Broadcasting Bill

HL Deb 25 July 1990 vol 521 cc1474-533

4.47 p.m.

House again in Committee.

Clause 94 [Procedure to be followed by Authority in connection with consideration of application for national licences]:

Viscount Ullswater moved Amendments Nos. 272 and 273: Page 78, line 29, at end insert ("and").

Page 78, line 33, leave out from ("force") to end of line 35.

The noble Viscount said: Amendments Nos. 272 and 273 were spoken to with Amendment No. 109. I beg to move them both en bloc.

On Question, amendments agreed to.

Baroness Birk moved Amendment No. 274: Page 78, line 35, at end insert:

("(cc) where the proposed service consists wholly or mainly in the broadcasting of music, that a sufficient amount of time is given to the broadcasting of live music.").

The noble Baroness said: The amendment concerns the amount of live music which is to be broadcast on the radio. When the independent local radio system was first introduced in the early 1970s, the then Conservative Government were persuaded that the new stations should have an obligation to provide employment in music, since it was recognised that gramophone recordings of music would be a substantial proportion of the output. There was little likelihood that the commercial radio stations would provide much in the way of specially produced music. This obligation was therefore incorporated into franchise applications and radio stations that were given franchises entered into a commitment to spend not less than 3 per cent. of their net advertising revenue on the employment or engagement of musicians. This obligation has evidently worked well for both radio stations and musicians. On numerous occasions when radio stations have used the 3 per cent. obligation to sponsor live musical engagements, they have made a profit over and above the amount originally spent under the 3 per cent. obligation. Capital Radio, for instance, used the 3 per cent. allocation to sponsor the Wren Orchestra and its hugely acclaimed Capital Radio Jazz Festival. Even before the advent of the Broadcasting Bill, the lighter regulatory touch on radio has been apparent as the 3 per cent. commitment has not been enforced for the new radio stations such as Melody FM, Jazz FM and Kiss FM.

With the only restriction on the use of gramophone recordings being the cost of a Phonographic Performance Limited licence—PPL is the licensing arm of the British record industry—the new London-based 24 hours a day music stations such as Melody FM, and from September Kiss FM, rely totally on gramophone records for their music output. There is an exception with Jazz FM at present which broadcasts some live jazz performances. The three new national radio networks proposed under the Broadcasting Bill are likely to consist of two music-based channels. We discussed that matter earlier. Without any restrictions being imposed, they will almost certainly rely totally on recorded music for their output. That position is unfair to musicians. Further, the commercial pressures on the BBC as the public service broadcaster which at present provides proper employment for musicians and produces specially recorded music programmes will intensify as the commercial operators can be seen to obtain their music more cheaply. I believe that will have an unfortunate knock-on effect.

The commercial broadcasters are now making determined efforts to obtain records even more cheaply by continuing to press PPL for a reduction in its licence fee structure. The ordinary session musicians who perform on these records receive no further payment for their continued use on radio. They, not unnaturally, consider it grossly unfair that records made primarily for sale and supply to the public are now used 24 hours a day for supplying music on radio. They also consider it unjust that corporate businesses, for example the Hanson Trust which owns Melody FM, should seemingly exploit the musical performances of musicians without investing in their future. The Musicians' Union contends that a broad-based musical profession can only exist when musicians are given regular opportunities to perform. Broadcasting has always been such an outlet.

We must not forget the listeners. They also highly value and appreciate the original quality of live performances, whether of classical or popular music. This rich stream of music could be lost if economic considerations take priority over the choice of material used by the new services. I beg to move.

Lord Bonham-Carter

I wish to support the amendment which touches on an important problem. The other day we discussed the position of London as a centre of live musical performance. These radio stations are living off the skills and the work of musicians. In my view, they are gaining a short-term advantage if they do not consider that it is in their interests to employ the musicians in live performances. It is not a question of killing but rather of starving the goose that lays golden eggs for them in the shape of the substantial profits which the music stations make. Given the fact that the levy system which operated in the past has produced such admirable bodies as the Wren Orchestra, I consider it was an experiment that proved itself to be valuable and added to the cultural life of the nation. I hope therefore that the Government will look favourably upon the amendment.

Earl Ferrers

I can understand the anxiety of the noble Baroness and of the noble Lord, Lord Bonham-Carter, to try to help musical performers by their amendment. However, it would be too onerous a requirement to stipulate that a minimum amount of live music should be broadcast by music-based services. That could greatly increase their costs. Even in the case of the national services, this would be a prime example of jeopardising the development of new services by placing substantial and in some ways unnecessary burdens on them from the outset.

In the case of local music-based services, the requirement that is envisaged in the amendment would put pressure on applicants to make financially unviable proposals. I believe it was only yesterday that the Committee was concerned about the viability of local radio stations and commercial radio stations. If we try to place this kind of imposition upon them, it will give even more substance to the worries that have been expressed.

I believe the noble Lord, Lord Bonham-Carter, said that by using tapes or records, radio stations were exploiting musical performers. However, every time the music of an orchestra or individual is heard on the radio, that person or orchestra is publicised. Therefore there is a two-way traffic here. If we start to place these kinds of burden on commercial radio stations, which constitute a new enterprise, their costs will be increased enormously and they may become unviable.

Lord Jenkins of Putney

I should like to add a few words in support of the amendment that we are discussing. I believe it is the case that broadcasting or any reproduction of performance can be either an extremely good thing or completely destructive. I should give the example of the BBC whose contribution to music in this country has been tremendous. I do not think anyone would dispute the fact that the pre-eminence which this country now enjoys in the musical field is in no small degree due to the work of the BBC over the years, particularly in sound radio but also to some extent in television. The BBC has always recognised that it is not sufficient to broadcast performances which are recorded, and that the organisation that benefits from those performances has a duty to sustain the source of those performances. The BBC has fulfilled that obligation.

In this amendment we are suggesting that that obligation should equally be recognised in this new sphere. I should have thought that was a reasonable request. I do not believe that anything unreasonable has been suggested. The amendment does not stipulate how long a "sufficient amount of time" should be. However, it at least places some obligation upon an organisation. One of the reasons for the enormous hostility shown towards pirate radio stations is that they did not pay anything for the music that they pumped out. Pirate radio stations were entirely destructive regarding live music. Live music was the source of what those stations were transmitting.

I hope that the Minister will have another look at this matter. I hope he will consider that what the amendment proposes is not unreasonable, dogmatic or doctrinal. The amendment merely tries to ensure that the source of the material that is transmitted should not be ignored. Commercial radio is moving into a sphere of considerable importance and it ought to accept some of the obligations which its great competitor the BBC has always recognised.

5 p.m.

Lord Colwyn

Perhaps I may say a few words in support of my noble friend the Minister. The noble Baroness, Lady Birk, mentioned Jazz FM. I am a director of that company. It is our policy to use live music wherever possible. However, it is expensive. It is not cheap to record at live venues. It is more expensive than playing records.

The main debate on PPL and needle time will take place tomorrow but, by way of example, I remind the House that this country represents about 7 per cent. or 8 per cent. of the world record market, and the international record industry has been able to extract from the UK what could be in excess of 30 per cent. of all world broadcast royalties. That is something that we should like to put right at a later stage of the Bill.

Lord Airedale

It may be that one radio station cannot afford to employ live musicians just as one local newspaper cannot afford its own foreign correspondent in China. However, in the same way as newspapers share foreign correspondents, surely radio stations can share live musicians and overcome the problem in that way.

Earl Ferrers

That is an ingenious device. I do not understand how a local radio station operating in the South West can share a musician with a radio station operating in the North East.

Lord Airedale

They would share the cost of putting on a concert. That concert would be available to all of them, as recorded, to be broadcast. The fact that it was recorded when they broadcast it would not affect the position. They would have employed live musicians to provide the recording.

Earl Ferrers

The debate is becoming more convoluted. The noble Lord, Lord Airedale, said that it is perfectly acceptable to play music that is recorded provided that one has employed the musicians who recorded it in the first place.

The noble Lord, Lord Jenkins, said that there was nothing doctrinal about the requirement. I believe that it is doctrinal. One would be telling all new local, commercial and community radio stations that they must employ a certain number of live musicians. The noble Lord compared the situation with the BBC and said that the BBC had done an enormous amount for musicians. That is true, but for years the BBC had a monopoly of broadcasting and a licence fee to fall back on. With that licence fee it could afford to employ live musicians and orchestras. In this case we are talking about a multitude of new services—possibly 300 or so—all operating on different wavebands in small communities. Some may operate within a radius of five to 10 miles and others over longer distances. If this type of requirement is placed upon them, as my noble friend Lord Colwyn said, it will increase their costs enormously.

There was no point in noble Lords saying yesterday that they were very worried about how the radio stations would be viable if in the next breath they say that they have to employ live musicians, which would put up their costs.

Lord Winstanley

I believe that I am right in saying that the clause deals with national commercial radio and not with local commercial radio.

Earl Ferrers

That may well be so, but these new enterprises have to be allowed to get off the ground without being inhibited too greatly.

Lord Ardwick

The noble Lord has talked of the employment of musicians as if they were to be on the staff. The amendment does not say that; it refers to the broadcasting of live music. That is quite different from having an expensive resident orchestra.

Earl Ferrers

I quite see that. However, if the noble Lord, Lord Ardwick, were the licensee of a radio station and employed the London Symphony Orchestra he would find it very much more expensive than providing a tape.

Lord Ardwick

There is no need to go to such lengths. To employ four or five musicians occasionally would be sufficient. That would be live music. All my life, since the advent of the "talkies" when musicians lost their jobs in the cinemas, musicians have had a hard life. There are no rank-and-file musicians driving six-cylinder cars along Whitehall. It is a life that is fraught with difficulties. Musicians fall prey to physical difficulties which affect their limbs, and so on. One always has to have sympathy for them.

Earl Ferrers

I have enormous sympathy for them. The noble Lord, Lord Ardwick, is quite right to pursue their lobby on their behalf. However, there are two sides to the story. The introduction of such a requirement would be very expensive for the new organisations.

I come back to the point that every time music is played some form of royalty should be paid. I should be very surprised if there is no advantage to the players of the music because every time their music is played it is to their advantage.

Baroness Birk

It was unfair of the Minister to say in reply to my noble friend Lord Ardwick that he was quite right to pursue their lobby. It is not just a case of pursuing a lobby. It is true that the Musicians' Union is concerned about the situation, and with good reason. However, the objective is to protect live music so that we do not reach a situation in this country in which everything is recorded and there is no live music.

As has been pointed out, the amendment does not require that a specific amount of time should be devoted to live music. If the Minister was prepared to say that he would look at the matter again, I should be happy even to change the phrase "a sufficient amount of time" so that we keep the important element of live music in radio broadcasting. This is the time to do it—in this Bill. Otherwise are we to enter decades in which children will not have the opportunity to listen to live music and there will be no incentive for people to take up music as a profession? That would he a very bleak outlook.

If the Minister is not prepared to take the matter any further, then I shall have to ask leave to withdraw the amendment. I do not know whether he intends to stand up.

Earl Ferrers

As the noble Baroness was about to withdraw the amendment if I did not stand up, that gave me a very great incentive not to do so. Of course I shall take note of what the noble Baroness said. However, I really cannot give her any indication that I am likely to change my mind, even though I understand her philosophy. In a way this is similar to the time when television came along and people said that all the cinemas would close. However, actors still find other work, on television and elsewhere.

I believe that it was the noble Lord, Lord Bonham-Carter, or his noble friend who said that the clause deals with national radio. Amendment No. 274 deals with national radio but Amendment No. 297C, which we are also debating, deals with local radio.

I do not believe that I shall be able to help the noble Baroness because when one is trying to encourage small organisations to start up, placing such a liability on them would weigh the balance against their viability. I do not see how one can suggest to a local community radio station, which might be set up to put forward the views of certain ethnic minorities, that it should broadcast a certain amount of live music. That would be an intolerable imposition.

Baroness Birk

I beg leave to withdraw the amendment.

Amendment, by leave, withdrawn.

Viscount Ullswater moved Amendment No. 275: Page 73, line 38, leave out ("to (c)") and insert ("and (b)").

The noble Viscount said: I spoke to this amendment together with Amendment No. 109. I beg to move.

On Question, amendment agreed to.

Clause 94, as amended, agreed to.

Clause 95 [Award of national licence to person submitting highest cash bid]:

Earl Ferrers moved Amendment No. 275A: Page 79, line 9, at end insert ("; and where it appears to the Authority, in the context of the licence, that any circumstances are to be regarded as exceptional circumstances for the purposes of this subsection, those circumstances may be so regarded by them despite the fact that similar circumstances have been so regarded by them in the context of any other licence or licences.").

The noble Earl said: This amendment was spoken to with Amendment No. 109—I apologise, in the desire to get along quickly, I went a little too fast. This amendment is a technical but important amendment. It follows Clause 17(4) and makes clear that the authority may address the question of whether exceptional circumstances apply in relation to each national franchise application individually. I beg to move.

Baroness Birk

I apologise to the Committee for not having realised that the amendment would come up for discussion so soon. This is a very unfortunate amendment. It gives different definitions of "exceptional circumstances" for radio without explaining them. It weakens the situation for radio compared with television and the ITC. It gives the authority no direction when defining exceptional circumstances, allowing it to interpret them in different ways for different licences. It could mean that the speech-based channel is awarded to a higher quality bidder while the popular music channel is awarded to a bidder who could target a higher proportion of listeners in, say, social classes A, B and C.

It is not an equitable and transparent way of awarding licences. If the ITC is required to apply a single and defined interpretation of exceptional circumstances, there is no reason why the Radio Authority should not be in the same situation. We return to the point that the Government refuse to accept quality requirements for anything in the Bill if they can possibly avoid it. It is therefore even more important that the Bill should not be weakened further in this way.

Baroness Ewart-Biggs

I apologise to the Committee for rising straight after my noble friend. I should like to say a few brief words in support of her remarks. We feel rather worried that already the Radio Authority does not have to apply any quality requirements to the applicants for the three commercial services. This amendment further weakens the Bill by not giving the authority any direction in defining exceptional circumstances and allowing it to interpret exceptional circumstances in different ways for different licences.

It is a fact that in relation to television the viewers' preferences were extensively discussed, but we have said very little about listeners' views in relation to sound broadcasting. It would seem unwise to neglect those views. After all, at the end of the day it is the listeners who count. Even the most superficial research among radio listeners shows that they have definite quality requirements. They have priorities about what they wish to hear on radio which should be taken into consideration when deciding the make-up of the three new national radio services.

When discussing radio with people, one recognises that there is a thread running through all age groups which marks a preference for more speech-oriented programmes, plays and discussions. There is also a desire for more live music. Those preferences are expressed both in the older age group and among people in their 20s and 30s. Many listen to their car radios. One could say that for them radio has a very powerful opinion-forming influence. Even among young people there is a very distinct group which wants what the young people describe as a more "with it" Radio 4-type programme. Again, they would like to have something of substance. It is important to remember that a wish for quality and substance has been expressed by all the age groups. There is also great loyalty and devotion to radio, which has not been much discussed in this Bill.

The Government have made out that radio is of less importance than television. One often feels that to many people it is of more importance than television. But that is not reflected in the provisions of the Bill. I believe that there should be greater protection for listeners when the three commercial services are chosen. It is a pity that this government amendment further weakens the Bill in that regard. I look forward to hearing the Minister's comments in response to what my noble friend and I have said.

5.15 p.m.

Lord Thomson of Monifieth

I am genuinely puzzled by the purpose of this amendment. As we keep repeating, the heart of the Bill is a bidding system. We sought to modify that bidding system with a reference to exceptional circumstances and the Government went along with that desire in the case of television contracts. We were very happy about that, even though they did not go so far as we wished.

I think I am right in saying that this amendment applies to the national radio contracts. Both the noble Baronesses said that it seems to give the Radio Authority a blank cheque in defining exceptional circumstances. As I am critical of a bidding system, I am basically in favour of the authority having the right to give the contract to someone other than the highest bidder where there are exceptional circumstances. However, this provision seems to be a blank cheque. I simply do not understand what lies behind it.

Earl Ferrers

There is a certain amount of confusion. I shall do my best to try to straighten the matter out. It is not a question of giving a blank cheque. Contrary to what was said by the noble Baronesses, we are simply trying to introduce uniformity. The amendment follows exactly the wording of Clause 17(4). It makes clear that the same set of exceptional circumstances may occur more than once. In other words, it means that exceptional circumstances would not cease to apply in relation to applications for the third national service simply because the authority had invoked the exceptional circumstances provision in the case of the two preceding national radio competitions. It does not give a different definition of exceptional circumstances. It offers the same clarification as for television in Clause 17(4).

The amendment is being used to reopen the quality debate which is not affected by it at all. The purpose is a narrow one. The amendment simply repeats the words which apply to television in Clause 17 and applies them to radio in this clause.

On Question, amendment agreed to.

Viscount Ullswater moved Amendment No. 276: Page 79, line 41, leave out ("(subject to section 96)").

The noble Viscount said: I spoke to this amendment with Amendment No. 109. I beg to move.

On Question, amendment agreed to.

Viscount Ullswater moved Amendment No. 277: Page 80, line 5, at end insert:

("(10) In a case where the licence has been awarded to any person by virtue of the operation of this section, in accordance with any provision of this Part, on the revocation of an earlier grant of the licence, subsection (9) shall have effect as if—

1. (a) paragraph (b) were omitted; and
2. (b) the matters specified in that subsection included an indication of the circumstances in which the licence has been awarded to that person.").

The noble Viscount said: I spoke to this amendment with Amendment No. 135. I beg to move.

On Question, amendment agreed to.

Clause 95, as amended, agreed to.

[Amendment No. 278 not moved.]

Clause 96 [Holder of national licence to give security against failure to maintain proposed service]:

Viscount Ullswater moved Amendment No. 279: Page 80, line 6, leave out subsections (1) to (3).

The noble Viscount said: I spoke to this amendment with Amendment No. 109. I beg to move.

The Deputy Chairman of Committees (Lord Alport)

I have to advise the Committee that if the amendment is agreed to I cannot call Amendment No. 280.

On Question, amendment agreed to.

[Amendment No. 280 not moved.]

Viscount Ullswater moved Amendment No. 281: Page 80, line 30, leave out ("revoke the licence,") and insert ("serve on him a notice revoking the licence as from the time the notice is served on him,").

The noble Viscount said: I spoke to this amendment with Amendment No. 135. I beg to move.

