§ 3.31 p.m.
§ The Lord President of the Council (Viscount Whitelaw) rose to move, That this House takes note of the White Paper on The Development of Cable Systems and Services (Cmnd. 8866).
§ The noble Viscount said: My Lords, I beg to move that this House takes note of the White Paper on the development of cable systems and services. I felt that I owed it to your Lordships to open this debate myself and so to make my first major speech in this House on an important subject closely connected with the future of broadcasting and the exploitation of modern technology. The problem we face as a nation is to strike the right balance between these two requirements. It would be all too easy to miss the considerable opportunities presented by the development of cable systems through controversy between the competing interests of those who are most concerned with broadcasting standards and those who have their eyes set on exciting new technology.
§ As I have personally been closely concerned with developments in broadcasting in many different capacities since 1964, it would be idle to deny that throughout recent discussions my primary concern has been to maintain our broadcasting systems and standards. Indeed, the importance of ensuring that we continue to have the best broadcasting system in the world was well recognised by the noble Lord, Lord Annan, in his report. If I try to betray my past there is, in addition to the noble Lord himself, what might be described as a well-manned studio crew of ex- and existing chairmen of the BBC and IBA, together with others concerned with television, among your Lordships who I suspect would quickly cut off both sound and vision. I can assure all those noble Lords that I have no intention of going back on my past views now or in the future.
§ Against that background I want to start with some comments on the technology side. Cable technology is 654 with us. The question is not whether to adopt it, but how to adapt it to best advantage for our economy and way of life. We hear many different predictions about the future of cable and it is certainly not my intention today to persuade your Lordships that one particular view is more likely to be right than another. What is certainly true is that cable systems will be expensive to provide, and that if they are to have any chance of success the public will need to be convinced in significant numbers that it will be worth paying extra for the services cable provides. To what extent, and how quickly, the country will be cabled is impossible to forecast. By the same token, the effects it will have cannot be known. We should not at this stage believe that we can foresee every development and cover every eventuality in the legislative framework we lay down.
§ What needs to be emphasised is that, just as I have expressed uncertainty about the way cable will develop and about how successful it will turn out to be, the Government's White Paper is not grounded in a total conviction that cable can achieve the potential which it undoubtedly holds. The Government's conviction is rather, in the first place, that cable expansion offers a number of worthwhile and indeed exciting possibilities; and, secondly, that the conditions should be created in which those possibilities can best be realised by enabling privately financed development to respond to the market and giving it as much freedom as possible to meet the demands of the public.
§ If the market is found to be sufficient to justify the large-scale expansion of cable systems and cable services, the benefits could be considerable. We stand to gain much from the development of advanced technology, from the increased economic and job opportunities, from the enlarged choice which will be available to the consumer and from the development of an infrastructure which will pave the way to the world of the future in which business and work may be undertaken in new and very different ways.
§ But the need for balance in the public interest demanded that the way in which we as a nation handled this particular development had to take account of our system of broadcasting. It was for that reason that last year, when the Prime Minister's Information Technology Advisory Panel published a report drawing attention to the powerful economic and industrial arguments for the expansion of cable systems, I asked the noble Lord, Lord Hunt of Tanworth, to head an inquiry into the broadcasting policy aspects of the expansion of cable. With admirable expedition and remarkable thoroughness considering the tight timetable I imposed on him and his colleagues, the noble Lord, Lord Hunt, submitted his report to me last September. I hope he will forgive me if I attempt to summarise his conclusions in one sentence by saying that he found that, with some safeguards, cable television and our present broadcasting system could coexist without unnecessary inhibitions on the development of the former and without damage to the essentials of the latter. As I announced in another place in a debate on 2nd December last, the Government accepted the assessment of the noble Lord, Lord Hunt, and his colleagues, and the White Paper is based substantially on the recommendations made in the inquiry's report.655
§ The central proposals are therefore that a new public body should be set up to promote the development of cable, to grant franchises for the operation of cable systems in local areas and to exercise a certain amount of oversight over the services so provided. The franchising process will be designed to secure the best possible cable service for each area, with the cable authority giving careful examination to the applications of all those who bid for a franchise, and taking into account the views of local authorities and other local interests.
