HC Deb 01 July 1996 vol 280 cc594-603

  1. '(1) The Independent Television Commission (in this section referred to as "the Commission") shall do all that they can to secure that every licensed service uses a transmission system complying with Article 2 of Council Directive 95/47/EC on the use of standards for the transmission of television signals ("the Directive").
  2. (2) In this section "Community digital standard" means any of the alternatives permitted within the mandatory parts of the standards to be met by a transmission system for the purpose of complying with Article 2(c) of the Directive (which relates to television services that are fully digital).
  3. (3) The Commission may, after consultation with the persons specified in subsection (6), specify particular Community digital standards to be met in the provision of licensed services which are fully digital.
  4. (4) In deciding whether, and if so how, to exercise their powers under subsection (3), the Commission shall, in particular—
  1. (a) have regard to the desirability of promoting—
    1. (i) mutual technical compatibility between digital television services, and
    2. (ii) the development of digital television broadcasting, and
  2. (b) consider whether it would be reasonably practicable for persons providing licensed services which are fully digital to use transmission systems meeting the Community digital standards in question.

(5) Where the Commission have exercised their powers under subsection (3), they shall—

  1. (a) publish notice of their determination in such manner as they think fit, and
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  2. (b) do all that they can to secure that any licensed service which is fully digital uses a transmission system meeting the Community digital standards specified under that subsection.

(6) The persons referred to in subsection (3) are—

  1. (a) every person providing a licensed service,
  2. (b) the BBC,
  3. (c) the Welsh Authority,
  4. (d) the Secretary of State,
  5. (e) the Director General of Telecommunications,
  6. (f) the Director General of Fair Trading,
  7. (g) such persons appearing to them to represent manufacturers of television broadcasting or receiving equipment as they think fit,
  8. (h) such persons appearing to them to represent viewers as they think fit, and
  9. (j) such other persons as they think fit.

(7) In this section— licensed service" means any service licensed by the Commission under Part I of this Act or Part I or II of the 1990 Act or provided under a relevant cable licence, but does not include any service which is only broadcast or transmitted for reception outside the European Economic Area; relevant cable licence" means a relevant licence within the meaning of Part III of Schedule 12 to the 1990 Act (transitional provisions relating to existing cable services).'—[Mr. Ian Taylor.]

Brought up, and read the First time.

Mr. Ian Taylor

I beg to move, That the clause be read a Second time.

Mr. Deputy Speaker

With this, it will be convenient to discuss also the following: New clause 16—Common technical standards for digital television— '.—(1) The Secretary of State may by order provide for additional powers for the Independent Television Commission ("the Commission") to adopt technical licensing requirements for digital television services as he may consider appropriate for the purpose of ensuring the greatest practicable mutual technical compatibility of those services. (2) Before making an order under subsection (1), the Secretary of State shall consult—

  1. (a) every person who is the holder of a licence to provide a digital television service;
  2. (b) every independent analogue broadcaster as defined in section 2(1) of this Act providing a qualifying service as defined in section 2(2) of this Act;
  3. (c) such other providers and potential providers of digital television services as he thinks fit;
  4. (d) such bodies or persons appearing to him to represent manufacturers and producers of equipment used for receiving digital television services as he thinks fit;
  5. (e) such other bodies or persons who are concerned with technical licensing requirements for digital television services as he thinks fit.
(3) An order under subsection (1) may not be made unless a draft of the order has been laid before and approved by a resolution of both Houses of Parliament.'.

New clause 43—Power of Commission to adopt technical licensing requirements for digital television services— `.—(1) After section 2 of the 1990 Act there is inserted— 2A. (1) The Commission may adopt such technical licensing requirements for digital television services as it may consider appropriate for the purpose of ensuring the greatest practicable mutual technical compatibility of those services. (2) Before the Commission adopt any such licensing requirements as are referred to in subsection (1), they shall consult—

