PART 1A CHANNEL 5 LICENCES

HL Deb 02 July 2003 vol 650 cc955-82

Ban on newspaper proprietors holding a Channel 5 licence

6A (1) A person is not to hold a Channel 5 licence if—

1. (a) he runs a national newspaper which for the time being has a national market share of 20 per cent. or more; or
2. (b) he runs national newspapers which for the time being together have a national market share of 20 per cent. or more.

(2) For the purposes of this paragraph, each of the following shall be treated as holding a Channel 5 licence—

1. (a) the actual licence holder; and
2. (b) every person connected with the actual licence holder.

(3) The provisions of paragraphs 2 to 4 of this Schedule shall apply for the purposes of this Part of this Schedule insofar as they relate to national newspapers as if a Channel 5 licence were a licence to provide a Channel 3 service."

The noble Lord said: My Lords, in the light of the very important statement made by the Minister today about plurality and its effect on the Bill, I shall not move this amendment.

[Amendment No. 200 not moved.]

Lord Eatwell

moved Amendment No. 201:

Page 430, line 30, at beginning insert "Subject to subparagraph (1A),"

The noble Lord said: My Lords, in moving the amendment, I remind noble Lords of the declaration of interest that I made some time ago. I retabled the amendments that I first tabled in Committee because, sadly, there has been no response from the Government to the arguments made at that time.

Perhaps I may place the amendments in context. They concern the ownership of local digital multiplexes—the transmission platforms for the new local digital radio stations. Noble Lords will be aware that the Government regard digital radio as the medium of the future and have encouraged the commercial sector to invest heavily in transmission facilities, new stations and new programming. The commercial radio industry has responded by investing more than £100 million in those facilities, covering 85 per cent of the country. In contrast, the BBC's digital radio system covers only 65 per cent of the country.

Now that the industry has fulfilled the Government's policy goals, the Government have decided to kick it in the teeth by imposing a tighter regulatory regime than was the case when those investments were made. At present, there are no numerical limits on the number of multiplex licences that any one person may hold. The Government have produced no evidence whatever to suggest that that has been in any way against the public interest, yet they propose that a person may own only one local multiplex in a local coverage area.

As was pointed out in Committee, that fails to take account of an existing overlap between the multiplex serving Kent and the multiplex in London, which could prevent Capital Radio owning the multiplex in Kent, where it owns the heritage local radio service. The noble Lord, Lord Davies of Oldham, dismissed that case as "an anomaly" and, indeed, rested most of his argument on that. He declared that it was a, unique situation [that only affects London] … and is unlikely to be repeated".—[Official Report, 5/6/03; col. 1527.]

I regret to say that the noble Lord was wrong. Exactly the same situation holds in Scotland. The multiplexes in Ayr and Glasgow—both owned by the same company, which is also the heritage local radio company—also overlap. What does the noble Lord intend to do about this Scottish anomaly and any further anomalies that will occur once one looks far more carefully at the structure of the industry and, indeed, as more local multiplexes are licensed?

However, it is not the noble Lord's mistake in Committee on which this case rests. The questions relating to anomalies are not really the issue; it is the logic of the noble Lord's argument that is faulty. He argued that the Government sought to sustain plurality by restricting the ownership of transmission systems, in particular, in London. Referring to London, with our three local multiplexes, he declared: From the point of view of plurality, London is such a large and important market that it is entirely reasonable to ensure that no one multiplex licence holder should be able to determine two-thirds of London's digital radio stations".—[Official Report, 5/6/03; col. 1527.]

That was the noble Lord's argument. But he seems to have forgotten that the Government have already agreed that the restriction on local radio station ownership will obey the formula of 2 plus 1—that is, a minimum of two commercial owners in any one area, the "plus 1" being the BBC. Thus, the Government have accepted that there could be two providers of local programming and that that would ensure plurality. Yet the noble Lord wants three owners of transmission mechanisms; I repeat: two stations producing the programmes and three owners of transmission mechanisms. Why? That is a nonsense. It is the programming that matters and not the transmission systems, but the noble Lord wants more transmission systems than local owners.

My amendments would allow any one owner to own up to two multiplexes in one area. In other words, I entirely accept a restriction in the currently unrestricted environment, but it is one that applies to two owners in one area. Remarkably, this simple amendment solves at one stroke both the anomaly in Kent and London and that north of the Tweed, and it makes the regulation of transmission ownership consistent with the regulation of station ownership. Acceptance of my amendments would also suggest that the Government are not reneging on their previous commitment to invest in digital services.

I hope that the noble Lord will now see the logic of accepting my amendments or, at the very least, that he will agree to meet me before Third Reading to discuss these matters. I beg to move.

7.30 p.m.