On Question, amendment agreed to.

Viscount Ullswater moved Amendments Nos. 282 and 283: Page 80, line 31, leave out from beginning to ("and") in line 33.

Page 80, line 43, leave out subsections (6) to (10) and insert: ("(6) Where the Authority revoke a national licence under this section or under section 104, they shall serve on the licence holder a notice requiring him to pay to them, within a specified period, a financial penalty of the prescribed amount. (7) In subsection (6) "the prescribed amount" means—

1. (a) 7 per cent. of the qualifying revenue for the last complete accounting period of the licence holder (as determined in accordance with section 97(2) to (6)); or
2. (b) where his first complete accounting period has not yet ended, 7 per cent. of the amount which the Authority estimate would have been the qualifying revenue for that accounting period (as so determined).

(8) Any financial penalty payable by any body by virtue of subsection (6) shall, in addition to being recoverable from that body as provided by section 115(4), be recoverable by the Authority as a debt due to them from any person who controls that body.").

The noble Viscount said: I spoke to Amendments Nos. 282 and 283 with Amendment No. 109. I beg to move them en bloc.

On Question, amendments agreed to.

Clause 96, as amended, agreed to.

Clause 97 [Additional payments to be made in respect of national licences]:

[Amendment No. 284 not moved.]

Viscount Ullswater moved Amendments Nos. 285 to 292: Page 81, line 36, after ("him") insert ("or by any connected person").

Page 81, line 39, leave out ("by him"). Page 81, line 43, after ("holder") insert ("or any connected person"). Page 81, line 44, leave out ("him") and insert ("the licence holder"). Page 82, line 2, leave out ("the licence holder and") and insert:

1. ("(a) the licence holder or any connected person, and
2. (b) ").

Page 2, line 3, after ("holder") insert ("or any connected person"). Page 82, line 12, leave out ("the licence holder, in any accounting period of his,") and insert (", in any accounting period of the licence holder, the licence holder or any connected person"). Page 82, line 19, leave out ("him") and insert ("the licence holder or the connected person, as the case may be").

The noble Viscount said: I spoke to Amendments Nos. 285 to 292 with Amendment No. 145. I beg to move them en bloc.

On Question, amendments agreed to.

Viscount Ullswater moved Amendment no. 293: Page 82, line 44, leave out subsection (10).

The noble Viscount said: I spoke to this amendment with Amendment No. 109. I beg to move.

On Question, amendment agreed to.

Clause 97, as amended, agreed to.

Earl Ferrers moved Amendment No. 293A: After Clause 97, insert the following new clause: ("Restriction on changes in control over holder of national licence

.—(1) Where— (a) any change in the persons having control over—

1. (i) a body to which a national licence has been awarded or transferred in accordance with this Part of this Act, or
2. (ii) an associated programme provider,

takes place within the relevant period, and (b) that change takes place without having been previously approved for the purposes of this section by the Authority, then (subject to subsection (5)) the Authority may, if the licence has not yet been granted, refuse to grant it to the body referred to in paragraph (a) (i) above or, if it has already been granted, serve on that body a notice revoking it. (2) In subsection (1)— "associated programme provider", in relation to such a body as is mentioned in paragraph (a) (i) of that subsection, means any body which is connected with that body and appears to the Authority to be, or to be likely to be, involved to any extent in the provision of programmes for inclusion in the licensed service; and "the relevant period", in relation to a national licence, means the period beginning with the date of the award of the licence and ending on the first anniversary of the date of its coming into force; and paragraph 3 in Part I of Schedule 2 to this Act shall have effect for the purposes of this subsection as if a body to which a national licence has been awarded but not yet granted were the holder of such a licence. (3) The Authority shall refuse to approve for the purposes of this section such a change as is mentioned in subsection (1) (a) if it appears to them that the change would be prejudicial to the provision under the licence, by the body referred to in subsection (1) (a) (i), of a service which accords with the proposals submitted under section 93(3)(a) by that body (or, as the case may be, by the body to which the licence was originally awarded). (4) The Authority may refuse so to approve any such change if, in any circumstances not falling within subsection (3), they consider it appropriate to do so. (5) The Authority shall not under subsection (1) refuse to grant a licence to, or serve a notice on, any body unless they have given it a reasonable opportunity of making representations to them about the matters complained of. (6) Where under subsection (1) the Authority refuse to grant a licence to any body, section 95 shall have effect as if that body had not made an application for the licence; and, where under that subsection they serve on any body a notice revoking its licence, subsections (5) and (6) of section 104 shall apply in relation to that notice as they apply in relation to a notice served under subsection (3) of that section.").

The noble Earl said: I spoke to this amendment with Amendment No. 163A. I beg to move.

[Amendments Nos. 293AA to 293AE, as amendments to Amendment No. 293A, not moved.]

On Question, Amendment No. 293A agreed to.

Clause 98 [Applications for other licences]:

[Amendments Nos. 293B and 294 not moved.]

Lord Ardwick moved Amendment No. 295: Page 83, line 18, after ("provided") insert ("including news").

The noble Lord said: The amendment proposes that applicants' proposals for local radio licences must include news programmes. We do not suggest what those news programmes should be. We are not thinking in elaborate terms, but we believe that there should be some news programmes. It should be an absolute and explicit requirement on all local radio stations to provide some local news programmes.

At present the Bill requires only a diverse and broad range of local programmes with no guarantee for specific programmes. While it may be right that in the Bill local services are not required to carry sports, children's or religious programmes, and so on, the importance of local news in every area should surely make it a prerequisite for all services. It would not be possible to cater for local tastes without news programming. I beg to move.

Earl Ferrers

The noble Lord, Lord Ardwick, says that it should be absolute and explicit that local broadcasters should carry news. Part III deliberately avoids imposing any requirement on the Radio Authority licensees to carry news and current affairs. I see no reason why, say, a jazz or country and western station should have to do so. The indications are that many services will wish to carry news, and some listeners like it. But I do not believe that there is any reason to require the Radio Authority's licensees to have to mirror the public service obligations of the BBC radio stations. It is far preferable to base the Radio Authority licensing on what listeners want and on the extension of listener choice.

In addressing questions such as this it is important not to be misled by false parallels with television. In British terrestrial television at present we have a genuine duopoly. ITV and Channel 4 broadly match BBC1 and BBC2 in terms of both coverage and programming obligations. There is no equivalent for radio. For many people the most familiar radio services are the BBC national networks, Radios 1 to 4 (and soon 5). For these there is as yet no independent equivalent. The Bill provides scope for up to three independent national services; but they must establish themselves, and that will take time.

There are of course a number of excellent independent local radio services. But they do not have universal coverage, and any networked or syndicated programming which they take has to fit in with their local character. For radio it is a mistake to imagine that, if the BBC has a programming obligation, the independent sector should necessarily have it too. It is far better to take the BBC networks (and the BBC local services, which also have public service obligations) as a bedrock, which enables independent services to be more lightly regulated and to concentrate on adding something different for listeners. That approach will ensure both that there will be more independent services than under heavier regulation and that they will expand in a way which genuinely adds to listener choice. The Government's approach to news on independent radio is entirely consistent with this philosophy.

It may well be that the desire of the noble Lord, Lord Ardwick, will bear fruit and that local radio will find it prudent and proper to carry news. However, I do not think that it should be obliged to do so.

Lord Ardwick

It would probably be prudent. However, when we talk of radio news in a local station we do not refer to any vast enterprise. We are not talking of anything expensive. We refer to an arrangement with a local paper to supply spot news, if a disaster or some such event occurs. There might be some arrangement with ITN to have the national news headlines. Those are the terms in which we are thinking.

Lord Bonham-Carter

One cannot help but support the noble Lord on this matter. The noble Earl said that he is adding to consumer choice by local radio stations not broadcasting something. It is a very odd way of adding to consumer choice by not doing something. One cannot choose what is not available.

As usual we fall back on the public service obligation of the BBC. Whenever anything is missing from commercial radio we are told that it will be picked up by the BBC. It will walk behind commercial television and radio picking up ill-considered items which the commercial companies do not believe will pay.

That is a formula for lower quality across the board and that is our objection to the whole Bill. I do not suspect that these amendments will cure it of that intrinsic disqualification. However, this is a classic example of the Government saying, "We shall not ask them to do anything unless it pays in hard cash and if that item is necessary for the public the BBC will do it"

5.30p.m.

Lord Airedale

Let us suppose that a local road is blocked by an overturned vehicle and that the police inform the local radio station of the fact. Is that an item of news and, if so, ought not the local radio station be required to broadcast it?

Earl Ferrers

It might well be an item of news but whether or not to broadcast it would be a matter for the local radio station. The noble Lord, Lord Airedale, wishes to place an imposition on the stations to broadcast all such news. That is not right because there are many other avenues where such news will be broadcast. It may be that the local radio station will wish to do so, but we are discussing the proposal to impose an obligation.

I find the argument put forward by the noble Lord, Lord Bonham-Carter, to be quite extraordinary, and not for the first time. He asked the question: how do you add to consumer choice by omitting something? Of course, by omitting something you allow something else. If the noble Lord, Lord Bonham-Carter, were to have dinner and to take the last helping of chicken it would mean that someone else would be denied it. However, if in his generosity he decided to take the fish the chicken would be available for someone else. To say that if one omits something one is denying freedom of choice is an extraordinarily narrow point of view. One is not doing so—

Lord Bonham-Carter

One would not be adding anything.

Earl Ferrers

One would be adding to the consumer choice of the person following, but I do not wish to go too far with that analogy. The noble Lord, Lord Airedale, expressed anxiety about whether the local radio station should transmit the fact that the road is blocked. A commercial radio station might do so, but the BBC would do so because it must provide news.

Lord Thomson of Monifieth

I am provoked to speak because the answers that the Minister has given remind me of a gentleman whom I knew in the independent local radio sector. He complained bitterly about the regulatory system which sought to impose public service standards on the holders of independent local radio stations. He had once run a local radio station in the United States. He said that it was marvellous and all that he did was to send a chap out to the airport to pick up tapes for the programmes. He took them back to the station, put them on and all he had to do all day was insert local advertisements. That was his blissful idea of local radio and the Government appear to be bringing local radio down to that level.

Earl Ferrers

The noble Lord, Lord Thomson, is mistaken. An applicant might go to the Radio Authority and say, "I want to have a radio licence. I shall be transmitting all the records and tapes that I shall receive from Heathrow airport. I shall collect them and bung them on". However, they would not be covering the variety of interests for which they must cater. If that proposal were contained in the application but another application did not contain such a mundane attitude, that other applicant would be awarded the licence.

Lord Moyne

I am inclined to sympathise with the Opposition. It appears to be a mild obligation to impose on broadcasters. It is a small item of public service which they should have in mind and be obliged to have in mind.

Earl Ferrers

I do not wish to interrupt the vibes which appear to be crossing between the two Opposition Front Benches. I thought that I heard the noble Lord, Lord Thomson, cajoling the noble Baroness to take immediate action. Perhaps I may interrupt while they are making up their minds in order to refer to the point made by my noble friend Lord Moyne. In agreeing with the noble Baroness, he is saying that every single radio station, even if it were serving a small community within a radius of five miles, should be obliged by law to carry news items. That is going too far.

Baroness Birk

It was never my intention to take the matter to a vote. However, it appears that support is greater for news on local radio stations than for the Minister's response. He is in the minority as regards Members who have spoken. I realise that that does not necessarily mean anything when the Division bells ring. The cohorts who have not heard a word of our debate will stream in. Nevertheless, I wish to test the opinion of the Committee.

Earl Ferrers

Before the noble Baroness does so, perhaps I may explain that the silence from the Benches behind me probably shows a generous desire not again to keep the noble Baroness here until 1.15 a.m.

Baroness Birk

Members from all sides of the Committee have spoken in support and heads were nodding like mad behind the Minister.

5.36 p.m.

On Question, Whether the said amendment (No. 295) shall be agreed to?

Their Lordships divided: Contents, 67; Not-Contents, 107.

Division No. 1
CONTENTS
Addington, L.	Jenkins of Putney, L.
Airedale, L.	Lockwood, B.
Ardwick, L.	Longford, E.
Aylestone, L.	Lovell-Davis, L.
Banks, L.	McGregor of Durris, L.
Birk, B.	McNair, L.
Blackstone, B.	Masham of Ilton, B.
Blease, L.	Mason of Barnsley, L.
Bonham-Carter, L. [Teller.]	Molloy, L.
Carmichael of Kelvingrove, L.	Morris of Castle Morris, L.
Carter, L.	Moyne, L.
Castle, B.	Mulley, L.
Cledwyn of Penrhos, L.	Nicol, B.
Clinton-Davis, L.	Ogmore, L.
Croham, L.	Oram, L.
David, B.	Peston, L.
Davies of Penrhys, L.	Phillips, B.
Dean of Beswick, L.	Pitt of Hampstead, L.
Dormand of Easington, L.	Rea, L.
Ewart-Biggs, B.	Ritchie of Dundee, L.
Foot, L.	Robson of Kiddington, B.
Galpern, L.	Seear, B.
Gladwyn, L.	Serota, B.
Glasgow, E.	Strabolgi, L.
Glenamara, L.	Swann, L.
Graham of Edmonton, L. [Teller.]	Thomson of Monifieth, L.
	Tordoff, L.
Hampton, L.	Underhill, L.
Hatch of Lusby, L.	Walston, L.
Hirshfield, L.	White, B.
Hollis of Heigham, B.	Williams of Elvel, L.
Howie of Troon, L.	Willis, L.
Jeger, B.	Winchester, Bp.
Jenkins of Hillhead, L.	Winstanley, L.

NOT-CONTENTS
Aldington, L.	Flather, B.
Alport, L.	Fraser of Carmyllie, L.
Annan, L.	Gisborough, L.
Ashbourne, L.	Grimthorpe, L.
Auckland, L.	Haddington, E.
Balfour, E.	Hardinge of Penshurst, L.
Beaverbrook, L.	Harmar-Nicholls, L.
Belhaven and Stenton, L.	Havers, L.
Beloff, L.	Henley, L.
Belstead, L.	Hesketh, L.
Bessborough, E.	Hives, L.
Blake, L.	Howe, E.
Blyth, L.	Hylton-Foster, B.
Boardman, L.	Ironside, L.
Borthwick, L.	Jenkin of Roding, L.
Boyd-Carpenter, L.	Joseph, L.
Brabazon of Tara, L.	Killearn, L.
Brookeborough, V.	King of Wartnaby, L.
Brougham and Vaux, L.	Long, V.
Butterfield, L.	Lonsdale, E.
Buxton of Alsa, L.	Lothian, M.
Caccia, L.	Lucas of Chilworth, L.
Caithness, E.	Lurgan, L.
Campbell of Gray, L.	Mackay of Clashfern, L.
Carnegy of Lour, B.	Macleod of Borve, B.
Carnock, L.	Mancroft, L.
Carr of Hadley, L.	Margadale, L.
Cavendish of Furness, L.	Marsh, L.
Clitheroe, L.	Merrivale, L.
Colnbrook, L.	Mersey, V.
Colwyn, L.	Milverton, L.
Cork and Orrery, E.	Montague of Beaulieu, L.
Cullen of Ashbourne, L.	Morris, L.
Davidson, V. [Teller.]	Mottistone, L.
Dilhorne, V.	Mountevans, L.
Downshire, M.	Munster, E.
Elliot of Harwood, B.	Murton of Lindisfarne, L.
Elliott of Morpeth, L.	Napier and Ettrick, L.
Elton, L.	Orkney, E.
Faithfull, B.	Orr-Ewing, L.
Ferrers, E.	Pearson of Rannoch, L.

Pender, L.	Swinfen, L.
Quinton, L.	Swinton, E.
Reay, L. [Teller.]	Thomas of Gwydir, L.
Renwick, L.	Tollemache, L.
Rodney, L.	Tryon, L.
St. John of Fawsley, L.	Ullswater, V.
Sanderson of Bowden, L.	Vaux of Harrowden, L.
Selkirk, E.	Wade of Chorlton, L.
Sharples, B.	Walpole, L.
Stockton, E.	Wedgwood, L.
Stodart of Leaston, L.	Westbury, L.
Strathclyde, L.	Wharton, B.
Sudeley, L.

Resolved in the negative, and amendment disagreed to accordingly.

5.44 p.m.

[Amendment No. 296 not moved.]

Lord Colwyn had given notice of his intention to move Amendment No. 296A: Page 83, line 42, leave out from ("unless") to end of line 45.

The noble Lord said: I was under the impression that I had spoken to this amendment last night. However, as the grouping is rather complicated, if I find that I have made an error and I have not spoken to it, then perhaps I can return to the matter at a later stage.

[Amendment No. 296A not moved.]

Viscount Ullswater moved Amendment No. 297: Page 83, line 47, leave out ("under subsection (5)") and insert ("in a case where, in accordance with subsection (5), no notice is to be published under subsection (1)").

On Question, amendment agreed to.

[Amendment No. 297A not moved.]

Lord Bonham-Carter moved Amendment No. 297AA: Page 84, line 6, at end insert:

("(8) The Authority shall publish its decision on which applicant has been successful or its decision not to award a licence, and the detailed reasons for its decision, in such form as it sees fit.").

The noble Lord said: The purpose of this amendment is to require the Radio Authority to publish decisions and reasons for decisions on applications for a licence. That will ensure that all information, financial and otherwise, will be made available to the public on request. That has been the established practice of ILR and continued with the incremental contract initiative. It would seem a great pity if such a useful practice was abandoned by the new Radio Authority under the Bill.

It seems desirable that bodies with regulatory functions assigned to them by Acts of Parliament should, unless there are very strong reasons to the contrary, conduct their business as openly as possible and make known as widely as possible their decisions and the reasons for them. As I understand it, that would not necessarily take place under Clause 98 as it stands.

The normal objection to providing such information is commercial confidentiality. That has never been a problem in the past and I do not see why it should be a problem in the future. Information and decisions made available to the public provide an invaluable guide as to how the Act is working for both the public and prospective applicants for licences. A series of precedents is established which tells people how licences are awarded.

Publication of reasons for decisions helps and improves the quality of decisions. It has an additional advantage which should not be neglected. People whose applications fail often feel resentment. They often explain the failure by various rationalisations to the detriment of the body responsible for that failure. If the reason is explained openly, it assists in preventing bitterness, although it will not always do so. I believe that it is legitimate for unsuccessful applicants to know both why they were unsuccessful and why the successful applicant was successful.

