HC Deb 02 July 1996 vol 280 cc783-90
Mr. Sproat

I beg to move amendment No. 173, in page 2, line 5, after 'programmes' insert '(together with any ancillary services, as defined by section 22(2))'.

Madam Deputy Speaker

With this, it will be convenient to discuss the following amendments: Government amendments Nos. 174 to 176.

No. 143, in clause 8, page 9, line 4, after

'services', insert 'and digital additional services'.

Government amendments Nos. 177 to 180 and 182.

No. 142, in clause 12, page 11, leave out lines 38 to 41.

Government amendment No: 183.

No. 144, in page 12, line 9, after

'services', insert 'and digital additional services'.

No. 145, in page 12, leave out lines 14 to 21.

Government amendments Nos. 184 to 192, 14 to 16, 193, 17, 194 to 202, 18, 203, 207 to 211, 19 and 212 to 215.

Mr. Sproat

There are many amendments and changes in this group of amendments and I assure the House that I do not aim to speak at such length again during further consideration of the Bill.

I announced on the final day of Committee that the Government intended to end the current practice of advertising on ancillary services, following representations that my Department had received from the Independent Television Commission. Owing to the point we had reached in the Bill's passage, my announcement in Committee had to serve as the most effective means of alerting the ITV companies, Channel 4 and others to our thinking on the analogue regulation of ancillary services. My announcement has enabled the ITV companies, Channel 4 and other interests to make their views known to me on this issue and I met Mr. Leslie Hill, the chairman of the ITV Association last week, to discuss it.

In the light of my discussions with the ITVA, I am persuaded that, on balance, we should not impose new regulatory controls in this area. The ITVA assures me that it regards the limited advertising that it carries on ancillary services as an adjunct to the services that it offers advertisers who purchase spot-advertising broadcasts in commercial breaks between programmes. Given that the ITC has the power to regulate this activity and to tighten its current guidelines, if it believes that the distinction that I have outlined is being abused, I have decided not to pursue the matter.

This large group of amendments adjusts the provisions of the Bill with regard largely to additional and ancillary services. Amendments Nos. 183, 185, 187, 188, 191, 194, 208 to 211 and 213 provide that ancillary services, electronic programme guides and conditional access data for television or radio programmes should not be counted towards the 10 per cent. limit for additional services. However, electronic programme guides will still need an additional services licence. Amendments Nos. 173 and 195 put it beyond doubt that digital ancillary services are within the scope of the regulator's general powers.

Amendment No. 174 provides that, on television multiplexes, any service consisting wholly or mainly of still pictures will be an additional service. On radio, some additional services might be receivable either as sound or text, perhaps depending on technology in the receiver. Amendment No. 197 ensures that such services will be categorised as additional services.

Amendments Nos. 175 and 198 allow the Government, by affirmative order, to amend the definitions of programme services, and therefore what is counted as an additional service, to take account of technological developments. Amendments Nos. 176 and 199 are technical. They ensure that the Bill does not inadvertently require local delivery service licensees to obtain a multiplex licence.

Clause 9 allows the ITC to bundle multiplex licences, where it believes that that would be the most appropriate way to advertise them, so that they will be more commercially attractive. Amendments Nos. 177 to 180 clarify the way in which the ITC shall consider the award of multiplex licences that have been advertised in this way. The ITC had asked us to clarify the advertisements.

Amendment No. 182 has also been made at the behest of the ITC. It allows it to include whatever aspects of a multiplex provider's technical plan it sees fit in the multiplex licence. Amendment No. 207 makes the same adjustment with provisions covering radio multiplexes.

Amendments Nos. 192, 12, 15 and 16 tidy up arrangements for the order-making power that the Secretary of State will exercise to reserve capacity for existing broadcasters. Amendment No. 192 makes it clear that the Secretary of State may, in any order made under clause 26, provide that clauses 7 to 16 and 18 and 19, which are to do with licensing multiplexes and digital programme services, may not apply, or may be modified, with regard to certain multiplexes that are to carry existing broadcasters. That will allow us to deal with the particular circumstances of the channel 3/4 multiplex, which will be operated by the broadcasters, and the Channel 5/S4C multiplex, which will be shared with new broadcasters. The hon. Member for Merthyr Tydfil and Rhymney (Mr. Rowlands) has tabled an interesting amendment on that matter, which we shall come to later.

