The Government has paved the way for TV and radio commercials to be regulated largely by the industries themselves in a big shake-up of broadcasting advertising.
The move was proposed in the Government's White Paper on communications, unveiled by the culture secretary, Chris Smith, on Tuesday. It represents a victory for the Advertising Association, which has been lobbying ministers to bring broadcasting into line with the self-regulatory system for press and posters.
The White Paper called for a system of 'co-regulation', under which TV and radio could draw up its own regime, but which would be overseen by Ofcom, the new watchdog proposed by the Government to supervise the converging broadcasting and telecommunications sectors.
This would be similar to the scheme run by the Radio Advertising Clearance Centre, which approves national and regional campaigns by checking that they comply with the Radio Authority's code.
Under the Government's plans, Ofcom would regulate the amount and scheduling of TV advertising. It would 'ensure that standards do not diverge without good reason between advertising and programmes, address concerns about advertising needing to be legal, honest, decent and truthful, and take account of public policy concerns', the White Paper said.
Although Ofcom would have principal responsibility for regulating advertising, it could give the broadcasting or advertising industries the go-ahead to run industry-based codes that met these principles.
'Effective co-regulation would require that the industry committed resources and authority to the relevant body, including a complaints-handling function,' the White Paper said. 'This body would need to develop an independent public profile, transparent mechanisms and lines of accountability.'
The Government said the 'strengths and effectiveness' of the Advertising Standards Authority (ASA), which was well-regarded here and abroad, gave it confidence that co-regulation could work.
But it stopped short of endorsing complete self-regulation, saying it would become increasingly difficult for viewers and listeners to distinguish between ads and programmes. 'We therefore consider it essential to maintain the availability of strong regulatory back-up powers so that the regulator (Ofcom) can act if industry-based approaches do not develop or operate effectively,' the Government said.
The White Paper, issued jointly by the Department of Culture, Media and Sport and the Department of Trade and Industry, is expected to be turned into legislation by 2003 if Labour wins a second term.
Ofcom would replace the Independent Television Commission (ITC), Broadcasting Standards Commission (BSC), Oftel, the Radio Authority and the Radiocommunications Agency.
The ad industry has complained that the ITC and BSC had overlapping functions and sometimes issued contradictory rulings about the same commercials.
The Government's other key proposals involve media ownership. The White Paper gives agencies a boost by proposing a lifting of the ban on them holding TV and radio licences. 'We will rely instead on the competition authorities to judge the likely impact on competition of agencies holding licences,' the White Paper said.
The blueprint may prepare the ground for a single ITV company, calling for an end to the rules that prevent one company holding the two London weekday and weekend franchises and having more than a 15 per cent audience share.
Although this could herald a merger between Granada Media and Carlton Communications, ministers said normal competition rules would apply and offered an important safeguard for advertisers worried that a giant ITV company would control 75 per cent of ad spending. The Government promised that any mergers would be considered 'with a view to safeguarding the interests of consumers and market players such as advertisers'.
The White Paper, criticised by some commentators as too vague, fudged the issue of cross-media ownership - and whether Rupert Murdoch should be allowed to expand into terrestrial TV - until after the general election.
The Government merely 'invited views' on the matter. Ofcom would be asked to find ways of regulating the internet to protect children and unsuspecting users, promote rating and filtering systems, although ministers admitted that it would be impossible to police all material. The ASA will retain the job of regulating ads on the internet.
The existing bans on political and religious advertising would be retained.
The BBC governors emerged relatively unscathed from the White Paper, despite widespread speculation that they would lose some of their supervisory powers.
WHAT THE INDUSTRY THINKS
Malcolm Earnshaw, the director-general of ISBA: 'Not only does advertising play a crucial role in the wider consumer interest by driving competition in the economy, but it also provides the vast majority of funding on which UK commercial media is based. The views of advertisers should therefore be heard loud and clear in all matters that could significantly affect the shape of UK media. This paper could, in many ways , prove to be an 'opportunity missed' by the Government to take a fuller account and place advertisers' and consumers' needs at the centre of the future media environment.'
Jim Marshall, the chairman of the IPA's media policy group: 'Our initial reaction is concern that the paper has not addressed the issue of the BBC and where it sits in the regulatory system. The board of governors at the BBC has survived and is effectively still responsible for the scheduling of the BBC. I think it has a lot to do with an imminent election. With ITV, it's saying that it will relax ownership rules but it is effectively passing responsibility on to the Competition Commission. It would be very serious if advertisers' interests are not represented in ITV's future.'
David Liddiment, ITV's director of programmes: 'The White Paper sets out a clear vision for the future regulation of broadcasting in the digital age. Its strong endorsement of ITV's unique contribution to public service broadcasting as the UK's leading regional broadcaster is good news both for the industry and for viewers.'