On the basis of past practice and open government, and as a means of providing a guide to the way the Act works and mollifying the feelings of those who have failed, I urge the Government to accept the amendment. I beg to move.

Baroness Ewart-Biggs

I support the amendment. It seems right, for the reasons given by the noble Lord, Lord Bonham-Carter, that the Radio Authority should publish in detail its reasons for deciding to award a local licence. The Bill requires the Radio Authority to publish its reasons for awarding a national licence to an applicant. Therefore, it is logical that the same should apply to local radio services.

A very important point raised by the noble Lord, Lord Bonham-Carter, was that the provision brings the whole process into public view; it makes the public feel more knowledgable and part of the system. It means that the authority will have to take care to be as honest and open as it should be. I cannot see any reason why the amendment should be rejected. I look forward to hearing what the Minister has to say.

Earl Ferrers

I readily concede that there is a certain attractiveness to the amendment. As the noble Lord, Lord Bonham-Carter, and the noble Baroness, Lady Ewart-Biggs, said, it should be open for all to know what the position is. The amendment is concerned with the reasons for the decision, and not with the disclosure of the applicant's business or financial plans. Those would remain confidential under the Bill.

If the amendment were incorporated in the Bill it would place a great burden upon the authority. It would require the authority to explain in detail the reasons for its licensing decision in each and every case on which it had to make one, both to those who were successful and to those who were unsuccessful. In due course we expect the Radio Authority to issue several hundred radio licences. That means that there will be many more applicants for those several hundred licences, as well as many other forms of radio licence—such as satellite radio, special event radio and university radio services—to which the amendment would also extend.

To have to explain its decision on each and every occasion would greatly add to the task and the cost of the authority. The overall effect would extend the time it took to grant a licence, which inevitably would increase licence fees. For some kinds of Radio Authority licence, such as satellite radio services and licensable sound programme services, the licensing process will not be competitive; it will be more in the nature of a certification process. In those cases a detailed statement of the reasons for the licensing decision would not necessarily be illuminating.

If the unsuccessful applicants wish to write to the radio authority to inquire why they were unsuccessful, there is no reason that those explanations should not be given. However, if the amendment was agreed to,—for the very good reasons explained by the noble Lord, Lord Bonham-Carter—it would add considerably to the burden on the authority.

Lord Bonham-Carter

That is a very unsatisfactory reply. Perhaps I may make a suggestion to the noble Earl. Would it be within the capacity of the licensing authority to explain the reasons it gave the licence to the successful applicant? That would not be a severe burden. If one has considered a lot of applications and come to the conclusion that one should be successful, there must be a reason for that decision. It is not a severe burden simply to put those reasons in writing and communicate them to anyone who requests them. That would go a considerable way to providing a kind of guide to the way in which the Act was being administered, and some way towards mollifying those who had failed if they knew why someone else had succeeded.

The noble Earl's suggestion that it would create a burden on the authority if the Bill was modified in the way I suggested, does not apply. Perhaps the Minister will consider my suggestion?

Earl Ferrers

My immediate response is that it would be more helpful if the Radio Authority told those who had not succeeded why they had not succeeded rather than telling those who had succeeded why they had succeeded. The trouble with the second course is that one would have to reply to more people than would if one took the course suggested by the noble Lord, Lord Bonham-Carter.

I shall certainly consider his point. There is a genuine issue of openness. I can only say—I hope the noble Lord will not regard this as de minimis—that there is the other side to the coin; we do not want to oblige the Radio Authority to have to write to hundreds of people explaining why they did not receive the licence. The basic reason is that somebody else produced better programme suggestions.

Lord Bonham-Carter

I am grateful to the noble Earl for agreeing to think about the matter, and I look forward to seeing the results. I beg leave to withdraw the amendment.

Amendment, by leave, withdrawn.

Clause 98, as amended, agreed to.

Clause 99 [Special requirements relating to grant of local licences]:

[Amendments Nos. 297B and 297C not moved.]

Clause 99 agreed to.

Clause 100 [Requirements as to quality and coverage of national and local services]:

Lord Bonham-Carter moved Amendment No. 297D: Page 84, line 45, leave out subsection (4) and insert—

("(4) Where the Authority is considering whether to authorise the holder of a licence, by means of a variation of his licence to that effect, to provide the licensed service for any additional area or locality falling outside the area for which that service has previously been licensed to provide, they shall first carry out their duties under section 98(1) (a) and (b) and section 98(2) (a)—(d).").

The noble Lord said: The purpose of Amendment No. 297D is to prevent existing or future stations being able to increase their broadcast area without first going through an open and fair application process. The concern is that Clause 104, if unamended, would allow the Radio Authority to continue the practice of the IBA of extending licence areas of existing operators even though there is evident interest from community groups in a specific region within that area.

For example, I am told that over the past two years GWR extended its transmission areas into Marlborough and Bath; Plymouth Sound extended to Tavistock, and Downtown Radio extended in its area. Such developments are unwelcome; they pre-empt possible future opportunities. In addition, the clause as it stands does not limit expansion to contiguous areas. It allows the building up of a radio empire by erosion of other areas without going through a formal licensing application.

Finally, if unamended, the clause would enable an operator to cover new communities to which a new frequency would usually have to be allocated. That is not dissimilar to the provisions of Amendment No. 234A in the name of the noble Lord, Lord Colwyn. It raises a genuine point of concern to people in the field of local radio. I look forward to hearing what the Minister has to say in response. I beg to move.

Baroness Ewart-Biggs

I wish briefly to support the amendment. As the noble Lord, Lord Bonham-Carter, said, the authority should be required to advertise the additional licence rather than just to award it. It makes the process more open and fair, and in many ways less arbitrary. The noble Lord, Lord Bonham-Carter, has put a strong case for making this small but important change, and I hope that the Minister will listen to it.

Earl Ferrers

I am grateful to the noble Lord, Lord Bonham-Carter, for explaining the intention behind the amendment. As I perused it beforehand I was not totally clear what the aim was, given that the amendment appears to suffer from some technical deficiencies. I acknowledge that there may be a case for saying that Clause 100(4) should be more restrictively framed. It was put into the Bill to solve an awkward problem which regularly arose under the Broadcasting Act 1981.

The Act had the effect that where an independent local radio station wished to seek approval to instal a relay transmitter with the aim of improving the coverage for a significant group of listeners within the contract area, it could be thwarted from so doing if the effect of its proposals was that listeners outside the contract area might be able to receive the service from the proposed new relay transmitter. That was because if any significant extension of the contract area was possibly affected by these arrangements the IBA would have been under an obligation under the 1981 Act to readvertise the whole of the franchise area. In those circumstances a number of local radio stations naturally preferred not to go ahead with the reception improvements for listeners within their areas if the alternative was to have to face readvertisement.

Clause 104 was intended to do no more than cure that problem. However, I accept that in principle if not in practice it could open the way for the authorisation of large extensions of coverage area, though the better course would be for the second new service to be advertised separately. I do not think that the Radio Authority would operate the provision in such a way, especially in view of its general duty to secure a range and diversity of local services and to ensure fair and effective competition in the provision of such services. Nevertheless, I realise that there is a problem and I will be happy to consider the matter further to see whether there is a case for tightening up the drafting. Perhaps the noble Lord will be content with that assurance.

6 p.m.

Lord Bonham-Carter

I am most grateful to the noble Earl for his response to my amendment. In the light of what he said I am happy to withdraw it, and I look forward to his thoughts at a later stage.

Amendment, by leave, withdrawn.

Clause 100 agreed to.

Clause 101 agreed to.

Lord Sanderson of Bowden moved Amendment No. 297E: After Clause 101, insert the following new clause:

("Promotion of equal opportunities in relation to employment by holder of national licence .—(1) A national licence shall include conditions requiring the licence holder—

1. (a) to make arrangements for promoting, in relation to employment by him, equality of opportunity between men and women and between persons of different racial groups; and
2. (b) to review those arrangements from time to time.

(2) In subsection (1) "racial group" has the same meaning as in the Race Relations Act 1976.").

The noble Lord said: This amendment was spoken to with Amendment No. 193A. I beg to move.

On Question, amendment agreed to.

Clause 102 [Power to require scripts etc. or broadcasting of correction or apology]:

Lord Sanderson of Bowden moved Amendment No. 298: Page 85, line 44, after ("apology") insert ("(or both)").

The noble Lord said: I speak also to Amendments Nos. 299 and 306A. These are minor drafting amendments. Amendments Nos. 298 and 299 ensure that the authority can direct its licensees to include both a correction and an apology if this appears appropriate when a licence holder has failed to comply with a condition of his licence. Amendment No. 306A, to Clause 119, is a consequential amendment to those made in another place where references to a range of frequencies were removed from Clause 79. I beg to move.

On Question, amendment agreed to.

Lord Sanderson of Bowden moved Amendment No. 299: Page 85, line 47, after ("apology") insert ("(or both)").

On Question, amendment agreed to.

Clause 102, as amended, agreed to.

Clause 103 [Power to impose financial penalty or suspend or shorten licence period]:

Lord Sanderson of Bowden moved Amendment No. 300: Page 86, line 40, leave out subsection (5).

The noble Lord said: I refer also to Amendments Nos. 301 and 302. These amendments were spoken to with Amendment No. 135. I beg to move.

On Question, amendment agreed to.

Clause 103, as amended, agreed to.

Clause 104 [Power to revoke licences]:

Lord Sanderson of Bowden moved Amendments Nos. 301 and 302: Page 87, line 34, at end insert:

("(3A) If the Authority are satisfied in the case of any national licence—

1. (a) that the holder of the licence has ceased to provide the licensed service before the end of the period for which the licence is to continue in force, and
2. (b) that it is appropriate for them to do so,

they shall (subject to subsection (7)) serve on him a notice revoking his licence."). Page 87, line 44, after ("(3)") insert (", (3A)").

On Question, amendments agreed to.

Clause 104, as amended, agreed to.

Clauses 105 to 107 agreed to.

Clause 108 [Licensing of additional services]:

Lord Sanderson of Bowden moved Amendment No. 302A: Page 90, line 23, leave out ("other person") and insert ("person to whom this subsection applies").

The noble Lord said: I spoke to this amendment with Amendment No. 196B. I beg to move.

On Question, amendment agreed to.

Lord Sanderson of Bowden moved Amendment No. 302B: Page 90, line 24, at end insert:

("(3A) Subsection (3) applies to any person who is not a disqualified person in relation to an additional services licence by virtue of Part II of Schedule 2 to this Act.").

The noble Lord said: I spoke to this amendment with Amendment No. 196B. I beg to move.

On Question, amendment agreed to.

Clause 108, as amended, agreed to.

Clause 109 agreed to.

Clause 110 [Procedure to be followed by Authority in connection with consideration of applications for, and awarding of, licences]:

Lord Sanderson of Bowden moved Amendments Nos. 303 and 304: Page 92, line 34, leave out from beginning to ("subsection") in line 36.

Page 92, line 38, leave out ("requirements of section 94(1) (a) and (b)") and insert ("requirement specified in section 94(1) (a)").

The noble Lord said: Both these amendments were spoken to with Amendment No. 109. I beg to move.

On Question, amendments agreed to.

Lord Sanderson of Bowden moved Amendments Nos. 304A and 304B: Page 92, line 42, leave out from second ("that") to ("or") in line 43 and insert ("none of the services in question will be provided once the licence has come into force,").

Page 92, line 45, leave out from first ("that") to end of line 46 and insert ("none of those services will be so provided,").

The noble Lord said: These amendments were spoken to with Amendment No. 196B. I beg to move.

On Question, amendments agreed to.

Lord Sanderson of Bowden moved Amendment No. 305: Page 92, line 48, leave out ("revoke the licence,") and insert ("serve on him a notice revoking the licence as from the time the notice is served on him,").

The noble Lord said: This amendment was spoken to with Amendment No. 135. I beg to move.

On Question, amendment agreed to.

Lord Sanderson of Bowden moved Amendment No. 305A: Page 93, line 5, leave out ("he will not provide the services in question") and insert ("none of the services in question will be provided").

The noble Lord said: This amendment was spoken to with Amendment No. 196B. I beg to move.

On Question, amendment agreed to.

Clause 110, as amended, agreed to.

Clauses 111 and 112 agreed to.

Clause 113 [Enforcement of additional services licences]:

Lord Sanderson of Bowden moved Amendment No. 305B: Page 94, line 18, after ("pay") insert (", within a specified period,").

The noble Lord said: This amendment was spoken to with Amendment No. 196B. I beg to move.

On Question, amendment agreed to.

Clause 113, as amended, agreed to.

Clause 114 agreed to.

Clause 115 [Certain receipts of Authority to be paid into Consolidated Fund]:

Lord Sanderson of Bowden moved Amendment No. 306: Page 95, line 16, leave out ("or forfeited to them under section 96") and insert ("to them by virtue of section 96(6)").

The noble Lord said: This amendment was spoken to with Amendment No. 109. I beg to move.

On Question, amendment agreed to.

Clause 115, as amended, agreed to.

Clauses 116 to 118 agreed to.

Clause 119 [Interpretation of Part III]:

Lord Sanderson of Bowden moved Amendment No. 306A: Page 96, line 15, leave out from ("79(3)") to end of line 16.

The noble Lord said: I spoke to this amendment with Amendment No. 298. I beg to move.

On Question, amendment agreed to.

Clause 119, as amended, agreed to.

Clause 120 agreed to.

Schedule 7 [Scheme Providing for Division of Assets of IBA]:

Viscount Ullswater moved Amendment No. 306B: Page 170, line 38, leave out from ("(7)") to ("any") in line 39 and insert ("Any power to modify a transfer scheme which is conferred on the Secretary of State by this paragraph may be so exercised as to make").

The noble Viscount said: In moving this amendment I shall speak also to Amendment No. 306C. These are two purely drafting amendments. They are intended to make it plain that the Secretary of State's powers to modify the transfer scheme by order in Schedule 7 paragraph 2 include the power to provide for such modifications to take effect as from the coming into force of the scheme. I beg to move.

On Question, amendment agreed to.

Viscount Ullswater moved Amendment No. 306C: Page 170, line 40, at end insert (", and an order under sub-paragraph (6) above may provide for any of its provisions to have effect as from the coming into force of the scheme to which it relates.").

On Question, amendment agreed to.

Viscount Ullswater moved Amendment No. 307: Page 171, line 10, after ("equipment") insert ("or other asset").

The noble Viscount said: In moving this amendment I believe that it will be for the convenience of the Committee if I also speak to Amendments Nos. 308 to 309, 309ZA(1) to 309ZA(39), 309ZB, 309ZBA and 309ZC to 309ZJ. This complicated group of amendments and new clauses all relate to the transitional arrangements for independent radio and television. The main transitional provisions which are to be found in Schedule 9 were added to the Bill at the Committee stage in another place. These amendments make a number of changes to those provisions, which are mainly technical. There are, however, three additions of substance. It may be helpful to the Committee if I were to explain them briefly.

First, these new provisions make transitional arrangements for direct broadcasting by satellite (DBS). As the law stands, the IBA is responsible for broadcasting the services of its DBS contractor, BSB, just as it is responsible for broadcasting ITV and Channel 4. As the ITC will not be a broadcasting authority like the IBA, this arrangement needs to be modified. We have therefore decided that BSB should continue as DBS contractors until the end of 1992, with the ITC standing in the shoes of the IBA, but then become domestic satellite service licensees under Clause 39 of the Bill. The changeover at the end of 1992 will coincide neatly with the end of the ITC's responsibility, which it will inherit from the IBA in relation to the existing ITV contracts. This change will entail BSB losing certain regulatory obligations and privileges such as the benefits of the must-carry rule. Broadly speaking, it will put them on the same regulatory footing as non-domestic satellite service licensees such as Sky. We believe that this will be helpful in the interests of ensuring that the various satellite operators are competing on a fair and even basis.

As part of the present DBS arrangements, the IBA owns and operates the uplink for BSB services. The uplink is the transmission equipment which transmits the signals from the earth to BSB's satellite. As the ITC will not take over the IBA's terrestrial transmission system, which is to be privatised, it would not be appropriate for it to take over the uplink. An operational engineering function of this sort would not sit easily with the ITC's main responsibilities as a regulatory body. As BSB has met the costs—amounting to around £8 million—of constructing the uplink we have decided that it would be reasonable to transfer that uplink to it for a nominal sum.

My noble friend Lord Morris has tabled an amendment to this part of the transitional provisions. If I have understood that amendment correctly, it means that the IBA would be able to transfer the uplink to anybody other than BSB. In the light of the explanation I have given, he may agree that this would be rather odd, and I hope he will feel able to withdraw his amendment.

The second main addition to the transitional provisions is to take account of the privatisation of the IBA's terrestrial transmission system. The ITC will inherit the IBA's responsibilities in relation to ITV and the fourth channel in 1991 and 1992. Those responsibilities include transmission. However, the ITC will not own a transmission system with which to discharge those responsibilities itself. The new provisions therefore oblige the ITC to discharge them by requiring the ITV contractors to enter into a transmission contract with the new private transmission company during 1991 and 1992. There will be a similar arrangement for Channel 4 and S4C. The Radio Authority will be given a similar duty in relation to any independent local radio stations which remain as contractors, though we expect that they will in fact all opt to become new-style licensees.

Finally, the new provisions make transitional arrangements for the Broadcasting Standards Council and the Broadcasting Complaints Commission. They ensure that the remit of the two bodies will extend to the services provided by the ITC during 1991 and 1992 under the responsibilities it will inherit from the IBA. I beg to move.

6.15 p.m.

Lord Morris

My noble friend suggested that it was for the convenience of the Committee that he spoke to this massive number of amendments. I do not find it in the least convenient. He may possess the mental agility necessary to deal with the amendments together; I certainly do not. I did not table lightly my amendment to the government Amendment No. 309. We are talking about BSB. I do not think that my noble friend quite understands because he referred to the BSB satellite. BSB does not own the satellite; it is simply leasing capacity on it.

Similarly, the uplink can be used not only for broadcasting purposes but for a myriad of other services and data links. There is absolutely no reason at all why the broadcasting company, which in effect is a retailing company, should own, manage, maintain and control the means of transmission. It is my very strongly held view that a separate body should own the means of transmission as a common carrier to allow other entrants to the market, should there be available capacity, to share the links. That is the only point I am making.

