PROVISION FOR BROADCASTING OF SERVICES PROVIDED BY INDEPENDENT ANALOGUE BROADCASTERS (Hansard, 2 July 1996)

§ Mr. Rowlands
I beg to move amendment No. 250, in page 25, line 30, leave out 'one or two' and insert 'up to three'.

Mr. Deputy Speaker
With this, it will be convenient to discuss amendment No. 251, in page 25, line 30, at end insert— '(2A) Provided that the Secretary of State shall exercise his power to make directions under subsection (2) above so as to secure that each of the independent analogue broadcasters mentioned in paragraphs (a) to (c) of section 2(1) either becomes the operator of the multiplex in question or is in a position to approve the operator.'.

§ Mr. Rowlands
The amendments seek to amend clause 26, which empowers the Secretary of State to do what he has already stated in policy terms that he intends to do: allow channels 3 and 4 to decide who their multiplex operators will be. Thus the Government have agreed that the BBC will be its own multiplex operator, presumably through its privatised transmission system, and channels 3 and 4 will be able to make arrangements either to control or to determine who their multiplex operators will be. So all three public service broadcasters will have such a right.
800 In the broadcasting scene, however, there are two other public service broadcasters: the new Channel 5 and the present S4C. The Bill recognises that they are two additional public service broadcasters as they are qualifying services. The amendments empower the Secretary of State to give S4C and Channel 5 the same relationship with their multiplex operators as channels 3 and 4. I cannot see why a distinction has been made. They are public service broadcasters, exactly like channels 3 and 4, and their needs in terms of a multiplex operator are the same. I am sure that both Channel 5 and S4C have expressed to the Department their wish to collaborate and co-operate in that respect, as there could be considerable conflicts of interest between their needs and those of a commercial multiplex operator.
In Wales, the whole of multiplex 3 will be taken up by the public service broadcasters, that is, S4C and Channel 5. In the rest of the United Kingdom, half of multiplex 3 will be taken up by Channel 5, which will be a public service broadcaster. It is therefore not unreasonable to propose that the Minister grant those two public service broadcasters the same position as he has granted to channels 3 and 4 and the BBC.
The real worry is that a multiplex operator's commercial interests could differ greatly from the needs of both Channel 5 and S4C. Let me illustrate that by reference to Channel 5. It will be vital for Channel 5 to achieve digital status as early as possible. Under analogue arrangements, it will have an extremely restricted capacity to access viewers. I shall paint a grimmer picture of that when I present my next amendments, which dwell on the transmission problems that will arise in Wales.
There is no doubt that Channel 5 will want to develop digital services as rapidly as possible, because only then will it be able to reach out to a much wider audience than will be available to it under analogue. It will be in Channel 5's interests to do that, but will it be in the interests of a commercial multiplex operator? Will it not be in a commercial multiplex operator's interest to extend digital services merely to the large conurbations already covered by Channel 5 analogue? There is undoubtedly a potential conflict of interests between the needs of a commercial multiplex operator and those of a public service broadcaster such as Channel 5, from next January. The same applies to S4C. It, too, is worried that a multiplex operator's commercial priorities may differ from its own, in reaching out to small audiences in sparsely populated areas. It would be all right if those two were not public service broadcasters. But they are, and they have a remit and duty to reach out as best they can to the widest possible audience. They should therefore riot be placed in a different position from that of channels 3 and 4 or the BBC.
The amendments were designed to allow the Secretary of State to make that change. Channel 5, which must be up and running by January, hopes that the digital service will allow it to reach a much larger audience than it will be able to reach through analogue. It is worried that months could elapse before the ITC chose a multiplex operator and that that would be valuable time lost in delivering its service. S4C shares that concern.
In Welsh terms, the whole of multiplex 3 is already dedicated to the two public service broadcasters. I appreciate that the matter is slightly more complex for the rest of the United Kingdom, because Channel 5 will take up only half the multiplex. I do not suggest that Channel 5 801 should control the other half of the multiplex or have a right to it, but it should at least have the right to a meaningful say and control over who the multiplex operator should be, so that the operator complements and is on the same wavelength as S4C and Channel 5 in trying to deliver their service.
I shall not press my first amendment because, while I have been sitting here, I have reached the conclusion that it is redundant. I thought that I needed to lift the ceiling on the "one or two" mentioned in the Bill, but I now understand that, as the BBC is excluded, that would not be necessary. However, I am keen on the second of my two amendments because, in straightforward language by amendment standards, it is in line with the wish expressed to the Department by S4C and Channel 5. They should have a meaningful say on, if not control and ownership of, the multiplex operator, to help them to provide the best possible digital service and the fastest means of delivering it, not only in Wales but in the rest of the United Kingdom.