  1. (a) every person who is the holder of a licence to provide a digital television service;
  2. (b) every independent analogue broadcaster as defined in section 2(1) of the Broadcasting Act 1996 providing a qualifying service as defined in section 2(2) of that Act;
  3. (c) such other providers and potential providers of digital television services as the Commission think fit;
  4. (d) such bodies or persons appearing to the Commission to represent manufacturers and producers of equipment used for receiving digital television services as the Commission think fit;
  5. (e) such other bodies or persons who are concerned with technical licensing requirements for digital television services as the Commission think fit.
(3) Each of the following is a digital television service for the purposes of this Part and of Part I of the Broadcasting Act 1996—
  1. (a) A multiplex service, as defined in section 1 of the Broadcasting Act 1996;
  2. (b) A digital programme service, as defined in section 1(4) of that Act;
  3. (c) A qualifying service, as defined in section 2(2) of that Act;
  4. (d) A digital additional service, as defined in section 21(1) of that Act;
  5. (e) An ancillary service, as defined in section 21(2) of that Act;
  6. (f) An electronic programme guide service, that is to say the service of providing, whether in conjunction with a television programme service or otherwise and whether directly or indirectly, television programme information by broadcasting, transmitting or otherwise conveying that information (whether by wireless telegraphy, by means of a telecommunications system or otherwise) to equipment which is capable of receiving and/or processing the information, where that service is provided in digital form;
  7. (g) A domestic satellite service transmitted in digital form;
  8. (h) A non-domestic satellite service transmitted in digital form;
  9. (i) A licensable programme service provided in digital form;
  10. (j) A local delivery service, as defined in section 72, where that service or any of the programmes comprised in it is delivered in digital form;
  11. (k) A diffusion service (within the meaning of Part I of the Cable and Broadcasting Act 1984), whether prescribed or otherwise, which falls to be regulated by the Commission under section 134 of, and Schedule 12 to, this Act and which is provided in digital form.'.".

New clause 44—Amendment of section 6(1) of 1990 Act (Technical licensing requirements)— `After subsection (1)(e) of section 6 of the 1990 Act (general requirements as to licensed services) there is inserted— (f) where the licensed service is a digital television service, that it complies with any licensing requirements adopted by the Commission under section 2A.".'.

New clause 45—Amendment of section 73(3) of 1990 Act (Licensing of local delivery services)— (1) Section 73 of the 1990 Act is amended as follows. (2) For subsection (3) there is substituted— (3) Subject to subsection (4), sections 3, 4, 5 and 6(I)(f) shall apply to local delivery licences as they apply to licences granted by the Commission under Part I of this Act. (3) After subsection 4(c) there is inserted— (d) the reference in section 6(1)(0 to 'every licensed service' shall be construed as including a reference to licensed local delivery services.".'.

New clause 46—Amendment of Schedule 12 to 1990 Act (Cable services)— 'After paragraph 2(1) of Part III of Schedule 12 to the 1990 Act there is inserted— (1A) In discharging their functions under this Schedule as respects the licensing of diffusion services, the Commission shall do all that they can to secure that any diffusion services which are provided in digital form comply with any licensing requirements adopted by the Commission under section 2A of this Act; and a relevant licence may include such conditions as appear to the Commission to be appropriate for securing that the diffusion services authorised to be provided under that licence comply with any such licensing requirements.".'.

Amendment No. 228, in clause 7, page 8, line 3, leave out 'the service' and insert 'all the multiplex services available in that area'.

Amendment No. 229, in clause 8, page 9, line 8, leave out 'the service' and insert 'all the multiplex services available in that area'.

Amendment No. 256, in clause 11, page 11, line 41, at end insert— '(i) that the licensed service complies with any licensing requirements adopted by the Commission under section 2A of the 1990 Act (power of Commission to adopt technical licensing requirements for digital television services)'.

Amendment No. 257, in clause 18, page 19, line 15, at end insert— '(4A) Without prejudice to the generality of section 4(1) (general licence conditions), it is hereby declared that a digital programme licence may also include such conditions as appear to the Commission to be appropriate for securing that any ancillary service provided by the licence holder complies with any conditions adopted by the Commission under section 2A of the 1990 Act (power of Commission to adopt technical licensing requirements for digital television services). (4B) In subsection 4A, "ancillary service" has the meaning given by section 21(2) of this Act.'.

Amendment No. 258, in clause 26, page 25, line 27, at end insert— '(c) ensuring that qualifying services, and any ancillary services provided by independent analogue broadcasters, comply with any licensing requirements adopted by the Commission under section 2A of the 1990 Act (power of Commission to adopt technical licensing requirements for digital television services)'.

Amendment No. 259, in page 26, line 11, leave out 'either' and insert 'any'.

Government amendment No. 253.

Mr. Taylor

We are dealing here with a large group of new clauses and amendments. I shall speak briefly to new clause 41 and the consequential Government amendment No. 253, and pause to see what comments emerge.

The Government have taken careful note of the debate in Committee on common technical standards for digital television. My hon. Friend the Member for North Thanet (Mr. Gale) played a key role in raising these questions in Committee, helping us to pin down the crucial issues at the heart of the matter. I give him credit for his contribution to the debate. The hon. Members for Caithness and Sutherland (Mr. Maclennan) and for Kirkcaldy (Dr. Moonie) also made leading and constructive contributions.

