Freeview Channels

Steve Rotheram Excerpts

Wednesday 23rd November 2011 Westminster Hall

[Mr Howarth]

I am grateful to the hon. Gentleman. That is exactly the point that I want to make. I will come to it in a moment.

DMOL—Digital Television Multiplex Operators Ltd—which manages the Freeview platform and allocates channels, is owned and run by the public service broadcasters BBC, and ITV and Channel 4, as well as the infrastructure provider Arqiva. As mentioned previously, that is the equivalent of allowing a major retailer to decide where local independent competitors can site their operations.

[Steve Rotheram (Liverpool, Walton) (Lab)]

Further to the intervention by the hon. Member for Brentford and Isleworth (Mary Macleod), is my right hon. Friend aware that ITV recently launched its own shopping channel, which adds more force to the argument about potential unfairness, because DMOL is partly owned by ITV? Does that not call into question what our hon. Friend the Member for Ellesmere Port and Neston (Andrew Miller) mentioned—the level playing field?

[Mr Howarth]

Absolutely. I am grateful for that supportive intervention. I understand that not only has ITV moved into that market and put itself in direct competition with QVC and any other shopping provider by those means; it used QVC to pilot the operation of that new service. That adds force to the point that was made earlier.

The national and European trade associations share my concerns. They said in a submission to me:

“Businesses need certainty as well as fair competition. QVC’s business is threatened by the current regulatory uncertainty around channel allocation and we call on the government and on Ofcom, to give some clarity so that UK firms, like QVC,”

can continue to serve their customers and grow their businesses. ERA Europe stated:

“Our members’ future business in the UK is under threat from an uncertain regulatory environment regarding channel allocation on the Freeview platform and we urge the UK government and Ofcom to be more transparent in this most important area.”

At the heart of the issue is the ability of the dominant players to allocate valuable channel numbers to commercial competitors without independent adjudication and due process. QVC is currently positioned on Channel 16 on Freeview. I note that my hon. Friend the Member for Ellesmere Port and Neston (Andrew Miller) said that he does not use QVC. If he takes the trouble to tune in to Channel 16, he might find some very useful bargains, but I will leave that up to him. He should remember that when he does so, he will be supporting jobs in Knowsley.

The issue is very important. Ofcom said in relation to DMOL that

“any regulatory issues would require consideration under the relevant multiplex licences. Pursuant to the Communications Act its activities are also subject to Ofcom’s concurrent competition law powers under the Competition Act 1998.”—[Official Report, 14 November 2011; Vol. 535, c. 497W.]

That quote is from a parliamentary written answer from the Minister.

Ofcom was in contact with me directly ahead of the debate. Its briefing sheds more light on the situation. It confirms:

“The multiplex operators are subject to regulatory requirements set out in the relevant multiplex licences, which include provisions to ensure fair and effective competition. Ofcom’s formal role in relation to DMOL’s listing policy is to”

consider “compatibility with our code” on electronic programme guides

“and consider complaints from interested parties (including DTT”—

digital terrestrial television—

“licensees such as QVC). Pursuant to the Communications Act, DMOL’s activities are also subject to Ofcom’s concurrent competition law powers under the Competition Act 1998.”

The problem is that those regulatory powers are in practice retrospective. They can apply only after the channel changes have been determined.

In relation to the electronic programme guide code, Ofcom informed me that it

“has considered from time to time whether it would be appropriate to review the Code, but has concluded on each occasion that there was no pressing need to do so. It is likely that there will be communications legislation within the next few years, and the government has indicated that it is minded to look at EPG regulation in this context. We would need to take this into account in considering the appropriate timing for any review of the Code…On behalf of multiplex operators, DMOL has initiated a detailed review of the DTT listings policies, including the criteria for how different types of channels should be listed in the EPG. It has completed a first round of consultation, and identified the need for a further consultation early next year, following detailed research it has commissioned into the views of consumers.”

Given the likely threat to jobs faced by QVC workers, the statement about there being “no pressing need” is of some concern. Saying that the regulation falls within individual multiplex licences overlooks the fact that with the exception of the utility Arqiva, the multiplex operators are also dominant channel operators and indirect competitors of independent broadcasters.

Fortunately, there is an easy to implement solution, which I am sure that the Minister will be happy to hear. DMOL should be regulated in the same way as any other broadcast television platform. For example, the equivalent operation at BSkyB, to which the hon. Member for Brentford and Isleworth referred and which reaches fewer homes, has been regulated since the late 1990s.

That is not an argument for special treatment, merely one for a level playing field, as my hon. Friend the Member for Ellesmere Port and Neston put it, so that independent broadcasters can compete fairly with all channels, including the public service broadcasters. I accept that public service channels should have special prominence with preferential channel numbers, but the current policy and practice for allocating logical channel numbers on Freeview unfairly disadvantages independent commercial broadcasters and disproportionately benefits the channels operated by DMOL shareholders.

We all want to ensure that the UK broadcast market remains dynamic and successful. Channel allocation on Freeview is about economic fairness, business certainty, jobs, encouragement of investment and legal principle. It is also about the importance of a broad and diverse UK television market.

In conclusion, I ask the Minister to consider carefully the full implications of the current DMOL channel allocation system and its lack of transparency. I am sure that with good will and an understanding of the problem, the Government and Ofcom will between them be able to resolve the situation. In practice, that means asking Ofcom to ensure that DMOL is regulated in the same way as other platforms.