§ Mr. Sproat
The hon. Member for Merthyr Tydfil and Rhymney (Mr. Rowlands) has made so many valuable contributions to our debates in Committee that I should like to have helped him, but I cannot give him too much comfort on this matter. I shall give him a little, however.
S4C has been allocated half the third multiplex in Wales. That multiplex will also carry Channel 5. Half the multiplex in the rest of the United Kingdom, apart from Wales, is therefore free and open to new broadcasters. That is therefore quite a different position from that of channels 3 and 4, which between them will control all the capacity on the second multiplex, or the BBC, which will have control of the first multiplex. That is why it would not be fair to give to Channel 5 and S4C—given S4C's demi position on this—the same rights as channels 3 and 4, which will use the whole of the multiplex. I know that the hon. Gentleman understands that. That is why it would not be right to say that they must be the multiplex operators.
However, Channel 5 and S4C are perfectly free to bid for the multiplex licence together, separately or together with others who might wish to come on to the third multiplex, or even people who do not wish to come on to the third multiplex. If their bid succeeds, they will control the multiplex licence; if it does not, they can be certain that their position on the multiplex will be safeguarded by the ITC through the licensing of the multiplex operator.
Although Channel 5 and S4C have that guarantee and safeguard, I cannot give them the guarantee that the hon. Gentleman seeks, although I imagine that, with a guaranteed place on the multiplex in Wales, S4C will have a great influence on the multiplex operator.
With those assurances, I hope that the hon. Gentleman will withdraw the amendment.

§ Mr. Rowlands
The Minister mentioned the powers of the ITC and said that it can offer that type of assurance. As the Bill stands, will it be possible for Channel 5 and S4C to say to the ITC, "The multiplex operator that you are thinking about or suggesting, or that has made a bid, really would not be interested in doing what we need to do"? In other words, if they do not have the right to 802 control or operate the multiplex, will they have a de facto veto over a potentially unfriendly multiplex operator that bids for multiplex 3?
That is extremely important because, although I partly appreciate the Minister's argument about the complicated position in the United Kingdom, where Channel 5 is only one half of the multiplex, the whole of multiplex 3 in Wales will be dedicated to two public service broadcasters, and those broadcasters have remits, duties and responsibilities. It is very important that no multiplex operator is chosen that will impede the fulfilment of the needs and wishes of a broadcasting service of the type that is represented by S4C and the new Channel 5.
7 pm
If the Minister can give me an assurance that, if nothing else, S4C and Channel 5 will have a de facto veto over the would-be multiplex operator, I should be happy to withdraw my amendment.

§ Mr. Sproat
Although S4C would not have a veto, it will be absolutely incumbent on the multiplex operator to provide S4C with what S4C needs to fulfil its statutory requirements. To make certain of that, I shall get my Department to make an order to that effect, so that S4C will not have a multiplex operator that does not take its needs fully and properly into account. We intend that S4C should have that, and we shall ensure that it does have that.

§ Sir Wyn Roberts
On timing, it is well known that the BBC and ITV, giving analogue services, will be first in the field, so they will have an advantage over competitors. Will S4C and Channel 5 have a similar advantage? Will the timing of the operation of their multiplex roughly coincide with the timing of the multiplexes that apply to ITV and the BBC?

§ Mr. Sproat
The Government believe that the sooner they can get it off the ground, the better. It is up to them. There will certainly be nothing that says that multiplex 1 with the BBC or multiplex 2 with channels 3 and 4 should have priority. If the third multiplex can get its act together, there is no reason why it should be behind the others.

§ Mr. Rowlands
Timing will be vital, as I shall show when we discuss my next amendment. However, I realise that amendment No. 250 is redundant, so I do not wish to press it.
I beg to ask leave to withdraw the amendment.