Amendments Nos. 14, 15 and 16 clarify the terminology and purposes of clause 26(3)(c). Clause 26(3) allows the Secretary of State to provide, by order, for the ITC to vary the existing analogue licences under which channels 3, 4 and 5 provide their services. When they take up their guaranteed places and provide digital simulcasts of their analogue services, the simulcasts will be covered by those existing licences, but some conditions of those licences will need to be varied to cover the different circumstances of the digital services.

Amendment No. 17 corrects the definitions contained in clause 35 relating to channel 3. Amendment No. 200 reflects an undertaking that I gave in Committee. The Secretary of State may amend the simulcast requirements for national independent radio services. The amendment provides that she must consult bodies representing listeners before doing so.

Amendment No. 201 introduces a flexibility, suggested by the Radio Authority, into the distinction between national and local radio multiplexes. It may, in certain circumstances, be desirable to provide for local radio stations to broadcast on a national radio multiplex. For example, early indications are that there may be problems in finding frequencies to provide any digital local radio in Northern Ireland. If that turns out to be the case, this provision will allow the Secretary of State to direct the Radio Authority to reserve some capacity on the national radio multiplex in Northern Ireland for such a service.

Amendment No. 202 fulfils my commitment in Committee to the hon. Member for Ashfield (Mr. Hoon). The proposal was also made by the Radio Authority. As the Bill stands, the guaranteed radio capacity for the INR stations is what is needed to reproduce the service on digital at the same technical quality as on analogue. That ignores two factors. First, AM quality is inferior to FM quality, so it might put Virgin and Talk Radio at a disadvantage; secondly, broadcasters should be able to use DAB to improve quality. Amendment No. 202 puts that right by giving the authority discretion to take those factors into account.

Amendment No. 18 is a simple drafting amendment. Amendment No. 203 makes it clear that in considering what capacity should be reserved for the BBC and local radio multiplexes, the Radio Authority should have regard to the likely pressure for places on the multiplex from the independent sector.

Amendment No. 19 corrects an earlier drafting error which omitted the fine for breach of local radio multiplex licence conditions from the list of fines which could be amended by order. Amendments Nos. 214 and 215 add digital programme and digital sound programme services to the list of services carried by a local delivery—that is a cable service. Here end the Government amendments.

I propose to respond briefly to the further amendments in this group since, as many hon. Members will know, we had detailed discussions in Committee regarding the balance that we are seeking to achieve between digital programme services and additional services. I said then, and I say again now, that while the Government believe that digital terrestrial multiplexes should be used primarily for television services, we fully recognise also that additional services may play an important part in the digital future and may help attract some customers to obtain digital receivers.

We listened carefully to the arguments on the issue and we responded to ensure that the whole of the 10 per cent. of each multiplex that could be used for additional services is available for services that are genuinely additional and not taken up with the data that are really closely linked with programme services. That is the purpose of amendment No. 183 and some of those grouped with it, which provide that all ancillary services, all electronic programme guides and all television conditional access data will count as part of the 90 per cent. reserved primarily for programme services.

The amendment tabled by the hon. Member for Newham, North-East (Mr. Timms) seeks to include a variety of additional services as specific criteria for the award of multiplex licences. That is not appropriate. That does not mean that there is no scope for the ITC to take the proposals for additional services into account when awarding licences. The overarching criterion of clause 8 states that the ITC shall award licences to those proposals best calculated to promote the development of digital television broadcasting.

Should an applicant have proposals for additional services which appear likely to be profitable and so will contribute to the viability of digital television and perhaps to a further investment in digital technology, that can be taken into account. Should proposals for additional services appear likely to attract substantial numbers of people to buy digital receivers, that too can be taken into account.

Sir Wyn Roberts (Conwy)

Will my hon. Friend give way?

Madam Deputy Speaker

The Minister has finished.

Mr. Geoffrey Hoon (Ashfield)

We are able to welcome these amendments, not least because, as the Minister generously conceded, many of them were suggested by Opposition Members in Committee. I should like to press the Minister a little on the Government's decision to withdraw amendment No. 21.

The amendment arose out of a debate in Committee concerned with electronic programme guides for the new digital as well as existing analogue services. Concern was expressed in Committee that the original wording of section 48(3)(c) of the Broadcasting Act 1990 was designed to allow electronic programme guides for analogue television. Since 1990, due to the uncertainty of the legislation, channel 3 companies in particular have not proceeded with such programme guides. On the other hand, Teletext was concerned that, having secured a public teletext licence on one financial basis, any amendment to the 1990 Act might require it to continue with the arrangements on another.