§ The Government, like the Hunt Inquiry, concluded that cable is sufficiently different from public service broadcasting for it to be inappororiate to add these functions to those already exercised by the IBA. The White Paper lays down a number of criteria which the cable authority will have to take into account, and these cover a range of matters which the Government consider it desirable for cable to provide. At the same time however the White Paper, like the Hunt inquiry, takes the view that there should be a minimum of requirements and obligations placed on cable operators. What can be offered may vary from area to area and it is right to leave it to the Cable Authority to secure the best service it can rather than to inhibit the spread of cable by laying down requirements which the market in some areas might not be able to bear.
§ There will be restrictions on those who can be cable operators, designed to prevent foreign control and control by political and religious groups. These are as recommended by the noble Lord, Lord Hunt, as are the restrictions limiting the participation of existing media interests.
§ I have so far stressed the Government's agreement with the proposals put forward by the Hunt inquiry, but it is right that I should also draw attention to those matters which the Government looked at in a slightly different way. We came to the conclusion, for example, that there were a number of programmes which it might he advantageous to a cable operator to offer to his customers on a pay-per-view basis—that is, by charging a fee to watch a specific programme—without in any way damaging the service available to ordinary television viewers.
§ We entirely accept, and consider it right, that cable should not be allowed to cream off popular events to the detriment of public service broadcasting—on which it is generally accepted a large part of the population will continue to depend for a long time to come. Therefore, the White Paper proposes safeguards to deal with that situation. Cable operators should in other cases have the freedom to use pay-per-view arrangements if they wish to do so.
§ In another aspect of the way services might be financed, the White Paper proposes a more restrictive approach than that which Lord Hunt's inquiry recommended. On grounds of equity, the Government decided that those programme channels which are similar to ITV should be limited to the same amount of advertising as is allowed on ITV. I think it would be widely regretted if we went the other way—if by allowing unlimited advertising on cable channels we found ourselves forced to permit unlimited advertising on ITV.656
§ In three other respects also, we thought it right to tighten the obligations on cable. The first is in observance of standards of taste and decency. The Government decided that it would not be right to allow cable special freedom to show programmes involving sex and violence, even if television sets were equipped with electronic locks. My experience as a father and grandfather leads me to doubt the Hunt inquiry's faith in the ability of parents to outwit children of this generation when it comes to mechanical and technological matters. As the White Paper says, so-called "adult channels" have no place on the sort of cable systems which the Government wish to see develop.
§ The second is in the use of home-produced material as opposed to the supply of unending cheap programmes from abroad. The Hunt Report proposed that the use of British programmes should be encouraged, but the White Paper goes further by placing specific obligations on the Cable Authority to ensure that a proper proportion of British material is included on cable channels.
§ The third is in relation to the obligation on cable systems to relay broadcasting services—the so-called must-carry rule. The White Paper proposes a requirement that all present and future broadcasting services should be carried on cable systems, including not only the free satellite services as recommended by the Hunt inquiry but subscription services as well.
§ This brings me to a matter that has caused some concern to the cable industry, who as well as being worried about the cable capacity which might be eaten up by the relay of services from satellites with their different transmission standards, would like the freedom to negotiate financial terms for carrying future services. These are issues that are being examined, but the general principle that future services by DBS should be equally available to those on cable and without it is one to which the Government attach importance.
§ The White Paper deals not only with the broadcasting implications that I have so far concentrated on but with the technical aspects of future cable systems. The approach of the Government in this field also is not to impose requirements and restrictions which might inhibit the speedy development of cable. The use of optical fibre is likely to offer many advantages in the future, but the Government's judgment is that the time is not ripe to insist on its use.