As hon. Members will know, the Government responded to the debate by undertaking a consultation exercise on the possibilities for co-operation between digital terrestrial multiplex providers to ensure that all digital terrestrial decoders could receive all digital terrestrial services. As both Government and Opposition amendments show, the issue crosses the different transmission media. Interoperability between services on any given medium is clearly desirable for digital terrestrial, cable and satellite, but so too is interoperability between services on different media in so far as that is reasonably practicable.

We can all find common cause in the aim of supporting interoperability. The Government believe that the commercial imperatives of a market in which the objective is to sell services to the largest possible number of subscribers will tend to support, rather than work against, interoperability. We should not ignore the potential for the market to find its own solutions, as has occurred in other areas covered by my responsibility as Minister for Science and Technology.

There is a desire for interoperability to enable the services to reach the widest possible market. To do so by providing powers to pick particular standards across the board, for example, would create unnecessary uncertainty, retarding development and raising costs. Neither of those effects is in the interests of the consumer, so we have endeavoured to strike the necessary balance. With that in mind, ensuring basic interconnection between services comes down principally to two issues: first, ensuring interoperability between different conditional access systems and, secondly, ensuring that the maximum compatibility that is reasonably practicable between transmission systems is achieved.

First, on conditional access, hon. Members will know that, on 26 June, we published for further consultation detailed proposals on the regulation of conditional access services for all modes of digital television. Those draft regulations and the associated draft licence for conditional access services will ensure that any broadcaster may obtain conditional access service from every operator. That means that he can include in his broadcast signal the control information for each system.

Each decoder can unscramble the picture under the control information appropriate to its conditional access system. That is known as simul-crypt, which I understand we will discuss later. It will work in practice because our regulations, following the European directive, will require every decoder to contain the so-called common scrambling alorithm. All that is necessary is to have the conditional access service data for each particular system to control its operation in unscrambling the picture. That is guaranteed by our regulations, which will oblige every conditional access operator to supply service to any broadcaster who requests it.

The second main objective is to ensure the maximum practicable compatibility in transmission standards. The European directive already mandates particular transmission standards for each mode of digital delivery. Each standard contains a number of mandatory sections. Within those sections, however, a number of choices can be made for some required transmission parameters. That will allow broadcasters to adopt the best set of parameters for coping with the particular environment in different countries, for example, and provides important flexibility behind the different standards.

Most manufacturers are likely to incorporate substantially the full range of options in their broadcast and receiving equipment, but if different equipment manufacturers in the United Kingdom chose to manufacturer different limited selections of those options—perhaps because they were the options favoured by particular broadcasters or multiplex providers—technical incompatibilities could result. New clause 41, therefore, provides a reserve power for the ITC, following consultation with all relevant players, to select a particular set of options from those allowed by each transmission standard. All broadcast service licence holders would then be required to observe those choices in transmission.

Taken with our regulations for implementing conditional access regulation, I hope that it is clear that new clause 41 does precisely what we are seeking: it provides a means to ensure the greatest practicable mutual technical compatibility of digital television services across all three delivery mechanisms—terrestrial, satellite and cable.

New clause 41 also fulfils the Government's obligation to implement the rest of the provisions in article 2 of the television standards directive.

Amendment No. 253 provides simply that the definitions in the Broadcasting Act 1990 apply to new clause 41.

Our amendments achieve their aims without creating great uncertainty as to what standards might be specified. They also avoid certain of the undesirable side effects of some of the other new clauses and amendments in this group. Nevertheless, before I pause to allow other hon. Members to speak, it may be of interest to Opposition Members to know that the Government are minded to accept one further aspect of those amendments.

Mr. Hoon

I shall not delay the House by repeating the Minister's observations, as they reflect those of Opposition Members in moving various amendments designed to achieve the purpose that the Government are now so keen to advocate. It is appropriate, however, to repeat my earlier mild criticisms of the Government—and perhaps the Minister's Department—that the amendments were not tabled much earlier. I am afraid that it is an example of government by amendment.

I am pleased that the Government have shifted their position, gradually, in the direction of common sense. New clause 41 in particular reflects the views of the Committee. Hon. Members on both sides of the Committee were anxious that a common standard should be established.