Lord Davies of Oldham

My Lords, it goes without saying that if I fail to persuade my noble friend to agree with the argument I am about to present—and I start in a non-too-optimistic vein—I shall be delighted to meet him after the completion of this stage of the Bill in order to see if we can make further progress. However, I hope that I can explain to him and to the House better than I appear to have done in Committee why the Government take the position they do.

I readily acknowledge the strength of my noble friend's case in stating that there has been a significant investment in the industry; £100 million to date. I paid due tribute on the previous occasion and I agree that with that investment the UK leads the world in this area. That is a real achievement and we would not want in any way, shape or form to put that investment in jeopardy or to deter further investment.

We support further investment in digital radio in the UK. With his great knowledge of the industry, my noble friend will have recognised that we have amended the Bill so as to extend by four years the period during which a multiplex licence can be automatically renewed. That is a recognition of the investment that has been made. But the main support has been through the significant changes we are introducing to the analogue radio market. The industry has frequently, and rightly, pointed out that it can only support the development of digital radio through its profits from its analogue services. As everyone is aware, we have taken enormous steps to liberalise the ownership rules for local and national radio. This should enable consolidation, better services, greater efficiencies and greater profits. This, in turn, enables the industry to increase the necessary digital investment.

However, the support for further development must also be balanced with the need to ensure that there are adequate ownership rules, so as to encourage plurality. This is as important for multiplexes as it is for the radio services themselves.

A local radio multiplex is the means by which terrestrial digital radio services are broadcast to an area and can carry up to 10 programme services. The multiplex owner is the gatekeeper. He plays a crucial role, as he is entirely responsible for selecting which services the multiplex carries, subject to the requirement not to discriminate between service providers. It is a position of considerable influence.

In addition to this, we propose to bring forward an order made under Schedule 14 to the Bill under which the multiplex operator would be able to own up to 55 per cent of the services broadcast on a multiplex—five services on a multiplex of 10—regardless of whether he owned the multiplex in question.

The media ownership rules are concerned with plurality, and a need to avoid too much influence falling into too few hands. We clearly need some plurality rules in this area. The question—and it is the issue between us—is what is an appropriate level of intervention. We have aimed to make the rules as light as possible consistent with the need to maintain a minimum level of plurality. We have therefore decided that there should be no limits to the total number of local radio multiplexes in the United Kingdom that any one person can hold. There is only one restriction on local multiplex ownership—that no one can hold two overlapping multiplexes, although I recognise the point which my noble friend made in respect of the Kent and London overlap.

The licences in Scotland have already been awarded under the existing rules and we are introducing those rules for the future and can amend them by order in the future. The situation will not arise again under the current rollout of digital. I acknowledge that on the previous occasion I quoted the single English exception to the position. My noble friend has rightly drawn to my attention that, in all honesty, I ought to have mentioned the fact that it was an exception in Scotland.

As regards intervention, we are making the rules as light as possible. We therefore maintain that if circumstances change the Bill allows us to change the ownership rules. My noble friend will recognise that we are in the early phase of the digital rollout. I can assure him that in no other case will three multiplexes be licensed to one owner. If more spectrum is made available for digital radio, it is unlikely to be earlier than 2007. I believe that the introduction of new spectrum would be the appropriate time to consider relaxing the multiplex ownership rules, hut not now.

My noble friend, with his usual eloquence, has made a powerful case. I realise that he still has points of difference with the Government over this matter. I am merely saying that, within the framework of the Bill, we will have flexibility to adjust the situation in future, but we are striking a balance between the need for the necessary investment and the needs of the wider community for proper plurality.

Lord Eatwell

My Lords, before my noble friend sits down, will he answer the point that in London the Government have already agreed that there can be a minimum of two owners of radio stations, ensuring plurality, yet he wants there to be three multiplex owners? How does the fact that there are three transmission systems add to the plurality when you can have two owners of programmes?

Lord Davies of Oldham

My Lords, it looks as though my noble friend is no more enthusiastic about the argument I have presented on this occasion than he was in Committee. I therefore unreservedly acknowledge the fact that we have some issues to discuss and I should be pleased to hold that meeting with him before Third Reading.

Lord Eatwell

My Lords, I am grateful to my noble friend for his reply. It is not quite what I hoped for. I hoped that the irrefutable logic of my arguments would penetrate the Government's carapace of defence. However, we will have a meeting about the issue when I hope that his attempt to defend the indefensible will be effectively exposed and the Government will realise that they have made a bit of a mess of this issue.

In the meantime, looking forward to that meeting, I beg leave to withdraw the amendment.

Amendment, by leave, withdrawn.

[Amendment No. 202 not moved.]

Clause 343 [Restrictions relating to nominated news providers]:

[Amendments Nos. 203 and 204 not moved.]

