Agency: CHI & Partners
campaignlive.co.uk, Friday, 17 June 2005 04:09PM
Regulation of the TV business in this country is in a bit of a muddle. To put it more elegantly, it's in transition - and the harbinger of the new order is Ofcom.
From the moment Ofcom was proposed as a super-regulator, superceding not just commercial media bodies such as the Independent Television Commission and the Radio Authority but also embracing more general sectors such as telephony, it was obvious that this was likely to be an organisation hungry for more power.
But to make sense both of its current remit and its future ambitions, it needs to remove one major obstacle - the BBC's independent system of governance - and this is proving a more than ticklish problem.
Ofcom might have assumed that, sooner rather than later, it would be asked to take over the regulatory duties handled by the BBC Board of Governors.
But the BBC has mounted an impressive rearguard action and last week the Government announced that it had found in favour of the status quo.
Which will compound Ofcom's frustration. Because, of course, Ofcom has been given overarching responsibilities for the future of public service broadcasting, having been charged with the task of "assessing the effectiveness of the designated public service broadcasters ... in delivering the public service purposes set out in the Communications Act".
Ofcom finds itself in an awkward bind - a classic case of responsibility without power. Its response has been to propose a new resource - a public service broadcaster funded either directly or indirectly by public taxation, with an annual programming budget of £300 million.
Last week ITV, in a submission to Ofcom, made clear that it fundamentally opposes this notion - favouring instead a central PSB fund for broadcasters to dip into. Five points out that the new entity's £300 million budget would dwarf its own £200 million budget.
1. With (in theory) 100 per cent of its UK radio and television output covered by statute, the BBC is the UK's pre-eminent public service broadcaster but the main commercial terrestrial channels - ITV, Channel 4 and five - have varying degrees of public service commitment.
2. Broadcasters' ability to deliver on these commitments will become more difficult in the face of digital switchover, given increasing pressure on their ability to maintain audience share. Ofcom is responsible for "joined-up thinking" in managing good order during what will in effect be a tactical retreat from the public service high-ground by these broadcasters.
3. This will take place in the context of continued licence-fee funding for the BBC. In March, the culture secretary, Tessa Jowell, confirmed that the licence fee would remain in place until 2016 but warned that it may become unsustainable thereafter.
4. One proposal that precedes the creation of Ofcom is the notion that a special PSB fund could be set up. Broadcasters other than the BBC could apply for funding from this pot for programme proposals meeting certain public service criteria.
5. The broadcaster most recently identified with a version of this is Channel 4. In a speech to the Oxford Media Convention back in January, Channel 4's chief executive, Andy Duncan, called for public funding to cover the £100 million annual shortfall the channel will face by 2015. Ofcom has ruled this out over the short term but will revisit the issue in 2007.
6. Five believes a licence-fee-funded BBC should continue to take a lead in PSB while also taking a lead role in promoting a smooth changeover to digital. But it calls for the BBC trustees and Ofcom to sign a "memorandum of understanding" as regards the ways their roles should dovetail.
7. ITV's main goal is to extricate itself from existing PSB commitments and pressure on Ofcom in this regard seems to be paying off. Last week, ITV was given the go-ahead by Ofcom to cut back on some of its regional programming requirements.
8. In the medium term, the main regulatory hotspot is BBC Charter Review. Public consultation on the Green Paper closed on 31 May. The Department of Culture, Media and Sport is now wading through more than 3,500 submissions. A White Paper will be published later this year followed by a further period of consultation.
WHAT IT MEANS FOR ...
THE BBC'S RIVALS
- The commercial public service broadcasters have always believed - rightly or wrongly - that the survival of the BBC is in their best interests, providing it's the right sort of BBC.
- Their worst nightmare would be a complete meltdown that saw the more popular parts of the BBC privatised and commercialised.
- The picture that continues to emerge from various consultation processes is that the BBC will retain its privileged position as the cornerstone of British broadcasting.
- Advertisers are wary of doing too much to destabilise the status quo - and in the last decade have distanced themselves from their Thatcher-era position that the BBC should be privatised.
- They will be heartened by the prospect of the DCMS and Ofcom between them keeping the BBC in its box without damaging it too much in the process.
- But they will be slightly wary of the possibility (implicit in calls for an extra public service fund of some sort) of more public funding entering the television economy. The last thing they want is for commercial broadcasters to be given a new excuse for complacency.
This article was first published on campaignlive.co.uk
Agency: CHI & Partners