As I see it, there are very serious implications for Her Majesty's Government in selling these assets to one particular party at nil cost or at little value. The amendment says, whether or not any such consideration represents the market value of the assets". A preferential price could be deemed to be a hidden government subsidy to an entrant into the market. I am not sure whether that would be seen to be fair or indeed whether it would contravene European competition laws. That is my reason for tabling my amendment to Amendment No. 309.

Lord Thomson of Monifieth

It may be convenient if I ask my questions at the same time so that the noble Viscount can then reply. I am grateful to him for his explanations of these complicated matters. Although they are technical, there are behind the technicalities some significant issues of policy. The noble Viscount referred to the disposal of the uplink to BSB as part of these changes. I think I am probably right in saying that, as part of the original contractual arrangements under which BSB was given the DBS contract by the IBA, it was BSB that paid for the uplink. That must be taken into account and is perhaps the background to the nominal figure which the Minister mentioned.

I should like clarification on two other points. The noble Viscount said that one of the purposes of these changes in relation to the DBS operation is to put the DBS contractor on a fair and even base with the other non-domestic satellite competitor, which is of course the Sky channel. No fair and even base will be provided by the Act for the competition as between Sky and BSB. Under the Broadcasting Act, BSB will continue to have various regulatory commitments of a public service character. It is not the same extensive public service range of obligations that apply to Channel 3 but they are quite significant and they do not apply to Sky. They produce a distorted and unfair situation between the two. There is also the significant difference with regard to the law relating to ownership, a matter which we have already debated. I could not allow to pass without that comment the Minister's statement that he is creating by these amendments a fair and even base between the two satellite operators.

The Committee is owed some explanation of the privatisation of the IBA transmission system. As the noble Viscount said, it was introduced in another place very late in the Committee stage proceedings. It is a significant piece of government privatisation and has important policy implications. It would be helpful to have more explanation. I do not know whether this is the correct time for it, or exactly how it is to be done. The schedule refers to a nominated company. The nominated company is apparently to be formed by the transfer of the transmission assets of the IBA to this nominated company at the beginning of 1991, which is very soon. How is it then to be disposed of to a private owner? Is it to be put out to competitive tender? Is there to be a proper public bidding system, or is it to be done by the kind of private deal to which the Government seem rather disposed in other fields? The Committee is entitled to a much fuller explanation of the major change lying behind these technical amendments.

Viscount Ullswater

Perhaps I may reply first to my noble friend Lord Morris. I did not want him to think that I had misled him or the Committee into thinking that BSB owns its own satellite. I was referring to the transmission of signals to the satellite that BSB uses rather than to BSB's satellite.

The noble Lord, Lord Thomson, assisted me in his remarks because it is true that BSB has met the costs of constructing the uplink from this country. I mentioned a figure for what BSB had spent. It won on a competitive tender the right to use the channels. It could use the uplink for further purposes, but as it has won it and paid for it it would still be right to go down the route that I suggested in my remarks.

The noble Lord, Lord Thomson, said that he could not agree that it was a fair and even base. I have to accept that BSB has regulatory requirements greater than those for Sky. However, we have already dealt with this area in some way. What I have said indicates the transitional arrangements between now and the end of 1992 for BSB and the transmission arrangements in regard to that.

The noble Lord is correct in saying that the transmission system will be vested in a new company at the end of 1990. He referred to the beginning of 1991. That company will be wholly owned by the Crown until its sale to the private sector. The noble Lord asked how it would be sold. All I can tell them at the moment is that the method of sale has not finally been decided. Whatever the exact method, the process will be fair, open and competitive.

Lord Morris

I am grateful to my noble friend for that explanation. I must apologise to him and to the Committee for wasting the Committee's time. I did not realise that DBS has contributed substantially to the cost of the uplink. My amendment was therefore quite unnecessary and I apologise.

On Question, amendment agreed to.

Viscount Ullswater moved Amendment No. 308: Page 171, line 11, at end insert ("or (Disposal by IBA of DBS transmitting equipment etc)(1) of this Act").

The noble Viscount said: This amendment is consequential on Amendment No. 307. I beg to move.

On Question, amendment agreed to.

On Question, Whether Schedule 7, as amended, shall be agreed to?

Baroness Birk

I want to ask some questions about IBA staff. The debate on whether Schedule 7 shall stand part seems the appropriate point to do so. Some of the former IBA staff who have been offered employment with the new privatised transmission company have been offered an option of equity participation in the company. Can the Minister confirm that all former IBA staff will be consulted and given the option of employee participation in the running and ownership of shares in the privatised transmission company? What is the Government's view of possible employee participation? What does the future hold for them in the privatisation?

6.30 p.m.

Earl Ferrers

The position is that it will not be the IBA's staff, it will only be the transmission staff. At present, the exact arrangements have not been made.

Baroness Birk

I am sorry, but I thought that the Minister was going to give a fuller explanation. I understand that some of the former IBA staff have been offered either employment with the new privatised transmission company or an option of equity participation in the company. I am talking about all former IBA staff. I should like to know whether they have been consulted and will be given the same sort of option. I ask this because they will no longer be employed by the IBA once the Bill becomes enacted and the ITC takes over. Will they be given the option of employer participation or the option of ownership of shares in the privatised transmission company? The position is not very clear under the provisions of the Bill. Can the Minister help us in this respect?

Earl Ferrers

I shall certainly do the best I can. The noble Baroness asks a question of detail. In the circumstances, I think that it would be best if I were to write to her on the matter. It is quite an important issue and I would not like to mislead her.

Schedule 7, as amended, agreed to.

Clause 121 agreed to.

Schedule 8 agreed to.

Clause 122 [Transitional provisions relating to IBA's broadcasting services and to existing cable services]:

Viscount Ullswater moved Amendments Nos. 308A to 308C: Page 98, line 13, leave out ("and") and insert:

("(aa) for the purpose of the regulation by the Commission after the end of that period of services provided in succession to the DBS services provided by them during that period; and"). Page 98, leave out line 15 and insert ("provided by the IBA down to the transfer date-"). Page 98, line 21, leave out subsection (2) and insert: ("(2) The programmes provided by a programme contractor under his contract for inclusion in any broadcasting service provided by the Commission or the Radio Authority in accordance with Part II or III of Schedule 9 shall not he transmitted by, or under arrangements made by, the Commission or the Radio Authority (as the case may be) but shall be transmitted—

1. (a) by the nominated company in pursuance of a contract made between that company and the programme contractor in accordance with section (Variation of programme contracts to take account of new transmission arrangements), or
2. (b) under arrangements made in accordance with subsection (3)(a) of that section in a case where any such contract made between a DBS programme contractor and that company is terminated by the contractor as mentioned in that provision.

(3) The programmes broadcast on Channel 4 during the interim period in accordance with Part II of Schedule 9 shall not be transmitted by, or under arrangements made by, the Commission but shall be transmitted by the nominated company in pursuance of such a contract made between that company and the Channel 4 company as is mentioned in subsection (4). (4) The contract referred to in subsection (3) is a contract which makes provision for and in connection with the transmission by the nominated company during the interim period of the programmes to be broadcast on Channel 4 during that period, and in particular makes provision—

1. (a) for specified standards relating to technical quality, coverage and reliability to be attained in connection with the transmission of those programmes by that company; and
2. (b) for the transmission of those programmes to be suspended, if the Commission so direct in circumstances falling within subsection (5), for such period, or in the case of such programme or programmes, as they may specify.

(5) The circumstances referred to in subsection (4)(b) are circumstances where the Commission consider it necessary to require the transmission of the programmes in question to be suspended in order for them to comply, or secure compliance, with the provisions of the Broadcasting Act 1981 (as it has effect in accordance with Part II of Schedule 9 to this Act) or with any restriction or requirement imposed thereunder. (6) In the following provisions, namely—

1. (a) Parts II and III of Schedule 9 to this Act, and
2. (b) any provision of the Broadcasting Act 1981 which is to be construed as referring to the Commission or to the Radio Authority by virtue of either of those Parts of that Schedule,

any reference (however expressed) to the broadcasting of programmes, or to programmes broadcast, by the Commission or the Radio Authority shall, in consequence of subsections (2) and (3) above, be read as a reference to the broadcasting of programmes, or to programmes broadcast, by that body whether the transmission of the programmes is undertaken (according to the circumstances of the case)—

1. (i) by, or under arrangements made by, that body, or
2. (ii) by the nominated company in pursuance of any such contract as is referred to in either of those subsections, or
3. (iii) under any such arrangements as are referred to in subsection (2)(b);

and those Parts of that Schedule contain other modifications of provisions of that Act which are consequential on those subsections. (7) This section and section (Variation of programme contracts to take account of new transmission arrangements) shall have effect in relation to any teletext service provided by the Commission in accordance with Part II of Schedule 9 as if—

1. (a) any reference to a programme or television programme were a reference to a teletext transmission; and
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2. (b) any reference to a programme contractor were a reference to a teletext contractor.

(8) This section and section (Variation of programme contracts to take account of new transmission arrangements) shall, in so far as they apply to the transmission of the programmes provided by a DBS programme contractor under his contract for inclusion in any DBS service provided by the Commission in accordance with Part II of Schedule 9, be construed as applying only to the carrying on of such activities in connection with the transmission of those programmes as were being so carried on by the IBA immediately before the transfer date. (9) In this section— "the Channel 4 company" means the body corporate referred to in section 12(2) of the Broadcasting Act 1981, and "on Channel 4" means in the additional broadcasting service referred to in section 10(1) of that Act; "the interim period" means the period specified in subsection (1) (a) above. (10) The reference in subsection (4) to specified standards is a reference to such standards as the IBA shall specify for the purposes of that subsection before the transfer date.").

The noble Viscount said: I spoke to these amendments when moving Amendment No. 307. I beg to move en bloc.

On Question, amendments agreed to.

Clause 122, as amended, agreed to.

Viscount Ullswater moved Amendment No. 308D: After Clause 122, insert the following new clause:

("Variation of programme contracts to take account of new transmission arrangements.—(1) Subject to subsections (2) and (4), it shall be the duty of the IBA to make before the transfer date such variations of each contract between them and a programme contractor ("the programme contract") as appear to them to be appropriate— (a) for requiring the programme contractor to enter into a contract with the nominated company which makes provision for and in connection with the transmission by that company during the interim period of the programmes which the programme contractor has the right and the duty to provide under the programme contract, and in particular makes provision—

1. (i) for specified standards relating to technical quality, coverage and reliability to be attained in connection with the transmission of those programmes by that company,
2. (ii) for the transmission of those programmes to be suspended, if the relevant authority so direct in circumstances falling within subsection (5), for such period, or in the case of such programme or programmes, as they may specify, and
3. (iii) where the programme contractor is a TV programme contractor, for the consideration payable in respect of the transmission of those programmes to be payable in accordance with subsection (6); and

(b) for securing that the right and the duty of the programme contractor under the programme contract to provide those programmes is accordingly (so long as any such contract with the nominated company remains in force) a right and a duty to provide them for transmission by that company. (2) Subsection (1) shall apply to a contract for the provision of television programmes for broadcasting in a DBS service ("a DBS programme contract") as if—

1. (a) the reference to coverage in paragraph (a) (i) were omitted; and
2. (b) for paragraph (a) (iii) there were substituted—

"(iii) for the programme contractor to be entitled to terminate the contract if he is notified by the Commission that they are satisfied that the standards referred to in sub-paragraph (i) are not being attained as mentioned in that sub-paragraph;". (3) The IBA shall, in the case of any DBS programme contract, make before the transfer date such variations of the contract as appear to them to be appropriate— (a) for requiring the DBS programme contractor, if he terminates his contract with the nominated company under any provision included in the contract in consequence of subsection (2) (b), to make such arrangements as the Commission may approve for and in connection with the transmission during the interim period of the programmes which he has the right and the duty to provide under the DBS programme contract, being arrangements under which—

1. (i) specified standards relating to technical quality and reliability are to be attained in connection with the transmission of those programmes under the arrangements, and
2. (ii) the transmission of those programmes is to be suspended, if the Commission so direct in circumstances falling within subsection (5), for such period, or in the case of such programme or programmes, as they may specify; and

(b) for securing that the right and the duty of the programme contractor under the DBS programme contract to provide those programmes is accordingly (so long as any such arrangements remain in force) a right and a duty to provide them for transmission under the arrangements. (4) Subsection (1) shall apply to a contract for the provision of local sound broadcasts as if the reference to the interim period were a reference to the remainder of the period for which the contract continues in force by virtue of paragraph 2(1) in Part III of Schedule 9; and that subsection accordingly does not apply to any such contract if—

1. (a) the programme contractor notifies the IBA, before such date as they shall determine, that he proposes to request the Radio Authority to determine the contract as from the transfer date in accordance with paragraph 1(1) in Part IV of that Schedule; or
2. (b) the contract is one to which paragraph 2(1) in that Part of that Schedule would apply on the transfer date.

(5) The circumstances referred to in paragraph (a) (ii) of subsection (1) or (3) are circumstances where the relevant authority or (as the case may be) the Commission consider it necessary to require the transmission of the programmes in question to be suspended—

1. (a) in order for them to comply, or secure compliance, with the provisions of the Broadcasting Act 1981 (as it has effect in accordance with Schedule 9 to this Act) or with any restriction or requirement imposed thereunder, or
2. (b) in view of any matter which they consider constitutes or would constitute a breach of the programme contractor's contract.

(6) The IBA shall make before the transfer date such variations of each contract between them and a TV programme contractor as appear to them to be appropriate for requiring the programme contractor to enter into an agreement with all of the other TV programme contractors which—

1. (a) relates to the payment by those contractors to the nominated company of the consideration payable by them in respect of the transmission by that company of the programmes provided by them; and
2. (b) provides for the amounts payable by each of the contractors to be such proportion of the total consideration so payable as corresponds to the proportion of the relevant amount which he was liable to pay by virtue of section 32(1) (a) of the 1981 Act (rental payments) in respect of the period beginning with 1st April 1990 and ending with the transfer date;

and in paragraph (b) "the relevant amount" means the aggregate amount of all payments falling to be made by TV programme contractors by virtue of section 32(1) (a) of that Act in respect of that period (excluding any payments falling to be so made in consequence of section 13(2) of that Act (advertisements on Channel 4)). (7) The IBA shall, in the case of each such contract as is mentioned in subsection (6), also make before the transfer date such variations of the contract as appear to them to be appropriate in consequence of section 122(3). (8) In this section— "the interim period" means the period specified in section 122(1) (a); "the relevant authority"—

1. (a) in relation to any such contract as is mentioned in subsection (1) (a) which relates to the transmission of television programmes, means the Commission, and
2. (b) in relation to any such contract which relates to the transmission of local sound broadcasts, means the Radio Authority;

and section 122(7) and (8) apply for the purposes of this section. (9) Any reference in subsection (1) or (3) to specified standards is a reference to such standards as the IBA shall specify for the purposes of that subsection before the transfer date; and different standards may be so specified for the purposes of subsection (1) in relation to programme contractors of different descriptions.").

The noble Viscount said: I spoke to this amendment when moving Amendment No. 307. I beg to move.

On Question, amendment agreed to.

Viscount Ullswater moved Amendments Nos. 308E and 309: After Clause 122, insert the following new clause:

("Supplementary provisions relating to variation of programme contracts .—(1) Where the IBA make any variation of a programme contract in pursuance of section (Variation of programme contracts to take account of new transmission arrangements)(1) to (4) or (6), they may make such variations of that contract of a supplemental, incidental, consequential or transitional nature as they consider appropriate. (2) The relevant authority may on or after the transfer date make any variation of a programme contract which could have been made before that date by the IBA—

1. (a) in pursuance of section (Variation of programme contracts to take account of new transmission arrangements) (1) to (4), or
2. (b) in pursuance of subsection (1) above in connection with any variation made in pursuance of section (Variation of programme contracts to take account of new transmission arrangements)(1) to (4).

(3) Before making any variation of a programme contract in pursuance of any provision of section (Variation of programme contracts to take account of new transmission arrangements), this section or Schedule 9, the IBA or (as the case may be) the relevant authority shall consult the programme contractor concerned. (4) Any such variation shall be made by means of a notice served on that programme contractor. (5) In this section— "programme contract" means a contract between the IBA and a programme contractor; "programme contractor" includes a teletext contractor; "the relevant authority"—

1. (a) in relation to a programme contract for the provision of television programmes or teletext transmissions, means the Commission; and
1505
2. (b) in relation to a programme contract for the provision of local sound broadcasts, means the Radio Authority.").

After Clause 122, insert the following new clause: ("Disposal by IBA of DBS transmitting equipment etc. .—(1) The IBA shall have power, with the approval of the Secretary of State— 4

1. (a) to dispose of any relevant assets to a DBS contractor; and
2. (b) to do so on such terms and for such consideration as they may determine (whether or not any such consideration represents the market value of the assets).

(2) Any disposal under subsection (1) shall take effect on the transfer date. (3) In this section—

1. (a) "relevant asset" means any equipment or other asset (of whatever description) which has been used or held by the IBA in connection with the transmission of DBS services; and
2. (b) "DBS programme contractor" and "DBS service" have the meaning given by section 37(3) of the Cable and Broadcasting Act 1984.").

The noble Viscount said: I spoke to these amendments in connection with Amendment No. 307. I beg to move en bloc.

On Question, amendments agreed to.

[Amendment No. 309ZA not moved.]

Schedule 9 [Transitional Provisions Relating to IBA's Broadcasting Services]:

Viscount Ullswater moved Amendments Nos. 309ZA(1) to 309ZA(39), 309ZB and 309ZBA: Page 177, line 34, leave out ("and").

Page 177, line 35, at end insert (", and (d) any DBS services so provided,"). Page 177, line 39, after ("quality") insert ("both as to the transmission and"). Page 177, line 45, at end insert— ("(ba) sections 14(3) and 15;"). Page 177, line 46, leave out ("section") and insert ("sections 28 and"). Page 178, line 2, leave out ("relation to the Commission and") and insert ("connection with"). Page 178, line 4, leave out ("relation to the IBA and") and insert ("connection with"). Page 178, line 5, at end insert— ("(3A) The provisions specified in sub-paragraph (3) above shall have effect in accordance with that sub-paragraph with the following general modifications, namely—

1. (a) any reference to the IBA shall (subject to paragraph (b) and sub-paragraph (6) below) be construed as a reference to the Commission; and
2. (b) any reference to any of the broadcasting stations used by the IBA shall be construed as a reference to any of the broadcasting stations used in the provision of any of the services provided by the Commission as mentioned in sub-paragraph (1) above.").