Clause 348 [Variation of local licence following change of control]:

[Amendment No. 205 not moved.]

Lord McIntosh of Haringey

moved Amendment No 205A:

Page 305, line 9, at end insert— ( ) The matters to which OFCOM must have regard in determining for the purposes of this section the character of a local sound broadcasting service, include, in particular, the selection of spoken material and music in programmes included in the service.

On Question, amendment agreed to.

[Amendments Nos. 206 and 207 not moved.]

Clause 350 [Meaning of "control"]:

Lord Davies of Oldham

moved Amendment No. 207A:

Page 306, line 37, leave out subsections (2) and (3).

The noble Lord said: My Lords, in moving Amendment No. 207A I refer also to the other amendments in this group. We had a substantive debate on these issues in Committee. I beg to move.

Lord Gordon of Strathblane

My Lords, having moved an amendment in Committee, I very much welcome the fact that the Government have withdrawn these two subsections which were, for me at least, the ones which were causing a problem. Therefore, I am grateful to the Government.

Lord Eatwell

My Lords, I repeat the declaration of interest I gave earlier. Noble Lords have no idea what pleasure it gives me to say how pleased I am to support this government amendment. I am grateful that the Government have removed the burdensome subsections which previously existed in Clause 350.

Perhaps I may raise one issue with the Minister. All the weight now falls on subsection (4), which states that Ofcom is required to, publish guidance setting out their intentions concerning the inclusion of particular matters in the matters that they will take into account when determining whether a person has control of a body". Given that we do not know what Ofcom may settle on as matters that it will take into account, can the Minister confirm that it is the Government's intention that the onerous conditions previously contained in subsections (2) and (3), which the Government rightly want to delete, could not be reinstated by Ofcom in the form of its guidance in future?

Lord Davies of Oldham

My Lords, Ofcom will have due regard to our deliberations at various stages during the passage of the Bill. It is also the case that it will recognise that statements and concessions made in the Chamber are there to govern the nature of the code which they must develop. Earlier today I desperately sought, unsuccessfully, to avoid an amendment to the Bill on the very grounds that Ofcom would have regard to the nature of the code which it would draw up, and that also applies in this case.

I am grateful for the support of my noble friends and for the re-establishment of old relationships in the passage of the Bill.

The Deputy Speaker (The Countess of Mar)

My Lords, I must apologise to the House. I should have informed the House that if Amendment No. 207A is agreed to, I cannot call Amendments Nos. 208 and 209.

On Question, amendment agreed to.

[Amendments Nos. 208 and 209 not moved.]

7.45 p.m.

Clause 351 [Annual factual and statistical report]:

Lord McIntosh of Haringey

moved Amendment No. 209A:

Page 307, line 37, at end insert— ( ) the extent to which any guidance given by OFCOM under section 307 has been followed during that period;

On Question, amendment agreed to.

Clause 352 [Grants to access radio providers]:

Viscount Falkland

moved Amendment No. 210:

Leave out Clause 352 and insert the following new Clause—

"GRANTS TO COMMUNITY MEDIA

(1) OFCOM shall make such payments as they consider appropriate to a fund established under this section, to be known as the Community Media Fund.

(2) The Fund shall be under the management of a body established for the purposes of this section, which shall be called the Community Media Foundation.

(3) The Community Media Foundation shall consist of—

1. (a) a chairman appointed by OFCOM, and
2. (b) such number of other members appointed by OFCOM, not being less than four nor more than eight, as they may from time to time determine.

(4) The Fund may be applied by the Foundation in the making of grants for—

1. (a) the establishment and development of community media,
2. (b) the making of programmes to be carried by community media,
3. (c) the training of persons connected with community media,
4. (d) the provision of support services to community media,
5. (e) other related purposes.

(5) When making any grant out of the Fund in pursuance of subsection (4) the Foundation may impose such conditions as they think fit, including conditions requiring the grant to be repaid in certain circumstances.

(6) The Foundation shall perform their functions under this section with respect to the making of grants out of the Fund in such manner as they consider will secure a range and diversity of community media throughout the United Kingdom, taking account of the greater needs of areas and localities which are economically disadvantaged.

(7) OFCOM shall so exercise their power under subsection (3) to appoint the members of the Foundation as to secure that a majority of the members are persons who appear to them to represent a broad range of knowledge and experience of community media.

(8) In this section— community media" means communications services provided primarily for the benefit of members of the public in a defined geographical locality or in a particular community and not operated by the BBC or for commercial purposes.

(9) In subsection (8)— communications services" includes—

1. (a) radio and television broadcasting;
2. (b) electronic communications networks and services; and
3. (c) content services carried by services falling within paragraphs (a) or (b)."

