Media: All about ... Ofcom

The body could see its powers stripped under the Tories.

It is the time-honoured duty of all Opposition leaders to rail against government waste, not least as embodied in the form of the quango; it is their fate, once happily ensconced in office, to create yet more of the things, spend more on their upkeep and generally recruit greater numbers to their ranks.

After all, astute use of the quango - the quasi-autonomous non-governmental organisation - is the easiest way of recognising loyalty and rewarding political services rendered. Why deny yourself and your friends one of the most handsome of the perks of power?

That's why the advertising and media industries should perhaps refrain from reading too much into David Cameron's headline-grabbing proclamations last week.

Cameron vowed that, once in power, he would emasculate one quango in particular - the media industry regulator, Ofcom. This body, he argued, has become bloated and has been meddling in policy areas that it shouldn't.

He said: "Give Ofcom, or a new body, the technical function of handing out the licences and regulating lightly the content that is on the screens ... But it shouldn't be making policy, it shouldn't have its own communications department ... The head of Ofcom (the chief executive, Ed Richards) is paid almost half a million pounds. We could slim this body down a huge amount and save a lot of money for the taxpayer."

Richards may well feel that the time has come to recalibrate the telemetry readings on his career trajectory, while renewing acquaintances in the headhunter fraternity. Show trials and public executions (metaphorically speaking) always add up to a colourful spectacle for any new regime.

Whether he can help to safe-guard Ofcom's future over the coming months is another matter, however. Richards may feel, on reflection, that Ofcom's performance of late has been less than deft.

It's possible, for instance, to argue that Ofcom has been seeking to reward failure (suggesting ways to restructure the broadcast economy to suit Channel 4) while attempting to punish success (trying to monkey around with BSkyB's business model). It's not surprising that Ofcom has its critics. And those critics will not keep quiet in the debate about Ofcom's future.

1Ofcom came into being to oversee new regulatory provisions outlined in the Communications Act of 2003 and it became active in December of that year. It oversees telephony and data telecoms as well as broadcast media, where its specific duties are to ensure quality, plurality and competition.

2The Ofcom board is 18-strong. This board oversees the activities of three executive committees (the main management committee plus ones covering policy and operations), 12 board committees and four advisory committees.

3Ofcom has 817 employees and total staff costs amount to £58.3 million of its £127.6 million operating costs - so the average Ofcom salary is £71,000. Remuneration for the seven members of the lead executive committee (including Richards) for the 2008-09 financial year totalled more than £1.8 million. Ofcom is part-funded by the tax payer and part-funded by industry.

4Ofcom is believed to have taken a lead role in writing many sections of Digital Britain, published on 16 June by Lord Carter (Richards' predecessor at Ofcom) for the Government. The report recommends that Ofcom be given more powers in a number of areas, not least in overseeing a reconstituted public-service broadcasting economy in which the BBC is no longer the sole beneficiary of licence-fee funding. The main winner here (aside from Ofcom) would be Channel 4.

5Ofcom's report into the workings of the UK's pay-TV market was published on 26 June. Its central recommendation, that Ofcom should be able to decide how much BSkyB charges for its prime sports programming assets, understandably infuriated Sky, which has pledged to use "all available legal avenues to challenge this unwarranted intervention".

6Rupert Murdoch's News Corp is a lead shareholder in BSkyB. British political leaders generally reckon it to be advantageous to win the backing of the Murdoch clan in the run-up to a General Election. A General Election will, in all probability, be called within the next ten months.

WHAT IT MEANS FOR ...

MEDIA OWNERS

- Deregulation tends to benefit the private sector in all fields - so, arguably, less Ofcom could actually mean more and better commercial broadcasting in the long run.

- But it's going to be interesting to see how much vigorous life there is in commercial broadcasting as we come out of recession. We've seen worrying signs of a dependency culture blossoming within institutions that were previously rather independent-minded.

- So, by the time David Cameron is given the keys to 10 Downing Street, we may be looking at a free-to-air broadcast landscape utterly dominated by the BBC (incorporating Channel 4), with a rump of enfeebled commercial companies squabbling for scraps of revenue around the fringes.

- Yet even in such a scenario, there would be little sense in trying to maintain Ofcom in its current form - because the BBC will continue to resist (ferociously) the notion that it should be regulated by any other body than the BBC.

- And, after all, the Competition Commission and the Office of Fair Trading are already guarantors of the free operation of commercial markets.

ADVERTISERS

- Lord Currie of Marylebone, the Ofcom chairman up until March, when he retired, has warned that the market will regret any moves to introduce "regulation on the cheap", arguing that poorly paid executives make poor decisions.

- Well, perhaps. Advertisers would quite like to see a healthy commercial broadcasting sector - and would be happy to see this being achieved by Ofcom staff paid nothing to take no decision at all.

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