Page 178, line 10, at end insert— ("(5) Section 8 of the 1981 Act shall have effect in accordance with sub-paragraph (3) above with the omission of subsections (6) to (9) of that section; but (except in the case of any programme to which the Commission determine that the following prohibition is not to apply) none of the broadcasting services provided by the Commission as mentioned in sub-paragraph (1) above shall include a programme which is sponsored by any person whose business consists, wholly or mainly—

1. (a) in the manufacture or supply of a product, or
2. (b) in the provision of a service,

the advertising of which in any such broadcasting service is prohibited by virtue of any provision of that Act (as applied by this paragraph) or of the code under section 9 of that Act (as so applied). (6) Section 29(5) of the 1981 Act shall have effect in accordance with sub-paragraph (3) above as if the reference to requiring the IBA by notice in writing to do, or not to do, anything mentioned in that provision were a reference to requiring the Commission by notice in writing to direct any programme contractor specified in the notice—

1. (a) to do, or not to do, that thing, or
2. (b) (if the context so requires) to secure that that thing is or is not done.

(7) Without prejudice to the generality of sub-paragraph (4) of paragraph 2 below, the Commission may make such variations of a contract to which sub-paragraph (1) of that paragraph applies as appear to them to be appropriate for facilitating or ensuring compliance with any direction or notice given to or served on them under section 28 or 29 of the 1981 Act (as applied by this paragraph)."). Page 178, line 12 leave out from ("(1)") to ("contractor") in line 16 and insert ("Sections 2(3) and 14(2) of the 1981 Act shall have effect in relation to the Commission and the programmes and teletext transmissions broadcast by them in the services provided by them as mentioned in paragraph 1(1) above as they had effect immediately before the transfer date in relation to the IBA and the programmes and teletext transmissions broadcast by them in the services mentioned in paragraph 1(1); and where a contract between the IBA and a programme contractor or a teletext"). Page 178, line 19, after ("contractor") insert ("and any other party to it"). Page 178, line 30, after ("contractor") insert ("or teletext contractor"). Page 178, line 31, at end insert ("and subject also to paragraphs 4 and 4A below."). Page 178, line 34, after ("shall") insert ("(subject to paragraphs (aa) and (ab) below)"). Page 178, line 35, leave out ("and") and insert—

1. ("(aa) sections 21 and 23 shall have effect as if any reference to the IBA's obligation to transmit the programmes supplied by a programme contractor were a reference to the right and the duty of the programme contractor under his contract to provide programmes for broadcasting in one of the services provided by the Commission as mentioned in paragraph 1(1) above;
2. (ab) section 22 shall have effect as if any reference to the programmes, or television programmes, supplied to the IBA were a reference to the programmes, or television programmes, supplied for broadcasting in one of those services; and").

Page 178, line 43, after ("this") insert ("Part of this"). Page 179, line 14, leave out ("and"). Page 179, line 18, at end insert ("; and

1. (d) in section 13, subsection (4) shall (in consequence of paragraph 1(5) above) have effect with the omission of paragraph (c).").

Page 179, line 20, leave out paragraph 4 and insert— ("4.—(1) For the purposes of—

1. (a) this Part of this Schedule, and
2. (b) the provisions of the 1981 Act which have effect in accordance with this Part of this Schedule,

teletext transmissions shall not be treated as programmes; but this is subject to sub-paragraph (2) and to any of those provisions of the 1981 Act which expressly requires such transmissions to be so treated for the purposes of any particular provision. (2) In paragraphs 1(6) and 2(3) (aa) above and 8 below and in the provisions specified in Part I of Schedule 3 to the 1981 Act (as they have effect in accordance with this Part of this Schedule)—

1. (a) references to programmes or to television programmes shall be read as including references to teletext transmissions; and
2. (b) references to programme contractors shall be read as including references to teletext contractors;

and section 14(5) of the 1981 Act shall have effect during the interim period only in so far as it applies to the provisions specified in Part II of that Schedule. (3) In section 3(2) of the 1981 Act, in its application to teletext transmissions or teletext contractors by virtue of sub-paragraph (2), the reference to section 2(3) of that Act shall be read as a reference to section 14(2) of that Act (as it has effect by virtue of paragraph 2(1) above). (4) The following provisions of the 1981 Act, namely—

1. (a) section 20(2) (b) and (3), and
2. (b) section 22,

shall not have effect by virtue of paragraph 2(2) above in relation to teletext contractors or their contracts."). Page 179, line 39, at end insert— ("Provisions relating to DBS services 4A.—(1) The following provisions of the 1981 Act, namely—

1. (a) in section 2(2), paragraph (c) and in paragraph (b) the words "and a proper balance and wide range in their subject matter",
2. (b) in section 4(1), paragraph (d) and so much of paragraph (b) as relates to the giving of a sufficient amount of time in the programmes to news and news features,
3. (c) section 20(2) (b) and (3),
4. (d) section 22, and
5. (e) section 24,

shall not have effect by virtue of paragraph 1(3) or 2(2) above in connection with the provision of DBS services by the Commission or (as the case may be) in relation to DBS contractors or their contracts. (2) Every contract between the Commission and a DBS programme contractor shall contain all such provisions as the Commission think necessary or expedient to ensure that the financial and other arrangements for the provision of the satellite transponder are made by the contractor. (3) For the purpose of enabling a DBS programme or teletext contractor to make charges for the reception of programmes provided by him or transmissions containing material so provided, the Commission may, notwithstanding anything in the 1981 Act as it has effect in accordance with this Part of this Schedule, broadcast the programmes or transmissions in such a form (whether scrambled, encoded or otherwise) as will prevent persons from receiving them unless they obtain from the contractor the means of doing so. (4) Where under the power conferred by sub-paragraph (3) the Commission broadcast programmes or transmissions in such a form as is mentioned in that sub-paragraph, nothing in the 1981 Act (as it so has effect) shall be taken as requiring the Commission to permit advertisements to be included in the programmes or transmissions."). Page 179, line 45, leave out ("the reference in section 52(3) or 53(3)") and insert ("any reference in section 52(3) or 53(2) or (4)"). Page 180, line 41, leave out ("to (8)"). Page 180, line 42, leave out ("those provisions apply") and insert ("that provision applies"). Page 180, line 51, leave out ("and"). Page 181, line 2, at end insert ("and (d) (except in the case of any programme to which the Welsh Authority determine that this paragraph is not to apply) S4C shall not contain any programme which is sponsored by any person whose business consists, wholly or mainly—

1. (i) in the manufacture or supply of a product, or
2. (ii) in the provision of a service,

the advertising of which on ITV is prohibited by virtue of any provision of that Act or of the code under section 9 of that Act."). Page 181, line 35, leave out paragraph 8 and insert—("8.—(1) Part V of this Act shall have effect as if— (a) section 131(3) of this Act included a reference to any television programme broadcast by the Commission during the interim period; (b) (subject to sub-paragraph (2)) the Commission were—

1. (i) in relation to the provision by them of television broadcasting services in accordance with this Part of this Schedule, and
2. (ii) in relation to the broadcasting of advertisements on S4C during the interim period,

a broadcasting body within the meaning of that Part of this Act; and (c) the Welsh Authority accordingly were not a broadcasting body within the meaning of that Part of this Act in relation to any such broadcasting of advertisements on S4C. (2) Sub-paragraph (1) (b) shall not have effect for the purposes of section 133(5) of this Act; and the Commission shall make such variations of any contract to which paragraph 2(1) above applies as appear to them to be appropriate— (a) for requiring the programme contractor under that contract—

1. (i) to make a recording of every programme provided by him which is broadcast by the Commission during the interim period, and to retain that recording for the period of 90 days beginning with the broadcast,
2. (ii) if requested to do so by the Commission for the purpose of enabling them to comply with any requirement imposed on them in pursuance of section 133(4), 143(3) or 155(1) of this Act, to produce any such recording to them, and
3. (iii) if requested to do so by the Commission for the purpose of enabling them to comply with any requirement imposed on them in pursuance of section 133(4) or 143(3) of this Act, to produce to them any transcript of any such programme which he is able to produce to them; and

(b) for ensuring compliance by the programme contractor with any request to which section 133(7) of this Act applies which may be made to him by the BCC. (3) For the financial year which includes the commencement of section 137 of this Act, and each subsequent financial year falling wholly or partly within the interim period, the Secretary of State shall notify to the Commission the sum which he considers to be the appropriate contribution by that body, in respect of the programme contractors under contracts to which paragraph 2(1) above applies, towards the expenses of the BCC; and the Commission shall pay to the Secretary of State any sum notified to them under this sub-paragraph. (4) Paragraph 2(1) (g) (i) of Schedule 11 to this Act shall have effect during the interim period as if the reference to the BBC or the Welsh Authority included a reference to the Commission. (5) In this paragraph "the BCC" means the Broadcasting Complaints Commission."). Page 181, line 45, at end insert— ("Provisions relating to Broadcasting Standards Council 8A. Part VI of this Act shall have effect during the interim period as if— (a) section 140(2) of this Act included a reference to any television programme broadcast by the Commission during that period; (b) the Commission were—

1. (i) in relation to the provision by them of television broadcasting services in accordance with this Part of this Schedule, and
2. (ii) in relation to the broadcasting of advertisements on S4C during the interim period,

a broadcasting body within the meaning of that Part of this Act; and (c) the Welsh Authority accordingly were not a broadcasting body within the meaning of that Part of this Act in relation to any such broadcasting of advertisements on S4C."). Page 182, line 14, at end insert— ("PART IIA REPLACEMENT OF DBS CONTRACTS BY LICENCES UNDER PART I Replacement of DBS programme contract by domestic satellite licence 1.—(1) Where any contract which, by virtue of paragraph 2(1) in Part II of this Schedule, has effect as a contract between the Commission and a DBS programme contractor is effective immediately before the relevant date—

1. (a) the contract shall cease to have effect on that date; but
2. (b) the contractor shall be granted by the Commission as from that date a licence under Part I of this Act to provide a domestic satellite service which, in accordance with section 39(1A) of this Act, authorises the provision of a multichannel service on the frequencies on which any DBS services consisting of programmes provided by him under the contract were being provided by the Commission down to that date.

(2) In sub-paragraph (1) "multichannel service" means a service which to any extent consists in the simultaneous transmission of different programmes on different frequencies. (3) Any licence granted in pursuance of sub-paragraph (1) shall be so granted notwithstanding anything in sections 15 to 17 of this Act (as applied by section 39 of this Act); and nothing in section 19 of this Act (as so applied) shall apply to any such licence until such time (if any) as it is renewed in accordance with sub-paragraph (4). (4) Section 20 of this Act (as so applied) shall apply to any such licence as if—

1. (a) in subsection (1), the first reference to a period of fifteen years were a reference to the period beginning with the relevant date and ending with the date on which the contract referred to in sub-paragraph (1) would have expired apart from that sub-paragraph;
2. (b) in subsection (7) (b), the words from "a different" to "as" were omitted; and
3. (c) in subsection (10) (a), the reference to any conditions included in the licence in pursuance of section 19 were a reference to any conditions so included in accordance with sub-paragraph (5) below.

(5) Where any such licence is to be renewed in accordance with sub-paragraph (4), the Commission shall (notwithstanding section 3(4) of this Act) by notice served on the licence holder vary the licence, as from the date of its renewal, by including in it such conditions as appear to them to be necessary or expedient in consequence of sub-paragraph (4). (6) Section 3(3) shall, in its application in relation to any such licence, have effect—

1. (a) with the omission of paragraph (a), and
1510
2. (b) as if the reference to Part I of this Act included a reference to this Part of this Schedule.

(7) Section 36 shall have effect in relation to any such licence with the omission of subsection (2); and the maximum amount which the holder of any such licence may be required to pay by way of a financial penalty imposed in pursuance of subsection (1) (a) of that section shall instead be the sum for the time being specified in section 40(5). (8) Except as provided in the preceding provisions of this paragraph, Part I of this Act applies to a licence granted in pursuance of this paragraph as it applies to any other licence to provide a domestic satellite service. (9) In this Part of this Schedule "the relevant date" means the day immediately following the end of the interim period. Power to require licence holder to make additional payments under 1981 Act 2.—(1) The Secretary of State may by order provide for such of the provisions of sections 32 to 35 of, and Schedule 4 to, the 1981 Act as are specified in the order to have effect (subject to such modifications as are so specified)—

1. (a) in relation to the holder of any licence granted in pursuance of paragraph 1 above, or
2. (b) in relation to any such licence,

with a view to making provision for and in connection with the making by the holder of any such licence to the Commission of payments determined in accordance with section 32 of that Act in respect of profits or advertising revenue (or both) within the meaning of that section. (2) Any such order shall be so framed as to secure that, subject to such modifications as the Secretary of State considers appropriate and to sub-paragraph (4), the provisions of the 1981 Act applied by the order as mentioned in sub-paragraph (1) (a) and (b) so apply in a similar way to that in which they applied immediately before the relevant date in relation to a DBS programme contractor or (as the case may be) in relation to the contract of any such contractor. (3) Without prejudice to the generality of sub-paragraph (2), any such order shall provide for any excess of a DBS programme contractor's relevant expenditure over his relevant income to be carried forward and treated as relevant expenditure for the purpose of computing his profits as the holder of a licence granted in pursuance of paragraph I above. Expressions used in this sub-paragraph which are also used in Schedule 4 to the 1981 Act have the same meaning as in that Schedule. (4) The power of the Secretary of State to make an order under subsection (8) of section 32 of the 1981 Act shall include power to make an order amending any of the provisions of subsections (4) and (5) of that section in so far as they have effect, by virtue of sub-paragraph (1), in relation to the holder of a licence granted in pursuance of paragraph 1 above. (5) Where an order under sub-paragraph (1) comes into force at any time after the relevant date, the Commission shall (notwithstanding section 3(4) of this Act) by notice served on the licence holder vary any licence granted in pursuance of paragraph 1 above by including in it such conditions as appear to them to be necessary or expedient in consequence of the order. (6) Nothing in any such order shall impose on the holder of any such licence any liability to make any payment in respect of any time when any conditions included in the licence in accordance with paragraph 1(5) above are in force. (7) An order shall not be made by the Secretary of State under sub-paragraph (1) unless a draft of it has been laid before and approved by a resolution of each House of Parliament. Replacement of DBS teletext contract by additional services licence 3.—(1) Where any contract which, by virtue of paragraph 2(1) in Part II of this Schedule, has effect as a contract between the Commission and a DBS teletext contractor is effective immediately before the relevant date—

1. (a) the contract shall cease to have effect on that date; but
2. (b) the contractor shall be granted by the Commission as from that date an additional services licence under Part I of this Act which allocates for use under the licence all of the spare capacity within the frequencies on which any DBS services consisting of programmes provided by him as a DBS programme contractor were provided by the Commission down to that date.

(2) Any such licence shall be so granted notwithstanding anything in sections 45 and 46 of this Act; and nothing in section 47 of this Act shall apply to any such licence until such time (if any) as it is renewed in accordance with sub-paragraph (3). (3) Section 48 of this Act shall apply to any such licence as if—

1. (a) in subsection (1) (a), the reference to a period of ten years were a reference to the period beginning with the relevant date and ending with the date on which any contract to which paragraph 1(1) above applies and to which the DBS teletext contractor was a party immediately before the relevant date would have expired apart from that provision;
2. (b) subsection (3) were omitted;
3. (c) in subsection (6), paragraph (a) were omitted;
4. (d) in subsection (7) (b), the words from "a different" to "as" were omitted; and
5. (e) in subsection (10), the reference to any conditions included in the licence in pursuance of section 47 were a reference to any conditions so included in accordance with sub-paragraph (4) below.

(4) Where any such licence is to be renewed in accordance with sub-paragraph (3), the Commission shall (notwithstanding section 3(4) of this Act) by notice served on the licence holder vary the licence, as from the date of its renewal, by including in it such conditions as appear to them to be necessary or expedient in consequence of sub-paragraph (3). (5) Section 3(3) shall, in its application in relation to any such licence, have effect—

1. (a) with the omission of paragraph (a), and
2. (b) as if the reference to Part I of this Act included a reference to this Part of this Schedule.

(6) Section 50 shall have effect in relation to any such licence with the omission of subsection (2); and the maximum amount which the holder of any such licence may be required to pay by way of a financial penalty imposed in pursuance of subsection (1) of that section shall instead be the sum for the time being specified in section 40(5). (7) Except as provided in the preceding provisions of this paragraph, Part I of this Act applies to a licence granted in pursuance of this paragraph as it applies to any other additional services licence."). Page 182, line 25, after ("quality") insert ("both as to the transmission and"). Page 182, line 32, leave out ("section") and insert ("sections 28 and"). Page 182, line 34, leave out ("relation to the Authority and") and insert ("connection with"). Page 182, line 36, leave out ("relation to the IBA and") and insert ("connection with"). Page 182, line 37, at end insert— ("(3A) The provisions specified in sub-paragraph (3) above shall have effect in accordance with that sub-paragraph with the following general modifications, namely—

1. (a) any reference to the IBA shall (subject to paragraph (b) and sub-paragraph (6) below) be construed as a reference to the Authority; and
2. (b) any reference to any of the broadcasting stations used by the IBA shall be construed as a reference to any of the broadcasting stations used in the provision of any of the services provided by the Authority as mentioned in sub-paragraph (1) above.").

Page 182, line 42, at end insert— ("(5) Section 8 of the 1981 Act shall have effect in accordance with sub-paragraph (3) above with the omission of subsections (6) to (9) of that section; but (except in the case of any programme to which the Authority determine that the following prohibition is not to apply) none of the broadcasting services provided by the Authority as mentioned in sub-paragraph (1) above shall include a programme which is sponsored by any person whose business consists, wholly or mainly—

1. (a) in the manufacture or supply of a product, or
2. (b) in the provision of a service,

the advertising of which in any such broadcasting service is prohibited by virtue of any provision of that Act (as applied by this paragraph) or of the code under section 9 of that Act (as so applied). (6) Section 29(5) of the 1981 Act shall have effect in accordance with sub-paragraph (3) above as if the reference to requiring the IBA by notice in writing to do, or not to do, anything mentioned in that provision were a reference to requiring the Authority by notice in writing to direct any programme contractor specified in the notice—

1. (a) to do, or not to do, that thing, or
2. (b) (if the context so requires) to secure that that thing is or is not done.