§ It will therefore he for cable providers, at least for the next few years, to make their own choice of material, Similarly, they will be free to lay cable systems in either tree-and-branch design or on a star switched basis. I trust noble Lords are familiar with these expressions: they are explained in the White Paper—with diagrams. However, the longer-term advantages, in the Government's assessment, of switched star technology, justify a requirement that underground ducts should be laid out in a star configuration in order to allow easy conversion to that kind of system in the future. Moreover, the licences granted by the Secretary of State for Trade and Industry for the running of telecommunications systems—not the Cable Authority's licence for the 657 operation of systems—will encourage the adoption of star switched technology by being for a term of 20 years in such cases, but for only 12 years in the case of tree-and-branch systems.
§ It is therefore on the basis of the Hunt inquiry's modified recommendations, as I have indicated, that the Government intend to introduce the Bill in this Session as promised in the Queen's Speech. Against that background, I now want to turn to the steps which the Government propose to take in advance of legislation being enacted. Naturally, the full-scale expansion of cable systems can take place only once the statutory framework is in place and the Cable Authority can operate the system which Parliament lays down. That, however, is probably still a year away. The Government took the view that to hold up cable expansion until then would stifle the interest which the last 15 months have created and nullify the development and planning of cable systems and of cable services—which have been entered upon so enthusiastically. It is important that we should not lose the momentum which has already been generated.
§ At the same time, to set things moving in advance of legislation involves its own problems. No one can be sure until an Act is passed what the future rules will be. The Cable Authority's powers and responsibilities will not be resolved or become effective until then. The Government concluded that a balance should be struck. We should so far as possible avoid pre-empting the future work of the Cable Authority. But we should take some very limited steps to set a small number of pilot projects moving. They would have to be projects which made a positive contribution to the application of advanced technology. They would be outside the kind of franchising process that the Cable Authority will eventually conduct and would have to accept that the rules under which they were allowed to operate were subject to change once the legislation was passed and the Cable Authority took its own decisions.
§ The Government recognised that there were constitutional arguments for limiting the extent to which legislation is anticipated in this way. For this reason, the Government decided that applications for pilot projects should not be invited until both Houses of Parliament had had an opportunity to express their views on the Government's proposals. After these debates, my right honourable friends the Home Secretary and the Secretary of State for Trade and Industry will invite applications for licences to undertake pilot projects and at the same time the Home Secretary will invite applications from existing cable operators for licences to provide additional programme services on their systems. By taking both of these steps we shall move ahead in a sensible way to capitalise on the commitment which industry has already shown to seize the opportunities which the Government are offering and to ensure that the kind of audience that might sustain successful cable programmes is built up as quickly as possible.
§ The steps are cautious ones. They will not pre-empt the decisions which Parliament will take in consideration of the Cable Bill. They are designed to minimise any interference with the strategy and policies to be adopted by the Cable Authority in due course. But they are evidence of the Government's 658 strong commitment to promoting the future success of British industry by freeing it from unnecessary constraints and enabling it to seek and satisfy new markets.
§ In preparing the Bill which we shall introduce, the Government will take most careful account of any proposals or suggestions put forward in this debate today. I also hope that it might be possible before Christmas to introduce the Bill in your Lordships' House since here there resides so much experience both of broadcasting and of technology.
§ I personally entered the Government's discussions on the future of cable with some anxiety. All my natural instincts and experience led me to fear that in our enthusiasm for technological advance we might be tempted as a nation to be careless of broadcasting standards and so be in danger of sacrificing much of value that has been built up through our broadcasting institutions. Thanks largely to the noble Lord, Lord Hunt of Tanworth, and his inquiry I am convinced that in this White Paper we have avoided these risks and have found a basis which will preserve the right balance and so will harness these developments, which have such great economic potential, in the best interests of the whole nation. I beg to move.
§ Moved, That this House takes note of the White Paper on The Development of Cable Systems and Services (Cmnd. 8866).—(Viscount Whitelaw.)