The Minister referred to our deliberations in Committee. I hope that he also noted a number of plaintive cries for his attendance so that he could put the view of the Department of Trade of Industry as that would have assisted us all. It is for further consideration—perhaps by a different Government—if these matters require amendment in future, that there should be greater co-ordination between Government Departments to achieve what is finally a commonsense approach to the problem.

Mr. Gale

I concur entirely. I am sure that, if further amendments are necessary, the next Conservative Government will be only too pleased to address them.

I welcome my hon. Friend the Minister for Science and Technology to the Dispatch Box and thank him for his kind opening remarks. As he is aware, having studied reports of the proceedings in Committee, concern has been expressed by hon. Members on both sides of the House that the core argument on the development of digital terrestrial and satellite broadcasting relates to conditional access and the technology involved.

What my hon. Friend has told the House this afternoon is extremely welcome. Last week, the Government published a draft statutory instrument on conditional access. That will go a long way towards meeting many of the concerns about a common interface. If the viewing public are to have the confidence necessary to invest in initially expensive new digital receivers, it is vital that they should have access to all the programmes on offer. They will not be content with a selection achieved through one box, and then having to purchase a second, third or fourth decoder to receive all programmes.

Set manufacturers must be confident that they are producing equipment that will not be obsolete within a few months or a few years if they are to invest in the production lines necessary to turn out the new receivers. I hope that, as a result of what has been said today, set manufacturers and the public will proceed with confidence and that there will be a new range of wide-screen digital television receivers—with a set-in box, not a set-top box—capable of receiving all the channels whether by satellite, terrestrial or cable television.

As my hon. Friend said, new clause 41 would give reserve powers to the Independent Television Commission. It is similar to the amendment that I tabled in Committee and which was lost on the Chairman's casting vote. Although new clause 41 gives the ITC some discretion to choose between sub-sets of agreed European standards, it does so only within the terms of article 2c of the television standards directive.

I am assured that article 2c refers only to the most basic elements of the digital transmission system. It does not cover any of the ancillary elements such as service information, which is not the television picture or sound, but information about the service; it does not cover conditional access, but the statutory instrument will; and it does not cover electronic programme guides, which were discussed in Committee. All those elements are essential both for the digital transmission itself and for compatibility between them. There will be an opportunity through the statutory instrument to address those missing elements if my hon. Friend the Minister for Science and Technology is so minded, and I would be grateful if he would comment on that.

I am extremely grateful for the manner in which both responsible Departments have responded to the arguments that were put forward in Committee. The amendments will go a very long way towards meeting our concerns. Will my hon. Friend the Minister for Science and Technology give an undertaking that the statutory instrument relating to conditional access will be on the statute book and operative in time to run in tandem with the Bill's enactment, so that all those concerned can have absolute confidence in the manner in which they are to proceed?

6 pm

Mr. Maclennan

I welcome the Minister's speech, and only in passing regret that the Government's intentions in this very complex area became clear rather late when they tabled their amendments on Thursday.

The complexity of the issue, both in terms of the technology and the legal language that we are deploying in the amendments, would probably be baffling to most auditors of this debate. I think that we all agree—I do not believe that there is any division across the Floor of the House on the issue—that we are trying to guarantee the ability of audiences to choose to receive either digital terrestrial or digital satellite services, or both, without disposing of equipment that they have already acquired. It is recognised that that is vital to the take-up of the new digital service. I take it that that is what inspires the Minister's amendments, although they are also clearly designed to bring the Bill into line with the terms of article 2c of the European Union television standards directive.

I tabled new clauses 43 to 46 because it has been put to me—and, I imagine, to other hon. Members—that the implementation of article 2c does not go quite far enough in removing uncertainties. The hon. Member for North Thanet (Mr. Gale) described well the defects of reliance on article 2c provisions that seem to be encompassed by new clause 41, and I endorse what he said. The provisions are of course flexible and, since we are in a fast-moving market, perhaps it would be wrong at this stage to specify a complete set of transmission elements where the ITC could play a role. Service information, for example, which is not covered by the directive, is information on where particular services may be found. It is important that compatible standards are made mandatory if receivers are to be able to locate channels and switch between them.

New clause 16, which the Labour party tabled, seems to cover similar ground, by appearing to lay a similar duty on the ITC. I am sure that it has a similar goal in mind, but I am concerned that the new clause would introduce delay into the process by simply providing, after extensive consultation, for the Secretary of State to lay an order giving the ITC powers—a somewhat slow procedure bearing in mind how rapidly it might be possible for a powerful player to come to dominate the market.

