channel 3, Channel 4 and Channel 5—have largely been made independently of each other. In future, given the paramount importance of sustainable and sensible funding in order to safeguard public service broadcasting, we think that it is crucial for its future to be considered in the round by the Government. However the detail may be configured, a stable and sustainable future is required for the system as a whole, not just for each player within that system.

We believe that the Government would be well advised to get ahead of the curve, rather than waiting for difficulties to arise. Therefore we recommend that as preparation for, and in advance of, the next BBC charter review, the Government consider fundamental strategic questions surrounding the public service broadcasting system as an interconnected whole, and the potential impact on it of convergence. For example, what is the right scale and scope of PSB? What purposes should it serve? How can it best be sustained in a converged world?

On matters relating to competition, it is equally clear that convergence has sharpened long-standing debates over Ofcom’s ability to promote competition across media markets. While we did not have the time to carry out a comprehensive review of broadcasting competition powers, it was clear from the evidence we received that clarification is required of Ofcom’s existing ex ante competition powers for the audio-visual sector. The aim of such clarification should be to enable Ofcom to take effective action where necessary, but also to ensure a high hurdle before any ex ante approach can be adopted. It is important for there to be clarity for all those who might be affected.

In my conclusion, I thank the noble Lords, Lord Bragg and Lord Gordon, both widely knowledgeable and constructively hard-working members of the Communications Committee at the time of this inquiry, who have since left it. Their contributions to our final report were significant. I know that they are both sorely missed at our regular Tuesday afternoon meetings.

Finally, I also thank our specialist adviser, Robin Foster, for his expertise and enthusiasm throughout the inquiry. On a subject of often thorny complexity, Robin’s advice was always forensic, clear and logical, and his easy and droll manner equally helped to make the committee’s whole experience of this inquiry a pleasure.

I look forward to the debate and to the Minister’s response. I beg to move.

--- Later in debate ---

[Lord Inglewood]

My Lords, I thank all those who have taken part in this debate. I hoped that we might have been slightly more numerous, but I know that the particular circumstances today have meant that a number of noble Lords who would have liked to take part have been unable to do so. I begin by thanking all those, in addition to the Minister, who took part. They endorsed and underscored the approach of the committee, pointing out, as I said, that the issue is complicated and not straightforward. Wider implications are involved and nothing is clear.

I turn specifically to the Minister. It is true that, in my opening remarks, I commented on the physiognomy of the initial response. Rest assured, we did not write the report in order that we might get a clap on the back from the Government. We wrote it, and believe it is important, because the kind of things that I and other Members of your Lordships’ House described are going to happen. That has huge implications for the country, and we need to respond to the changes, working with the Government to bring about the best for the country.

I will make one point in response to something that the noble Lord, Lord Stevenson, said. There is a difference between regulation and the regulatory framework surrounding this sector. We are not necessarily keen on seeing more regulation; we believe that the regulatory framework within which this sector operates will have to adapt. If we have made a positive contribution —as I believe we have, from what the Minister said—towards trying to bring about an evolving policy that is sensible, realistic, workable and effective, we will feel that we have done a constructive job. I beg to move.

Motion agreed.