(7) Without prejudice to the generality of sub-paragraph (5) of paragraph 2 below, the Authority may make such variations of a contract to which sub-paragraph (1) of that paragraph applies as appear to them to be appropriate for facilitating or ensuring compliance with any direction or notice given to or served on them under section 28 or 29 of the 1981 Act (as applied by this paragraph)."). Page 183, line 6, after ("contractor") insert ("and any other party to it"). Page 183, line 29, after ("shall") insert ("(subject to paragraphs (aa) and (ab) below)"). Page 183, line 30, leave out ("and") and insert—

1. ("(aa) sections 21 and 23 shall have effect as if any reference to the IBA's obligation to transmit the programmes supplied by a programme contractor were a reference to the right and the duty of the programme contractor under his contract to provide programmes for broadcasting in one of the services provided by the Authority as mentioned in paragraph 1(1) above;
2. (ab) section 22 shall have effect as if any reference to the programmes supplied to the IBA were a reference to the programmes supplied for broadcasting in one of those services; and").

Page 183, line 38, leave out ("sub-paragraph (4) (b)") and insert ("any of the provisions of this Part of this Schedule"). Page 183, line 40, leave out paragraph 3 and insert— ("3.—(1) Part V of this Act shall have effect as if—

1. (a) section 131(3) of this Act included a reference to any sound programme broadcast by the Authority in accordance with this Part of this Schedule; and
2. (b) (subject to sub-paragraph (2)) the Authority were, in relation to the provision by them of local sound broadcasting services in accordance with this Part of this Schedule, a broadcasting body within the meaning of that Part of this Act.

(2) Sub-paragraph (1) (b) shall not have effect for the purposes of section 133(5) of this Act; and the Authority shall make such variations of any contract which continues in force by virtue of paragraph 2(1) above as appear to them to be appropriate— (a) for requiring the programme contractor under that contract—

1. (i) to make a recording of every programme provided by him which is broadcast by the Authority in accordance with this Part of this Schedule and to retain that recording for the period of 42 days beginning with the broadcast,
1513
2. (ii) if requested to do so by the Authority for the purpose of enabling them to comply with any requirement imposed on them in pursuance of section 133(4), 143(3) or 155(1) of this Act, to produce any such recording to them, and
3. (iii) if requested to do so by the Authority for the purpose of enabling them to comply with any requirement imposed on them in pursuance of section 133(4) or 143(3) of this Act, to produce to them any transcript of any such programme which he is able to produce to them; and

(b) for ensuring compliance by the programme contractor with any request to which section 133(7) of this Act applies which may be made to him by the BCC. (3) For the financial year which includes the commencement of section 137 of this Act, and each subsequent financial year falling wholly or partly within the period during which the Authority provide local sound broadcasting services in accordance with this Part of this Schedule, the Secretary of State shall notify to the Authority the sum which he considers to be the appropriate contribution by that body, in respect of the programme contractors under contracts which continue in force by virtue of paragraph 2(1) above, towards the expenses of the BCC; and the Authority shall pay to the Secretary of State any sum notified to them under this sub-paragraph. (4) Paragraph 2(1) (g) (i) of Schedule 11 to this Act shall have effect during the period referred to in sub-paragraph (3) above as if the reference to the BBC or the Welsh Authority included a reference to the Authority. (5) In this paragraph "the BCC" means the Broadcasting Complaints Commission."). Page 183, line 47, at end insert— ("Provisions relating 'o Broadcasting Standards Council 3A. Part VI of this Act shall have effect as if—

1. (a) section 140(2) of this Act included a reference to any sound programme broadcast by the Authority in accordance with this Part of this Schedule; and
2. (b) the Authority were, in relation to the provision by them of local sound broadcasting services in accordance with this Part of this Schedule, a broadcasting body within the meaning of that Part of this Act.").

Page 184, leave out lines 37 and 38. Page 185, line 6, leave out from ("locality") to end of line 7 and insert ("comprised in the locality in which such broadcasts were for the time being to be provided by another programme contractor under a contract entered into before that time,").

The noble Viscount said: I spoke to these amendments when dealing with Amendment No. 307. I beg to move en bloc.

On Question, amendments agreed to.

Schedule 9, as amended, agreed to.

Clause 123 [Functions exercisable by IBA before transfer date in connection with local sound broadcasting]:

Viscount Ullswater moved Amendments Nos. 309ZC to 309ZJ: Page 99, line 30, leave out ("any relevant transmitting equipment") and insert (", or of an interest in, any relevant assets").

Page 99, line 32, after ("so") insert ("on such terms and"). Page 99, line 33, leave out ("it") and insert ("any such consideration"). Page 99, line 33, leave out ("equipment") and insert ("assets"). Page 99, line 39, at end insert: (" "relevant asset" means any equipment or other asset (of whatever description) which has been used or held by the IBA in connection with the transmission of local sound broadcasts;"). Page 99, leave out lines 44 to 46. Page 99, leave out lines 47 and 48.

The noble Viscount said: I spoke to these amendments when moving Amendment No. 307. I beg to move en bloc.

On Question, amendments agreed to.

Clause 123, as amended, agreed to.

Viscount Ullswater moved Amendment No. 309ZK: After Clause 123, insert the following new clause:

("Transitional arrangements relating to existing cable services Schedule 10 to this Act shall have effect— (a) for the purpose of the regulation by the Commission on and after the transfer date of—

1. (i) diffusion services (within the meaning of Part I of the Cable and Broadcasting Act 1984) which, immediately before that date, were authorised to be provided under that Part of that Act, and
2. (ii) services provided in succession to such services; and

(b) for the purpose of the regulation by the Commission or the Radio Authority on and after the transfer date of services provided in succession to restricted services (within the meaning of that Part of that Act) which, immediately before that date, were authorised to be provided under that Part of that Act.").

On Question, amendment agreed to.

Schedule 10 [Transitional Provisions Relating to Existing Cable Services]:

Viscount Ullswater moved Amendments Nos. 309ZL to 309ZZH: Page 186, line 12, leave out (""relevant licence" means a licence") and insert ("and in Part III of this Schedule "relevant licence" means a licence to provide a prescribed or other diffusion service").

Page 186, line 13, leave out ("(3)"). Page 186, line 38, leave out from ("to") to ("as") in line 40 and insert ("the generality of paragraph 2(3) in Part III of this Schedule, the Commission may, in accordance with that provision, make such variations of a licence which continues in force by virtue of sub-paragraph (1) above"). Page 187, line 6, after ("is") insert ("authorised"). Page 187, line 11, leave out sub-paragraph (3) and insert: ("(3) A local delivery licence granted in pursuance of this paragraph may authorise the licensed service to be provided by wireless telegraphy to such extent as is specified in the licence."). Page 187, line 17, leave out ("reference to fifteen") and insert ("first reference to a period of fifteen"). Page 187, line 28, leave out ("vary the licence") and insert ("by notice served on the licence holder vary the licence, as from the date of its renewal,"). Page 187, line 43, after ("be") insert ("authorised to be"). Page 187, line 44, at end insert ("authorised to be"). Page 188, line 30, at end insert: ("(6) No person shall, in connection with a particular licence to which paragraph 1(1) above applies, be granted both a licence granted in pursuance of this paragraph and a licence granted in pursuance of paragraph 3A below; and that paragraph shall have effect subject to this sub-paragraph."). Page 188, line 30, at end insert: (" Prescribed diffusion services: cable licences to be succeeded on their expiry by local delivery licences 3A.—(1) Subject to the following provisions of this paragraph, a person who is the holder of a licence to provide a prescribed diffusion service, being a licence to which paragraph 1(1) above applies ("the existing licence"), may apply to the Commission for the grant, as from the date on which the existing licence is due to expire ("the expiry date"), of a licence under Part II of this Act to provide a local delivery service for the area in which the prescribed diffusion service is authorised to be provided under the existing licence. (2) An application under sub-paragraph (1)— (a) may be made by the holder of the existing licence not earlier than five years before the expiry date and not later than the relevant date; and (b) must be in writing and specify—

1. (i) the area which would be covered by the applicant's proposed local delivery service, and
2. (ii) the technical means by which that service would be provided.

(3) Where any such application is made before the relevant date, the Commission may postpone the consideration of it by them for as long as they think appropriate but not beyond that date. (4) In sub-paragraphs (2) and (3) "the relevant date" means the date which the Commission determine to be that by which they would need to publish a notice under section 69 of this Act if they were to grant, as from the expiry date, such a licence under Part II of this Act as is mentioned in sub-paragraph (1). (5) Notwithstanding anything in sections 69 to 71 of this Act, where an application under sub-paragraph (1) has been duly made to the Commission, they may only refuse the application if—

1. (a) they propose to grant, as a replacement for the existing licence, a local delivery licence authorising the provision of a local delivery service for an area which would be different from that in which the applicant's service is authorised to be provided under the existing licence ("the franchise area"); or
2. (b) the applicant is not, at the time when he makes his application, providing a prescribed diffusion service throughout the whole of the franchise area; or
3. (c) it appears to them that the applicant's proposed local delivery service would not cover the whole of the franchise area; or
4. (d) it appears to them that any telecommunication system proposed to be used by the applicant in the provision of that service would not be acceptable to the relevant licensing authorities.

(6) A local delivery licence granted in pursuance of this paragraph shall come into force on the expiry date. (7) Subject to sub-paragraph (8), subsections (6) to (9) of section 73 of this Act shall apply in connection with the grant of an application for a local delivery licence under sub-paragraph (1) above as they apply in connection with the grant of an application for the renewal of a local delivery licence under subsection (1) of that section. (8) In the application of those subsections in accordance with sub-paragraph (7)—

1. (a) any reference to the renewal of a local delivery licence stall be construed as a reference to the grant of such a licence in pursuance of this paragraph (and related expressions shall be construed accordingly);
2. (b) in subsection (6) (b), the words from "a different" to "as" shall be omitted; and
3. (c) in subsection (7), the words ", in accordance with sections 69 to 71, a licence" shall be substituted for "a fresh licence".

(9) Sub-paragraphs (3) and (7) to (9) of paragraph 2 above shall have effect in relation to a local delivery licence granted in pursuance of this paragraph as they have effect in relation to such a licence granted in pursuance of that paragraph. (10) In this paragraph "the relevant licensing authorities" has the same meaning as in section 70 of this Act."). Page 188, line 37, after ("being") insert ("authorised to be"). Page 188, line 49, leave out sub-paragraph (3). Page 189, line 12, leave out from ("to") to ("as") in line 14 and insert ("the generality of paragraph 2(3) in Part III of this Schedule, the Commission may, in accordance with that provision, make such variations of a licence which continues in force by virtue of sub-paragraph (1) above"). Page 189, line 15, at end insert: ("(5) Where— (a) a licence to which sub-paragraph (1) applies ("the relevant licence") is due to expire on a particular date in accordance with that sub-paragraph (being a date falling within the period specified in sub-paragraph (6)), and (b) it appears to the Commission that on that date there would be in force either—

1. (i) any such licence to provide a prescribed diffusion service as is referred to in sub-paragraph (1) (b), or
2. (ii) a local delivery licence authorising the provision of a local delivery service for an area consisting of or including the area in which a diffusion service is for the time being provided under the relevant licence ("the relevant service"), but

(c) it also appears to them that on that date the holder of any such licence would not be in a position to provide his licensed service for all of the dwelling-houses for which the relevant service is for the time being provided, the Commission shall so vary the relevant licence as to secure that (subject to sub-paragraph (6)) the licence continues in force until such time subsequent to that date as they may specify in a notice given to the holder of the licence; and the Commission shall not specify a time for the purposes of this sub-paragraph unless they have reasonable grounds for believing that, at that time, the holder of any such licence as is mentioned in paragraph (b) (i) or (ii) above would be in a position to provide his licensed service for all of the dwelling-houses referred to in paragraph (c) above. (6) A licence to which sub-paragraph (1) applies shall not continue in force in accordance with that sub-paragraph or sub-paragraph (5) beyond the end of the period of eight years beginning with the transfer date. (7) If on the date when such a licence ceases to be in force ("the expiry date") either of the conditions specified in sub-paragraph (8) is satisfied, the holder of that licence ("the relevant licence") shall be granted by the Commission, as from the expiry date, a licence under Part II of this Act to provide a local delivery service for the area in which a diffusion service was being provided under the relevant licence immediately before that date. (8) The conditions referred to in sub-paragraph (7) are— (a) that neither of the following is in force, namely—

1. (i) any such licence to provide a prescribed diffusion service as is referred to in subparagraph (1) (b), or
2. (ii) a local delivery licence authorising the provision of a local delivery service for an area consisting of or including the area in which a diffusion service was being provided under the relevant licence immediately before the expiry date;

(b) that any such licence as is mentioned in paragraph (a) (i) or (ii) above is in force but it appears to the Commission that the holder of the licence is not in a position to provide his licensed service for all of the dwelling-houses for which a diffusion service was being provided under the relevant licence immediately before the expiry date. (9) Subject to sub-paragraph (10), the following provisions, namely—

1. (a) sub-paragraphs (7) to (9) of paragraph 2 above, and
2. (b) sub-paragraphs (2) to (5) of paragraph 5 below,

shall have effect in relation to a local delivery licence granted in pursuance of sub-paragraph (7) above as they have effect in relation to such a licence granted in pursuance of paragraph 2 above or (as the case may be) paragraph 5 below. (10) In its application in relation to a licence granted in pursuance of sub-paragraph (7), paragraph 5(4) (a) shall have effect with the substitution of a reference to the date as from which the licence is granted for the reference to the transfer date."). Page 189, line 25, leave out ("being") and insert ("authorised to be"). Page 189, line 32, leave out ("reference to fifteen") and insert ("first reference to a period of fifteen"). Page 189, line 33, at end insert (", and the second reference to a period of fifteen years were a reference to a period of five years"). Page 189, line 44, leave out ("vary the licence") and insert ("by notice served on the licence holder vary the licence, as from the date of its renewal,"). Page 190, line 21, after ("date") insert ("either— (i) "). Page 190, line 22, at end insert (", or (ii) is specified in an order made by the Secretary of State."). Page 190, line 25, after ("being") insert ("authorised to be").

On Question, amendments agreed to.

[Amendment No. 309A not moved.]

Viscount Ullswater moved Amendments Nos. 309B to 309S: Page 190, line 36, leave out sub-paragraph (5) and insert:

("(5) Where— (a) a licence granted under sub-paragraph (2) ("the relevant licence") is due to expire on a particular date in accordance with sub-paragraph (3), and (b) it appears to the Commission that on that date there would be in force either—

1. (i) any such licence to provide a prescribed diffusion service as is referred to in subparagraph (2), or
2. (ii) a local delivery licence authorising the provision of a local delivery service for an area consisting of or including the area in which a diffusion service is for the time being provided under the relevant licence ("the relevant service"), but

(c) it also appears to them that on that date the holder of any such licence would not be in a position to provide his licensed service for all of the dwelling-houses for which the relevant service is for the time being provided, the Commission shall so vary the relevant licence as to secure that (subject to sub-paragraph (5A)) the licence continues in force until such time subsequent to that date as they may specify in a notice given to the holder of the licence; and the Commission shall not specify a time for the purposes of this sub-paragraph unless they have reasonable grounds for believing that, at that time, the holder of any such licence as is mentioned in paragraph (b)(i) or (ii) above would be in a position to provide his licensed service for all of the dwelling-houses referred to in paragraph (c) above. (5A) A licence granted under subsection (2) shall not continue in force in accordance with sub-paragraph (5) beyond the end of the period of eight years beginning with the transfer date. (5B) If on the date when such a licence ceases to be in force ("the expiry date") either of the conditions specified in sub-paragraph (5C) is satisfied, the holder of that licence ("the relevant licence") shall be granted by the Commission, as from the expiry date, a licence under Part II of this Act to provide a local delivery service for the area in which a diffusion service was being provided under the relevant licence immediately before that date. (5C) The conditions referred to in sub-paragraph (5B) are— (a) that neither of the following is in force, namely—

1. (i) any such licence to provide a prescribed diffusion service as is referred to in sub-paragraph (2), or
2. (ii) a local delivery licence authorising the provision of a local delivery service for an area consisting of or including the area in which a diffusion service was being provided under the relevant licence immediately before the expiry date;

(b) that any such licence as is mentioned in paragraph (a)(i) or (ii) above is in force but it appears to the Commission that the holder of the licence is not in a position to provide his licensed service for all of the dwelling-houses for which a diffusion service was being provided under the relevant licence immediately before the expiry date."). Page 191, line 7, after ("(7)") insert ("Subject to sub-paragraph (8)"). Page 191, line 10, after ("sub-paragraph") insert ("(5B) or"). Page 191, line 12, at end insert: ("(8) In its application in relation to a licence granted in pursuance of sub-paragraph (5B) above, paragraph 5(4)(a) shall have effect with the substitution of a reference to the date as from which the licence is granted for the reference to the transfer date."). Page 191, line 12, at end insert: ("(9) In the case of a local delivery licence granted in pursuance of sub-paragraph (6) above, nothing in paragraph 1(1) in Part II of Schedule 2 to this Act shall have the effect of rendering—

1. (a) a local authority, or
2. (b) a body which is controlled by such an authority,

a disqualified person in relation to the licence during the period of five years beginning with the date of its coming into force; and in this sub-paragraph "local authority" has the same meaning as in that Schedule."). Page 191, line 12, at end insert: ("Other diffusion services: services falling partly within and partly outside franchise areas 7A.—(1) Where immediately before the transfer date there is in force under Part I of the 1984 Act a licence to provide a diffusion service which—

1. (a) is not a prescribed diffusion service, but
2. (b) is provided in an area ("the relevant area") only part of which is comprised in the area in which a prescribed diffusion service is for the time being authorised to be provided under a licence to which paragraph 1(1) applies ("the franchise area"),

then (subject to paragraph 6 above)—

1. (i) paragraph 4 above shall apply to the licence to the extent that it authorises the provision of a diffusion service in so much of the relevant area as is comprised in the franchise area, and
2. (ii) paragraph 5(1) above shall apply to the licence to the extent that it authorises the provision of such a service in so much of the relevant area as is not so comprised.