It was obvious in Committee that there was a need for greater clarification. The Minister undertook in fairly clear words to table an amendment on Report. He said: Following representations that my Department received from the ITC for clarification of the Government's intentions about the matter, we have decided to make it absolutely clear, by amending the 1990 Act, that advertising should not be carried on ancillary services. We shall bring forward an amendment on Report to implement that."—[Official Report, Standing Committee D, 18 June 1996; c. 717.] Concern has been expressed, in particular, by Teletext, which has written to us saying that there may be serious commercial damage to the company as a result of the Government's decision to withdraw the clarification of the 1990 Act. By withdrawing the amendment, it seems that the uncertainty over the interpretation of the 1990 provision will continue. That is unsatisfactory.

I listened carefully to what the Minister said about having a meeting with Leslie Hill of the ITV Association. It is understandable that there should be concern, but I wonder whether it would have been appropriate to have a meeting with Teletext or its representatives. It appears that part of a complicated compromise, and an undertaking by the Minister in Committee, have been abandoned in the face of representations from one interested party only.

Mr. Ted Rowlands (Merthyr Tydfil and Rhymney)

I do not share the line taken by my hon. Friend that the amendments were tabled without any consultation with the regional television stations. A company such as HTV would certainly have been affected, and would have made its representations before amendments were tabled. The Minister is, rightly and properly, responding to the impact that the amendments would have had on the revenues of small regional television stations.

6.15 pm
Mr. Hoon

I appreciate that argument, and I am not necessarily taking sides between Teletext and the channel 3 companies. Having had a discussion in Committee, where attempts were made to produce a sensible and workable compromise, what appears to have happened in the light of the Minister's undertaking is that only one argument has been addressed by the Government in their decision to withdraw the amendment. I am not saying that I would necessarily have reached a different conclusion, but, after a long and detailed discussion in Committee, it is unfortunate that the matter appears to have been resolved in this way.

Sir Wyn Roberts

I want to follow up the point made by the hon. Member for Merthyr Tydfil and Rhymney (Mr. Rowlands) and express my appreciation to my hon. Friend the Minister for not pursuing amendment No. 21. I listened carefully to his list of Government amendments. I attempted to intervene earlier to ask about amendments Nos. 20 and 21, which, as I understand it, would stop the ITV companies using their teletext pages in support of regional on-screen advertisements. As the hon. Member for Merthyr Tydfil and Rhymney mentioned, that would have cost HTV a significant amount, because, over the past year or so, it has invested £750,000 in providing that service to assist its advertisers. Teletext apparently does not operate in that area, so its monopoly would not be affected.

Mr. Stephen Timms (Newham, North-East)

I wish to speak to amendments Nos. 142, 143, 144 and 145, which are in my name.

The distinction that the Bill draws between programme services and additional data services in the licensing of digital television multiplexes is unnecessary and unhelpful. The further requirement that multiplex operators will be obliged to ensure that at least 90 per cent. of their capacity comprises what are called programme services, is arbitrary. I fear that, before long, it could emerge as a substantial roadblock in the development of a United Kingdom information super-highway.

My central amendment, No. 142, would remove that distinction and the 90 per cent. requirement. The reason for doing that is the sheer speed of technological development. The already blurred line between programme services and other services will very quickly become non-existent.

The Government have attempted to clarify matters, and, as far as they go, I welcome amendments Nos. 183 to 185, which include in the programme section of the multiplex all the programme-related services and relevant technical services. There is a problem in that the amendments compound the confusion. The definitions are very difficult to make, and I worry that they are vague and will be very hard to interpret.

There is already confusion in the industry about what will fall into which definition. If I understood the Minister correctly a few moments ago, he said that electronic programme guides will belong in the 90 per cent. of programme services. I welcome that, because there has been some debate about what will happen.

The truth is that, within a very short time, the range of transmitted information on these services will cover a seamless continuum. In the Bill, we are creating a rather clumsy boundary by dividing programming from the rest—the 90 per cent. from the 10 per cent. Very soon, that boundary will become entirely unworkable.

My amendments are widely supported in the broadcasting and telecommunications industries. Perhaps it is not surprising that they are supported in the telecommunications industry. In a note to me about the amendments, British Telecom has stressed the important contribution that the integration of broadcasting and interactivity can make—it must not be stifled through inadvertent. if well intentioned, restrictions on its development. I agree with that.

The Government should know that there is strong support for these amendments from programme makers in the television industry. The ITV Association has confirmed to me today that it does not oppose the amendments, and Carlton Television has written to me to express its firm backing for them. Carlton said in its letter: The ability to offer innovative services is an important feature of digital technology, and to arbitrarily restrict the capacity, may result in DTT [Digital Terrestrial Television] being significantly less attractive than other competing distribution systems.