The ITC has indicated that it would consult widely and fully if it were exercising discretion in this area, and try to reach a satisfactory position by industry consensus. I do not think that, in this matter, we can simply allow the market to operate. It could take a long time to find a common standard, or one could be imposed on the industry. I therefore commend to the Minister new clauses 43 to 46, which would give the ITC the discretion that I think it requires. That is the right approach to create conditions in which a proper inter-connect regime can emerge.

I found the Minister's speech somewhat tantalising in that he held out the hope that some of the amendments, which have been tabled by hon. Members of all parties, might conceivably be acceded to. I therefore hesitate to labour my points lest, by some chance, I might be the fortunate person whom he intends to favour.

Mr. Ian Taylor

We have had a useful and clarifying debate. I suppose that I am touched by the words of the hon. Member for Ashfield (Mr. Hoon). One's absence is felt in these matters but, as I said, my hon. Friend the Minister for National Heritage did a tremendous job in Committee. My hon. Friend and I kept in very close touch and I would not want the hon. Gentleman to think that I had no interest in the Committee's proceedings. There is a close working relationship between the Departments of Trade and Industry and of National Heritage. My responsibilities as Minister for Science and Technology include the economic supply chain, copyright issues and many of the other basic technical standards that underpin the Department of National Heritage's broadcasting policy, and this is one of the areas in which such matters are particularly important.

Conditional access and interoperability are crucial to our ability to move forward in this very exciting digital television revolution. I entirely agree with my hon. Friend the Member for North Thanet: we must ensure that customers know where they stand and that they do not have to buy many boxes. He is absolutely right that, before we get very far down this track, the new sets will have built in decoders rather than set-top boxes. We are possibly talking about the change of 8 million television sets—that is a slightly back-of-an-envelope calculation—which is a considerable challenge. Indeed, we have set down a timetable for a review of when we might ultimately consider switching off analogue. I would like that to be capable of happening, and for us to give guidance, as soon as possible.

I should like, if I may, to cross-reference this issue with the White Paper that my right hon. Friend the President of the Board of Trade issued on radio spectrum pricing only 10 days ago. It contains a very useful section on radio spectrum pricing in relation to the broadcasting industry, which is not the subject of these amendments but to which I should nevertheless like to draw attention because I believe that it is relevant to the background to the debate. Set manufacturers must also be given clarity.

As always, there is a need for a concept of commercial return in order to stimulate investment. We must not stipulate to the point that we ignore the innovative process, nor must we draw the power so widely that the people who are investing consider the risk too big and. therefore, delay their activities until the Government of the day clarify their intentions.

In my judgment and that of my colleagues, new clauses 43 to 46 would give the ITC powers to do virtually anything in connection with digital television services. Far from creating the certainty that we require, they would be likely to provoke uncertainty. Were the power to be applied to technical standards in decoders, the need for clearance would arise under the single market procedures of directive 83/189/EC, and that would inevitably create further uncertainty and delay. We cannot accept those new clauses, or new clause 16, which offers similar scope. We believe that it, too, would be a recipe for delay and increased costs.

I accept that not every element can be covered in the statutory instrument. Basic standards on service information are included, although not the full specification. The statutory instrument cannot implement more than is in the directive, but it will be laid in the autumn. In the document published on 26 June, we laid down a timetable to which I intend to adhere. We are having consultations until the end of this month, and we will move swiftly thereafter.

Finally, we come to amendments Nos. 228 and 229, tabled by the hon. Member for Caithness and Sutherland (Mr. Maclennan) and others. It is important to be charitable, and I must say that the amendments are ingenious and we like them. They seem to offer a response to some of the potential competition law difficulties identified with proposals explicitly requiring collusion between bidders for multiplex licences. Co-operation is still possible, and may be desirable. It should be clear that, under these amendments, the ITC would not be able to preclude bids that did not involve co-operation between multiplex providers. Equipment using different conditional access systems from that of other multiplex operators is still capable of receiving all the multiplex services through the application of simul-crypt, as I explained earlier.

Furthermore, new clause 41 and its associated amendment, amendment No. 253, provide a back-stop power for the ITC to help to ensure the greatest mutual technical compatibility that is reasonably practicable between digital services. Amendments Nos. 228 and 229 seem to us to add value to this objective in the specific context of digital terrestrial television. They make clear that, all other things being equal, proposals that added to interoperability without raising immediate problems of competition law would be favoured over ones that detracted from interoperability. The Government are therefore minded to agree to these amendments but, for the reasons that I have explained, we will resist the other amendments—and the new clauses—in the group.

Question put and agreed to.

Clause read a Second time, and added to the Bill

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