(2) The reference in paragraph 5(1) to the area in which a diffusion service was authorised to be provided immediately before the transfer date shall accordingly be construed, in relation to a licence to which sub-paragraph (1) above applies, as a reference to so much of that area as is not comprised in the franchise area. (3) The reference in paragraph 6(1) above to a licence to provide a diffusion service shall be construed, in relation to a licence to which sub-paragraph (1) above applies—

1. (a) in connection with the application of paragraph 4(1) above, as a reference to the licence to the extent that it authorises the provision of such a service as is mentioned in sub-paragraph (1)(i) above; and
2. (b) in connection with the application of paragraph 5(1) above, as a reference to the licence to the extent that it authorises the provision of such a service as is mentioned in sub-paragraph (1)(ii) above.

(4) Where immediately before the transfer date any such diffusion service as is mentioned in paragraph 7(1) above is provided in an area ("the relevant area") only part of which is comprised in the area in which a prescribed diffusion service is for the time being authorised to be provided under a licence to which paragraph 1(1) above applies ("the franchise area"), then (subject to sub-paragraph (5) below)—

1. (a) paragraph 7(2) above shall apply to the service to the extent that it is, immediately before that date, being provided in so much of the relevant area as is comprised in the franchise area, and
2. (b) paragraph 7(6) above shall apply to the service to the extent that it is then being provided in so much of the relevant area as is not so comprised.

(5) Neither paragraph 7(2) nor paragraph 7(6) shall apply to a diffusion service in accordance with sub-paragraph (4) if the part of the service to which it would otherwise so apply would serve only—

1. (a) a single building, or
2. (b) an area in which there are not more than the prescribed number of dwelling-houses;

and in paragraph (b) "the prescribed number" has the same meaning as in paragraph 6(1) above."). Page 191, line 12, at end insert: ("Restricted services: replacement of existing licences 7B.—(1) Where immediately before the transfer date there is in force under Part I of the 1984 Act a licence to provide a restricted service ("the restricted service licence"), the licence shall cease to have effect on the transfer date; but if he makes the appropriate request before that date the holder of the licence shall—

1. (a) where the restricted service consists in the provision of television programmes, be granted by the Commission as from that date a licence under Part I of this Act to provide a licensable programme service, or
2. (b) where the restricted service consists in the provision of sound programmes, be granted by the Radio Authority as from that date a licence under Part III of this Act to provide a licensable sound programme service,

being a service of such a description as will, in the opinion of the Commission or (as the case may be) the Radio Authority, enable the service to be provided under the licence mentioned in paragraph (a) or (b) to correspond as nearly as possible to the service provided under the restricted service licence. (2) In sub-paragraph (1) "the appropriate request"—

1. (a) in a case to which paragraph (a) of that sub-paragraph applies, means a request to the Commission; and
2. (b) in a case to which paragraph (b) of that sub-paragraph applies, means a request to the Radio Authority.

(3) Nothing in section 42(1) to (3) or (as the case may be) section 81(3)(b) or 106(1) or (2) of this Act shall apply in relation to a licence granted in pursuance of sub-paragraph (1); and any such licence shall (subject to the provisions of Part I or, as the case may be, Part III of this Act) continue in force for the remainder of the period specified in the restricted service licence. (4) Section 3(3) of this Act shall, in its application to a licence granted in pursuance of sub-paragraph (1)(a), have effect as if the reference to Part I of this Act included a reference to this Part of this Schedule; and section 81(4) of this Act shall, in its application to a licence granted in pursuance of sub-paragraph (1)(b), have effect as if the reference to Part III of this Act included a reference to this Part of this Schedule. (5) Except as provided in sub-paragraphs (3) and (4)—

1. (a) Part I of this Act applies to a licence granted in pursuance of sub-paragraph (1)(a) as it applies to any other licence granted under that Part to provide a licensable programme service; and
2. (b) Part III of this Act applies to a licence granted in pursuance of sub-paragraph (1)(b) as it applies to any other licence granted under that Part to provide a licensable sound programme service.

(6) In this paragraph— "licensable programme service" has the same meaning as in Part I of this Act; "licensable sound programme service" has the same meaning as in Part III of this Act; "restricted service" has the same meaning as in Part I of the 1984 Act."). Page 192, line 23, after ("(3)") insert: ("(aa)"). Page 192, line 28, at end insert (", or (bb) vary the period for which—

1. (i) a licence to which paragraph 4(1) in Part II of this Schedule applies, or
2. (ii) a licence granted in pursuance of paragraph 7(2) in that Part,

is to continue in force."). Page 192, line 30, leave out ("4(3)") and insert ("4(5)"). Page 192, line 30, at end insert ("; but any such variation shall be effected by means of a notice served by the Commission on the holder of the licence in question."). Page 192, line 30, at end insert: ("(6) Section 3(6) and (7) of this Act shall apply to a relevant licence as they apply to a licence granted under Part II of this Act."). Page 193, line 46, leave out (""control","). Page 194, line 3, at end insert: ("(aa) any reference to a national or local newspaper is a reference to a newspaper which is, or is to be treated as, a national or local newspaper for the purposes of Part IV of that Schedule;"). Page 195, line 11, leave out ("corporate"). Page 195, leave out line 27.

The noble Viscount said: This group of amendments makes technical amendments to Schedule 10 to the Bill.

Baroness Birk

Can the noble Viscount say whether the grouping includes Amendment No. 309T?

Viscount Ullswater

No, it does not. It stopped one amendment short in that headlong rush.

These amendments all relate to the transitional arrangements for existing cable systems. The new clause gives effect to Schedule 10. It replaces a similar provision which was previously in Clause 122. The clause now deals only with Schedule 9. The other amendments, which are mainly technical, make a number of changes to Schedule 10. There are, however, four additions of substance. It may be helpful to the Committee if I explain them briefly.

First, they give effect to the undertaking made by my honourable friend, the Minister of State in another place, that similar renewal provisions to those in Clause 73 should apply to broadband franchise holders who by virtue of this schedule retain their status under the 1984 Act. Provided they meet the necessary criteria, such operators would be granted a local delivery licence on renewal. Secondly, provision is made to cover the specific transitional problem of SMATV systems under construction in half-built housing developments which, when complete, would cover more than 1,000 households. Thirdly, the amendments make transitional provisions for the licensing of SMATV systems partly within and partly outside cable franchise areas.

Finally, provision is made for restricted services. Any restricted services licence granted under the 1984 Act will cease to have effect on the transfer date; but holders of such licences will be entitled to be granted by the ITC (or Radio Authority) a licensable programme service licence (or a licensable sound programme service licence) in respect of their services. The amendments are of a technical nature. I beg to move.

On Question, amendments agreed to.

Schedule 10 [Transitional provisions relating to existing cable services]:

Viscount Ullswater moved Amendments Nos. 309ZL to 309ZZH: Page 186, line 12, leave out (""relevant licence" means a licence") and insert ("and in Part III of this Schedule "relevant licence" means a licence to provide a prescribed or other diffusion service").

Page 186, line 13, leave out ("(3)"). Page 186, line 38, leave out from ("to") to ("as") in line 40 and insert ("the generality of paragraph 2(3) in Part III of this Schedule, the Commission may, in accordance with that provision, make such variations of a licence which continues in force by virtue of sub-paragraph (1) above"). Page 187, line 6, after ("is") insert ("authorised"). Page 187, line 11, leave out sub-paragraph (3) and insert: ("(3) A local delivery licence granted in pursuance of this paragraph may authorise the licensed service to be provided by wireless telegraphy to such extent as is specified in the licence."). Page 187, line 17, leave out ("reference to fifteen") and insert ("first reference to a period of fifteen"). Page 187, line 28, leave out ("vary the licence") and insert ("by notice served on the licence holder vary the licence, as from the date of its renewal,"). Page 187, line 43, after ("be") insert ("authorised to be"). Page 187, line 44, at end insert ("authorised to be"). Page 188, line 30, at end insert: ("(6) No person shall, in connection with a particular licence to which paragraph 1(1) above applies, be granted both a licence granted in pursuance of this paragraph and a licence granted in pursuance of paragraph 3A below; and that paragraph shall have effect subject to this sub-paragraph."). Page 188, line 30, at end insert: (" Prescribed diffusion services: cable licences to be succeeded on their expiry by local delivery licences 3A.—(1) Subject to the following provisions of this paragraph, a person who is the holder of a licence to provide a prescribed diffusion service, being a licence to which paragraph 1(1) above applies ("the existing licence"), may apply to the Commission for the grant, as from the date on which the existing licence is due to expire ("the expiry date"), of a licence under Part II of this Act to provide a local delivery service for the area in which the prescribed diffusion service is authorised to be provided under the existing licence. (2) An application under sub-paragraph (1)— (a) may be made by the holder of the existing licence not earlier than five years before the expiry date and not later than the relevant date; and (b) must be in writing and specify—

1. (i) the area which would be covered by the applicant's proposed local delivery service, and
2. (ii) the technical means by which that service would be provided.

(3) Where any such application is made before the relevant date, the Commission may postpone the consideration of it by them for as long as they think appropriate but not beyond that date. (4) In sub-paragraphs (2) and (3) "the relevant date" means the date which the Commission determine to be that by which they would need to publish a notice under section 69 of this Act if they were to grant, as from the expiry date, such a licence under Part II of this Act as is mentioned in sub-paragraph (1). (5) Notwithstanding anything in sections 69 to 71 of this Act, where an application under sub-paragraph (1) has been duly made to the Commission, they may only refuse the application if—

1. (a) they propose to grant, as a replacement for the existing licence, a local delivery licence authorising the provision of a local delivery service for an area which would be different from that in which the applicant's service is authorised to be provided under the existing licence ("the franchise area"); or
2. (b) the applicant is not, at the time when he makes his application, providing a prescribed diffusion service throughout the whole of the franchise area; or
3. (c) it appears to them that the applicant's proposed local delivery service would not cover the whole of the franchise area; or
4. (d) it appears to them that any telecommunication system proposed to be used by the applicant in the provision of that service would not be acceptable to the relevant licensing authorities.

(6) A local delivery licence granted in pursuance of this paragraph shall come into force on the expiry date. (7) Subject to sub-paragraph (8), subsections (6) to (9) of section 73 of this Act shall apply in connection with the grant of an application for a local delivery licence under sub-paragraph (1) above as they apply in connection with the grant of an application for the renewal of a local delivery licence under subsection (1) of that section. (8) In the application of those subsections in accordance with sub-paragraph (7)—

1. (a) any reference to the renewal of a local delivery licence shall be construed as a reference to the grant of such a licence in pursuance of this paragraph (and related expressions shall be construed accordingly);
2. (b) in subsection (6)(b), the words from "a different" to "as" shall be omitted; and
3. (c) in subsection (7), the words ", in accordance with sections 69 to 71, a licence" shall be substituted for "a fresh licence".

(9) Sub-paragraphs (3) and (7) to (9) of paragraph 2 above shall have effect in relation to a local delivery licence granted in pursuance of this paragraph as they have effect in relation to such a licence granted in pursuance of that paragraph. (10) In this paragraph "the relevant licensing authorities" has the same meaning as in section 70 of this Act."). Page 188, line 37, after ("being") insert ("authorised to be"). Page 188, line 49, leave out sub-paragraph (3). Page 189, line 12, leave out from ("to") to ("as") in line 14 and insert ("the generality of paragraph 2(3) in Part III of this Schedule, the Commission may, in accordance with that provision, make such variations of a licence which continues in force by virtue of sub-paragraph (1) above"). Page 189, line 15, at end insert: ("(5) Where— (a) a licence to which sub-paragraph (1) applies ("the relevant licence") is due to expire on a particular date in accordance with that sub-paragraph (being a date falling within the period specified in sub-paragraph (6)), and (b) it appears to the Commission that on that date there would be in force either—

1. (i) any such licence to provide a prescribed diffusion service as is referred to in sub-paragraph (1)(b), or
2. (ii) a local delivery licence authorising the provision of a local delivery service for an area consisting of or including the area in which a diffusion service is for the time being provided under the relevant licence ("the relevant service"), but

(c) it also appears to them that on that date the holder of any such licence would not be in a position to provide his licensed service for all of the dwelling-houses for which the relevant service is for the time being provided, the Commission shall so vary the relevant licence as to secure that (subject to sub-paragraph (6)) the licence continues in force until such time subsequent to that date as they may specify in a notice given to the holder of the licence; and the Commission shall not specify a time for the purposes of this sub-paragraph unless they have reasonable grounds for believing that, at that time, the holder of any such licence as is mentioned in paragraph (b)(i) or (ii) above would be in a position to provide his licensed service for all of the dwelling-houses referred to in paragraph (c) above. (6) A licence to which sub-paragraph (1) applies shall not continue in force in accordance with that sub-paragraph or sub-paragraph (5) beyond the end of the period of eight years beginning with the transfer date. (7) If on the date when such a licence ceases to be in force ("the expiry date") either of the conditions specified in sub-paragraph (8) is satisfied, the holder of that licence ("the relevant licence") shall be granted by the Commission, as from the expiry date, a licence under Part II of this Act to provide a local delivery service for the area in which a diffusion service was being provided under the relevant licence immediately before that date. (8) The conditions referred to in sub-paragraph (7) are— (a) that neither of the following is in force, namely—

1. (i) any such licence to provide a prescribed diffusion service as is referred to in sub-paragraph (1)(b), or
2. (ii) a local delivery licence authorising the provision of a local delivery service for an area consisting of or including the area in which a diffusion service was being provided under the relevant licence immediately before the expiry date;

(b) that any such licence as is mentioned in paragraph (a)(i) or (ii) above is in force but it appears to the Commission that the holder of the licence is not in a position to provide his licensed service for all of the dwelling-houses for which a diffusion service was being provided under the relevant licence immediately before the expiry date. (9) Subject to sub-paragraph (10), the following provisions, namely—

1. (a) sub-paragraphs (7) to (9) of paragraph 2 above, and
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2. (b) sub-paragraphs (2) to (5) of paragraph 5 below,

shall have effect in relation to a local delivery licence granted in pursuance of sub-paragraph (7) above as they have effect in relation to such a licence granted in pursuance of paragraph 2 above or (as the case may be) paragraph 5 below. (10) In its application in relation to a licence granted in pursuance of sub-paragraph (7), paragraph 5(4)(a) shall have effect with the substitution of a reference to the date as from which the licence is granted for the reference to the transfer date."). Page 189, line 25, leave out ("being") and insert ("authorised to be"). Page 189, line 32, leave out ("reference to fifteen") and insert ("first reference to a period of fifteen"). Page 189, line 33, at end insert (", and the second reference to a period of fifteen years were a reference to a period of five years"). Page 189, line 44, leave out ("vary the licence") and insert ("by notice served on the licence holder vary the licence, as from the date of its renewal,"). Page 190, line 21, after ("date") insert ("either— (i) "). Page 190, line 22, at end insert (", or (ii) is specified in an order made by the Secretary of State."). Page 190, line 25, after ("being") insert ("authorised to be").

The noble Viscount said: I have spoken to these amendments with Amendment No. 309ZK. I beg to move.

On Question, amendments agreed to.

Lord Morris moved Amendment No. 309A: Page 190, line 31, leave out ("five years") and insert ("one year").

The noble Lord said: As noble Lords will be aware, the Bill clearly reflects in these technologically volatile times the need for flexibility of technology in the broadcasting market-place and thus enhances consumer choice in broadcasting received in the home. In that, the Government deserve our support and admiration.

I am moving the amendment because there is one aspect of customer choice, and flexibility of the use of technology, that the Government have not properly addressed. That is the shift from narrowband technology to broadband cable technology. As the Bill stands, where a broadband cable operator offering a fully interactive service is franchised by the ITC, or has been franchised previously by the Cable Authority, to provide a service where a narrowband operator is already in situ, the broadband operator will find himself competing on a completely inequitable footing.

The Committee will be aware that narrowband cable operators can provide only a limited service to the customers that they serve. Their obsolescent technology has a capacity of, in most cases, only four to six channels. A few carry more. Unlike broadband operators, they cannot provide interactive services such as home shopping, banking, security services, switching and a myriad of other services which will shortly be on the market.

It was that lack of flexibility of the use of modern technology, thus leading to lack of consumer choice, that the Bill was intended to address. The Government have accepted the principle that, because of its benefits over narrowband, broadband should be encouraged. Only that can explain why the Bill provides that the ITC shall not renew a narrowband operator's licence if, at the licence renewal date, a broadband operator has started to provide a service in the same locality. That is quite reasonable. It promotes investment in new technology, giving the consumer a better service and greater choice.

It is important that the playing field in that regard be set as level as possible. The new technology broadband operators, offering comprehensive interactive services, will be squeezed out if the Bill remains as it is, giving the narrowband operators a five-year period before they need to renew a licence.

My amendment also seeks to dispel the fear that broadband cable will never displace the old narrowband technology because the commercial odds will be stacked against it. I do not believe that that is the Government's intention. The amendment would help in that regard. I beg to move.

6.45 p.m.

Viscount Ullswater

My noble friend's amendment touches on a complex area of the Bill, and it may be helpful if I were to sketch in the background.

As the law stands, cable systems carrying only BBC and IBA services (including DBS) do not need to be licensed by the Cable Authority. That is because the main purpose of licensing is to regulate programme content. Since BBC and IBA services are separately regulated, licensing by the Cable Authority would be otiose. However, under the Bill, all systems serving more than 1,000 homes will need to be licensed by the ITC, unless they carry only the four terrestrial channels. So systems serving more than 1,000 homes which carry BSB as well as the terrestrial channels will for the first time need to be licensed under the Bill. That should be welcomed by cable operators, as they have expressed concern in the past about the non-licensability of systems carrying BSB.

However, that change gives rise to a need for transitional arrangements to ensure that the presently unlicensed systems can continue in operation. The Bill therefore provides that they should be given five-year licences. My noble friend's amendment would reduce that to one year in those cases where the system fell within a franchise area. A balance must be struck between the legitimate expectations of the operators of the presently unlicensed systems and the interests of the cable franchise holder. As things stand, the former can look forward to an indefinite regulatory life. There is no mechanism to bring those systems to an end, even where there is a cable franchise holder ready and willing to provide an alternative service. The Bill will reduce that expectation to a five-year life. That reduction is balanced by the fact that the operator will be able to start carrying satellite channels other than BSB, but reducing the licence length to one year, as my noble friend suggests, would be rather unfair. The operator would find that, as a result of an Act of Parliament, he would have to shut down or sell his business within a year.