Mrs. Anne Campbell

I wonder if my hon. Friend is aware of the excellent electronic guide that is offered by the BBC on the Internet. It demonstrates very well how interactivity will work: it allows one to programme in available channels and one's programme preferences, and to receive daily a fully personalised list of possible viewing. That is a good example of the type of innovation that we will see in the future, to which interactivity will contribute a great deal.

Mr. Timms

I am grateful to my hon. Friend for that excellent point. That service is exactly the type of innovative and imaginative new service that we will see growing up very rapidly. We must ensure that the regulatory framework allows the potential of digital television to grow and prosper.

My amendments are not prescriptive or restrictive, and they do not set a minimum level for additional services. They simply allow the industry to pursue increasing convergence between broadcasting and interactive services, unhindered by arbitrary restrictions. They allow the ITC to encourage the development of a vibrant interactive services industry—which we all want to see—overlapping and intertwined with digital television. That will hold out the prospect of all types of economic and social advantages in the years ahead.

The amendments also remove the need to distinguish programme services from non-programme services, which will be extremely and increasingly difficult to do. For all those reasons, I commend these amendments.

Mr. Rowlands

We are very relieved that the Government are not proceeding with their amendments. I appreciate the point made by my hon. Friend the Member for Ashfield (Mr. Hoon) that he was not taking sides, because there would have been a point to consider other than that made by the right hon. Member for Conwy (Sir W. Roberts). Not only HTV was affected; so was S4C. One had the bizarre thought that Teletext might have to provide an advertising service in Welsh, and I think that that might have defeated it.

I should like to know about teletext's potential development, with the amount of digital space it has been offered. As I understand it, teletext is composed of graphics and no sound. With the new digital capacity, will the teletext service have some form of moving pictures and sound if there are sufficient megabytes? Will it be possible to develop CD-ROM quality?

Mr. Gale

The fact is that Teletext has been given insufficient capacity to develop its services to the full extent, which means that very serious restraints will be imposed on the service it provides. The withdrawal of this Government amendment probably will enhance those restraints.

Mr. Rowlands

I did not say which side I would support. I was trying to discover to what extent we are offering such a service. Presumably clearer pictures can now be developed with the given megabytes. I am not promoting the idea, but simply inquiring how far we have gone in the Bill in saying how teletext might develop.

Mr. Sproat

I should like to tell the hon. Member for Ashfield (Mr. Hoon) that I quite agree that it is undesirable that, late in the Committee stage, we should make a series of proposals and then decide to drop them. What happened—there is no criticism of anyone in this—is that, in the middle of the Committee stage, we received from the ITC proposals that we should act on teletext, as I described to the Committee. That was the first opportunity that I had to tell the Committee, and I did so.

I subsequently received representations. Companies such as HTV would have been severely hit, as my right hon. Friend the Member for Conwy (Sir W. Roberts) has said. I was struck by the force of their arguments, and I invited the ITV Association to come to see me. My officials also heard the arguments of Teletext Ltd. It became clear in the course of those discussions—the majority of which I attended—that a serious under-estimate of the amount of advertising received by small companies had been made.

Therefore, I decided—on balance, having listened to the ITVA and having heard what Teletext Ltd. had to say—that we should withdraw our proposals. Obviously the ITC will monitor the situation very closely. However, I am satisfied that, on balance, we did the right thing in allowing particularly the smaller stations to maximise their income from this source.

To answer the specific question of the hon. Member for Merthyr Tydfil and Rhymney (Mr. Rowlands), the teletext cannot be moving.

Amendment agreed to.

Amendments made: No. 174, in page 2, line 8, leave out from 'service' to end of line 12 and insert— `(b) a teletext service, or (c) any service in the case of which the visual images to be broadcast do not consist wholly or mainly of images capable of being seen as moving pictures, except, in the case of a service falling within paragraph (b) or (c), to the extent that it is an ancillary service.'.

No. 175, in page 2, line 12, at end insert— '(4A) The Secretary of State may, if having regard to developments in broadcasting technology he considers it appropriate to do so, by order amend the definition of "digital programme service" in subsection (4). (4B) No order under subsection (4A) shall be made unless a draft of the order has been laid before and approved by a resolution of each House of Parliament.'

No. 176, in page 2, line 14, leave out `by satellite' and insert—

  1. '(a) by satellite, or
  2. (b) in the provision of a local delivery service (as defined by section 72(1) of the 1990 Act)'.—[Mr. Wood.]

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