I recognise that my noble friend is trying to protect the interests of cable operators, but the proposals in the Bill take proper account of their interests by limiting the licence length to five years. I think that my noble friend is seeking to tilt the balance too far in favour of the cable operator. In the light of those arguments, I hope that my noble friend will feel able to withdraw his amendment.

Lord Morris

I have listened with care to what my noble friend has said. Obviously, I shall need time to consider what he has said in print because I do not have the wit to pick up all that he said on this complicated subject. I may write to him if there is any misunderstanding or a need for clarification on my part. In the meantime, I beg leave to withdraw the amendment.

Amendment, by leave, withdrawn.

Viscount Ullswater moved Amendments Nos. 309B to 309S: Page 190, line 36, leave out sub-paragraph (5) and insert:

("(5) Where— (a) a licence granted under sub-paragraph (2) ("the relevant licence") is due to expire on a particular date in accordance with sub-paragraph (3), and (b) it appears to the Commission that on that date there would be in force either—

1. (i) any such licence to provide a prescribed diffusion service as is referred to in sub-paragraph (2), or
2. (ii) a local delivery licence authorising the provision of a local delivery service for an area consisting of or including the area in which a diffusion service is for the time being provided under the relevant licence ("the relevant service"), but

(c) it also appears to them that on that date the holder of any such licence would not be in a position to provide his licensed service for all of the dwelling-houses for which the relevant service is for the time being provided, the Commission shall so vary the relevant licence as to secure that (subject to sub-paragraph (5A)) the licence continues in force until such time subsequent to that date as they may specify in a notice given to the holder of the licence; and the Commission shall not specify a time for the purposes of this sub-paragraph unless they have reasonable grounds for believing that, at that time, the holder of any such licence as is mentioned in paragraph (b)(i) or (ii) above would be in a position to provide his licensed service for all of the dwelling-houses referred to in paragraph (c) above. (5A) A licence granted under subsection (2) shall not continue in force in accordance with sub-paragraph (5) beyond the end of the period of eight years beginning with the transfer date. (5B) If on the date when such a licence ceases to be in force ("the expiry date") either of the conditions specified in sub-paragraph (5C) is satisfied, the holder of that licence ("the relevant licence") shall be granted by the Commission, as from the expiry date, a licence under Part II of this Act to provide a local delivery service for the area in which a diffusion service was being provided under the relevant licence immediately before that date. (5C) The conditions referred to in sub-paragraph (5B) are— (a) that neither of the following is in force, namely—

1. (i) any such licence to provide a prescribed diffusion service as is referred to in subparagraph (2), or
2. (ii) a local delivery licence authorising the provision of a local delivery service for an area consisting of or including the area in which a diffusion service was being provided under the relevant licence immediately before the expiry date;

(b) that any such licence as is mentioned in paragraph (a)(i) or (ii) above is in force but it appears to the Commission that the holder of the licence is not in a position to provide his licensed service for all of the dwelling-houses for which a diffusion service was being provided under the relevant licence immediately before the expiry date."). Page 191, line 7, after ("(7)") insert ("Subject to sub-para graph (8)"). Page 191, line 10, after ("sub-paragraph") insert ("(5B) or"). Page 191, line 12, at end insert: ("(8) In its application in relation to a licence granted in pursuance of sub-paragraph (5B) above, paragraph 5(4)(a) shall have effect with the substitution of a reference to the date as from which the licence is granted for the reference to the transfer date."). Page 191, line 12, at end insert: ("(9) In the case of a local delivery licence granted in pursuance of sub-paragraph (6) above, nothing in paragraph 1(1) in Part II of Schedule 2 to this Act shall have the effect of rendering—

1. (a) a local authority, or
2. (b) a body which is controlled by such an authority,

a disqualified person in relation to the licence during the period of five years beginning with the date of its coming into force; and in this sub-paragraph "local authority" has the same meaning as in that Schedule."). Page 191, line 12, at end insert: ("Other diffusion services: services falling partly within and partly outside franchise areas 7A.—(1) Where immediately before the transfer date there is in force under Part I of the 1984 Act a licence to provide a diffusion service which—

1. (a) is not a prescribed diffusion service, but
2. (b) is provided in an area ("the relevant area") only part of which is comprised in the area in which a prescribed diffusion service is for the time being authorised to be provided under a licence to which paragraph 1(1) applies ("the franchise area"),

then (subject to paragraph 6 above)—

1. (i) Paragraph 4 above shall apply to the licence to the extent that it authorises the provision of a diffusion service in so much of the relevant area as is comprised in the franchise area, and
2. (ii) paragraph 5(1) above shall apply to the licence to the extent that it authorises the provision of such a service it so much of the relevant area as is not so comprised.

(2) The reference in paragraph 5(1) to the area in which a diffusion service was authorised to be provided immediately before the transfer date shall accordingly be construed, in relation to a licence to which sub-paragraph (1) above applies, as a reference to so much of that area as is not comprised in the franchise area. (3) The reference in paragraph 6(1) above to a licence to provide a diffusion service shall be construed, in relation to a licence to which sub-paragraph (1) above applies—

1. (a) in connection with the application of paragraph 4(1) above, as a reference to the licence to the extent that it authorises the provision of such a service as is mentioned in sub-paragraph (1)(i) above; and
1528
2. (b) in connection with the application of paragraph 5(1) above, as a reference to the licence to the extent that it authorises the provision of such a service as is mentioned in sub-paragraph (1)(ii) above.

(4) Where immediately before the transfer date any such diffusion service as is mentioned in paragraph 7(1) above is provided in an area ("the relevant area") only part of which is comprised in the area in which a prescribed diffusion service is for the time being authorised to be provided under a licence to which paragraph 1(1) above applies ("the franchise area"), then (subject to sub-paragraph (5) below)—

1. (a) paragraph 7(2) above shall apply to the service to the extent that it is, immediately before that date, being provided in so much of the relevant area as is comprised in the franchise area, and
2. (b) paragraph 7(6) above shall apply to the service to the extent that it is then being provided in so much of the relevant area as is not so comprised.

(5) Neither paragraph 7(2) nor paragraph 7(6) shall apply to a diffusion service in accordance with sub-paragraph (4) if the part of the service to which it would otherwise so apply would serve only—

1. (a) a single building, or
2. (b) an area in which there are not more than the prescribed number of dwelling-houses;

and in paragraph (b) "the prescribed number" has the same meaning as in paragraph 6(1) above."). Page 191, line 12, at end insert: ("Restricted services: replacement of existing licences 7B.—(1) Where immediately before the transfer date there is in force under Part I of the 1984 Act a licence to provide a restricted service ("the restricted service licence"), the licence shall cease to have effect on the transfer date; but if he makes the appropriate request before that date the holder of the licence shall—

1. (a) where the restricted service consists in the provision of television programmes, be granted by the Commission as from that date a licence under Part I of this Act to provide a licensable programme service, or
2. (b) where the restricted service consists in the provision of sound programmes, be granted by the Radio Authority as from that date a licence under Part III of this Act to provide a licensable sound programme service,

being a service of such a description as will, in the opinion of the Commission or (as the case may be) the Radio Authority, enable the service to be provided under the licence mentioned in paragraph (a) or (b) to correspond as nearly as possible to the service provided under the restricted service licence. (2) In sub-paragraph (1) "the appropriate request"—

1. (a) in a case to which paragraph (a) of that sub-paragraph applies, means a request to the Commission; and
2. (b) in a case to which paragraph (b) of that sub-paragraph applies, means a request to the Radio Authority.

(3) Nothing in section 42(1) to (3) or (as the case may be) section 81(3)(b) or 106(1) or (2) of this Act shall apply in relation to a licence granted in pursuance of sub-paragraph (1); and any such licence shall (subject to the provisions of Part I or, as the case may be, Part III of this Act) continue in force for the remainder of the period specified in the restricted service licence. (4) Section 3(3) of this Act shall, in its application to a licence granted in pursuance of sub-paragraph (1)(a), have effect as if the reference to Part I of this Act included a reference to this Part of this Schedule; and section 81(4) of this Act shall, in its application to a licence granted in pursuance of sub-paragraph (1)(b), have effect as if the reference to Part III of this Act included a reference to this Part of this Schedule. (5) Except as provided in sub-paragraphs (3) and (4)—

1. (a) Part I of this Act applies to a licence granted in pursuance of sub-paragraph (1)(a) as it applies to any other licence granted under that Part to provide a licensable programme service; and
2. (b) Part III of this Act applies to a licence granted in pursuance of sub-paragraph (1)(b) as it applies to any other licence granted under that Part to provide a licensable sound programme service.

(6) In this paragraph— "licensable programme service" has the same meaning as in Part I of this Act; "licensable sound programme service" has the same meaning as in Part III of this Act; "restricted service" has the same meaning as in Part I of the 1984 Act."). Page 192, line 23, after ("(3)") insert: ("(aa)"). Page 192, line 28, at end insert (", or (bb) vary the period for which—

1. (i) a licence to which paragraph 4(1) in Part II of this Schedule applies, or
2. (ii) a licence granted in pursuance of paragraph 7(2) in that Part,

is to continue in force."). Page 192, line 30, leave out ("4(3)") and insert ("4(5)"). Page 192, line 30, at end insert ("; but any such variation shall be effected by means of a notice served by the Commission on the holder of the licence in question."). Page 192, line 30, at end insert: ("(6) Section 3(6) and (7) of this Act shall apply to a relevant licence as they apply to a licence granted under Part II of this Act."). Page 193, line 46, leave out (""control","). Page 194, line 3, at end insert: ("(aa) any reference to a national or local newspaper is a reference to a newspaper which is, or is to be treated as, a national or local newspaper for the purposes of Part IV of that Schedule;"). Page 195, line 11, leave out ("corporate"). Page 195, leave out line 27.

The noble Viscount said: I have spoken to these amendments with Amendment No. 309ZK. I beg to move.

On Question, amendments agreed to.

Schedule 10, as amended, agreed to.

Clauses 124 to 127 agreed to.

Viscount Ullswater moved Amendment No. 309T: After Clause 127, insert the following new clause: ("Loans by Secretary of State to nominated company

.—(1) As from the transfer date the Secretary of State may, with the consent of the Treasury, make loans to the nominated company out of money provided by Parliament; but no loan shall be made by him under this section at a time when the company has ceased to be wholly owned by the Crown. (2) The aggregate amount outstanding in respect of the principal of loans made by the Secretary of State under this section shall not exceed the limit specified in subsection (3). (3) That limit is £20 million or such greater sum, not exceeding £100 million, as the Secretary of State may from time to time specify by order made with the consent of the Treasury. (4) Any loan made by the Secretary of State under this section shall be repaid to him at such times and by such methods, and interest on the loan shall be paid to him at such times and at such rates, as he may from time to time direct with the consent of the Treasury. (5) An order shall not be made by the Secretary of State under this section unless a draft of it has been laid before and approved by a resolution of the House of Commons.").

The noble Viscount said: In moving this amendment I shall speak also to Amendments Nos. 309U to 309Z. These are technical provisions which seek to regulate the transmission company's borrowing for the period which we intend should be kept as short as possible during which it remains wholly owned by the Crown. I believe that I answered the noble Lord, Lord Thomson of Monifieth, about that transfer at the end of 1990. They are a common feature in privatisation statutes.

The new clause will limit the total funds which may be lent to the company from the Exchequer. We do not expect to need to make significant loans; but it is clearly important that we have the facility, should the need for government loan-funding arise before the company is privatised. Advances will be made only from money voted by Parliament and will be subject to statutory maxima. In the unlikely event of the company needing advances of more than £20 million, an affirmative order would need to be made before the limit could be increased. Advances of more than £100 million would be excluded in any event.

The third amendment, Amendment No. 309W to Clause 28, read with Clause 124(1), makes it possible for the Secretary of State to inject debt into the transmission company before it is sold. Enabling the company to be sold in this way might have technical advantages in managing the proceeds of the privatisation. A final decision on this, and the exact method of sale, has not yet been taken. I believe that I also indicated that on the last amendment. We think that it would be wrong to close off this option. The other amendments are simply drafting matters. I commend the provisions to the Committee.

Baroness Birk

Perhaps I may ask some questions about the amendments. Probably it is my lack of understanding that necessitates them. The loan will be used to set up the company to start with, as I understand it. The Government have received a great many offers—about 20—to take the company over. How will they decide? Once again, may we know what the employee participation will be in all this? I believe that I am right in saying that the ITV companies and the BBC are excluded from these sales. Can the Minister say specifically what the money will be spent on? Is it general infrastructure? Some £20 million, rising to £100 million, is a lot of money, and I hope that it does not somehow manage to disappear.

What are the likely terms of repayment and at what interest rates? If that is too involved, perhaps the Minister can say how it ties up with interest rates generally. How soon will the loan be repaid? In what segments, and how? I am sorry to ask these complicated questions but I have only just read the amendment, and it is difficult to understand.

A point arises with all these amendments—and I gather that many were tabled the other evening. We are trying to understand them—some of us less well than others. If when we go through them again, reading in Hansard how the Minister explained them —he has explained them as well as he possibly can at this stage—if we are unhappy about some of the points or if questions arise, I take it that they will not be unwelcome at the next stage of proceedings. I find it difficult to take matters in at this rate and density.

The amendments may be transitional or technical, as the Minister said; but a number are more than what I would call technical. I am rather worried, I feel they are whooshing past us without our saying, "Hey, wait a moment, we're not quite sure about that".

Viscount Ullswater

I must agree with the noble Baroness that the amendments have been put down at a late stage. They are complicated and need a certain amount of consideration. I have been advised that it would be perfectly in order to examine them in some detail and read the replies I have given the noble Baroness. Then if need be, she may come back at another stage with probing amendments in order to elicit more information.

The noble Baroness asked one or two questions and I shall try to answer as many as I can. First, the loans will not be used for the purpose of setting up the company. It is unlikely that there will be any requirement for them at all. However, it is a matter of safeguarding the provision that if loans are required, the Bill (and then the Act) will allow for them to be made. We dealt with the method of sale, and I said on a previous occasion that it had not been finally decided. Whatever the exact method, the process will be fair, open and competitive.

Baroness Birk

Perhaps the noble Viscount will allow me to put a further question. Will the method of sale be decided during the progress of the Bill or afterwards, once it has become law?

Viscount Ullswater

; I fancy that it will be done after the Bill becomes an Act.

Baroness Birk

If the Minister cannot tell me now, perhaps he can tell me definitely at the next stage. I do not fancy his "I fancy".

Viscount Ullswater

I confirm that the process I am talking about is, as I indicated, that the company would reach the private sector, it would be vested in a company wholly-owned by the Crown at the end of 1990. By that time the Broadcasting Bill will be an Act.

The loans will be subject to interest at normal base rates. The terms would be negotiated when the loans are required. It is important to stress that at the moment no loans are planned so it would be wrong to leave the impression that loans will be made.

Lord Thomson of Monifieth

The method of privatising one half of the public broadcasting transmission system of this country is something about which Parliament is entitled to know a good deal more before the Bill finally becomes an Act.

I feel some sympathy for the Minister who is wrestling with these late amendments. I suspect they came from a department other than the Home Office at this late stage. We need a good deal more information about the Government's intentions at a later stage in the proceedings. For example, can the Minister say something now or perhaps write to me later about how the privatisation of the IBA side of the transmission system will be performed in relation to the BBC? The United Kingdom has a single broadcasting transmission system. It is shared 50–50 by the BBC and IBA at present. The BBC owns half the sites and, in rough terms, the IBA owns half the sites. I have visited a number of sites where part of the ground belongs to the BBC, and part to the IBA. Unscrambling that omelette must present some problems. We should like to know a little more about it.

7 p.m.

Viscount Ullswater

I agree that these are complicated matters. I believe the right course to follow at the moment is that I should write to the noble Lord and send a copy of that letter to the noble Baroness, Lady Birk. These matters need to be considered in some detail. The noble Lord realises that these amendments have only just been tabled and that no decision has been taken on the method of sale. It is more likely to be a trade sale than a public flotation, but I have no further details on that. However, I shall write to the noble Lord.

Lord Airedale

Perhaps a copy of the letter can be placed in the Library so that the rest of us may be made aware of the position.

Viscount Ullswater

I apologise if I did not make that point clear. I shall of course place a copy of the letter in the Library.

Baroness Birk

Am I right in assuming that a Price Waterhouse report will be issued on the method of sale? Will the Government publish that report?

Viscount Ullswater

My information is that it will not be published.

Baroness Birk

Why should such a report not be made public once a company has been nominated? We are talking about public money.

Viscount Ullswater

It is a question of the Government taking advice on the matter of privatisation. In other cases, the Government do not necessarily publish all the details of reports on methods of privatisation.

Baroness Birk

That is a pity. The Government might not get into such a mess if they published such details.

On Question, amendment agreed to.

Clause 128 [Temporary restriction on borrowings of nominated company]:

Viscount Ullswater moved Amendments Nos. 309U to 309W: Page 102, line 7, after ("means") insert: ("(a) ")

Page 102, line 8, after ("than") insert: ("(i) ") Page 102, line 9, at end insert (", and (ii) loans made to that company by the Secretary of State under section (Loans by Secretary of State to nominated company); and (b) loans which are to be treated as having been made to that company, including loans which are to be treated as having been so made by virtue of the issue of debentures in pursuance of section 124.").

The noble Viscount said: I beg to move Amendments Nos. 309U to 309W en bloc. I have already spoken to these amendments with Amendment No. 309T.

On Question, amendments agreed to.

Clause 128, as amended, agreed to.

Clause 129 [Interpretation of Part IV]:

Viscount Ullswater moved Amendments Nos. 309X to 309Z: Page 102, line 12, at end insert:

(""debentures" includes debenture stock;"). Page 102, line 18, leave out from ("company") to end of line 19. Page 102, line 23, at end insert: ("(1A) Other expressions used in this Part which are also used in the Broadcasting Act 1981 have the same meaning as in that Act.").

The noble Viscount said: I beg to move Amendments Nos. 309X to 309Z en bloc. I have already spoken to these amendments with Amendment No. 309T.

On Question, amendments agreed to.

Clause 129, as amended, agreed to.

Clause 130 agreed to.

Viscount Ullswater

This may be a convenient time to break for dinner. I suggest that we should not return to the Committee stage before 8 p.m. I beg to move that the House do now resume.

Moved accordingly, and, on Question, Motion agreed to.

House resumed.