The noble Viscount said: My Lords, Amendment No. 210 deals with community media services and the funding thereof and sets out a new clause to put the community media fund into the Bill as a primary legislative provision. That would give the fund a similar status to that of the Gaelic media service.

As noble Lords will realise, an important principle of any funding of community media should be at arm's length from Government and from the regulator in order to maintain editorial independence. That is necessary to avoid any funding mechanism becoming an additional tool of regulatory intervention. The arrangements in the amendment are the same as for the Gaelic media service. It proposes five purposes to which the fund should or could be applied:

1. "(a) the establishment and development of community media,
2. (b) the making of programmes to be carried by community media,
3. (c) the training of persons connected with community media,
4. (d) the provision of support services to community media,
5. (e) for other related purposes.

There is considerable experience now in various countries of funds of this kind, which play a vital role in sustaining and developing community media services without being the sole source of finance. Community media in those cases benefit from funding from a variety of sources which include local business, groups of listeners and public sources. These approaches have been shown to be successful in many of the regulatory environments in the world, which include Canada, the United States, Australia and so forth.

The advice that we are given is that the fund would contribute to up to 40 per cent of the cost, depending upon the need and size of the operation. The fund will be available for development costs, which include capital costs, and perhaps operating costs at a later stage as we see the emergence of various media services. When they begin to settle down one will see a shift from development costs to operating costs.

One of the challenges of a cross-media community fund is to strike the right balance of support between the different kinds of media service. Conventional wisdom at present is that television costs for community purposes are about three or four times higher than for radio. However, this whole area of communication involving electronics moves very quickly, as many noble Lords who may have invested in such areas will know, either to their benefit or their cost.

Evidence is now before us that developments recently in community television have brought the costs down to a level comparable to that of community radio. Indeed, I received a letter from a director of a community radio organisation who stated that 2.4 GHz technology is being used in universities and various small communities because the range is limited in that particular part of the spectrum. They have provided work experience for many people, in particular graduates, who as a result have moved on to employment in the broader industry. They have devised the means to communicate effectively in television as cheaply as radio.

This is an important amendment which deals not just with the situation as it exists now but takes account of the changes which are taking place and are likely to take place. I beg to move.

Lord Evans of Temple Guiting

My Lords, the amendment would replace the existing clause concerning grants for access radio with a new clause that would establish a community media fund to be administered by a foundation appointed by Ofcom. The foundation would make grants to support community media projects, giving particular priority to economically disadvantaged areas.

We have already discussed similar amendments. We cannot support the extension of the access fund to all community media projects. We all know that running a television channel is much more expensive than running a radio station. If we fund radio, television and Internet with the same pot of money it is unlikely that we would be able to secure sufficient grants for each project. The result of spreading our resources so thinly could well be that we fail to gain any benefit from the scheme.

In addition, I hardly think that the sums of money likely to be available will justify the degree of bureaucracy that the amendment would entail. In order to maximise the proportion of the available funds that reach the stations and avoid frittering them away on excessive administration, it is better for Ofcom to administer any funds directly.

As we have made clear throughout our debate on the subject, the Government view the growth of local media operations as a positive and important development, but it is one that must be managed carefully. Let us try to secure sufficient funds to make a success of access radio before we consider what should be the next step. I hope that the noble Viscount, Lord Falkland, will withdraw his amendment.

Viscount Falkland

My Lords, I thank the Minister for his thorough reply and understand what he said. That will he disappointing to many who are working hard to develop community television, in particular. They will feel that the ability to fund those developments is not running apace with their technology. I understand the Minister's view, and will return to those who briefed us on the amendments, who will clearly have something to say. They will read carefully what the Minister said. I reserve the right to return to the matter at the next stage, if necessary. In the meantime, I beg leave to withdraw the amendment.

Amendment, by leave, withdrawn.

Schedule 15 [Amendments of Broadcasting Acts]:

Lord McIntosh of Haringey

moved Amendments Nos. 210A and 210B:

Page 437, line 12, leave out from "fees)," to end of line 16 and insert "the words from "and the amount" onwards shall be omitted."

Page 447, line 10, leave out from "fees)," to end of line 14 and insert "the words from "and the amount" onwards shall be omitted."

On Question, amendments agreed to.

[Amendments Nos. 211 and 212 not moved.]

Lord McIntosh of Haringey

moved Amendment No. 212A:

Page 458, line 18, at end insert— ( ) In paragraph 1(6) of Part 1 (meaning of "more than a 20 per cent. interest"), for "20 per cent.", wherever occurring, there shall be substituted "5 per cent.".

On Question, amendment agreed to.

[Amendment No. 213 not moved.]

Lord McIntosh of Haringey

moved Amendments Nos. 213ZA, 213A and 213B:

Page 461, line 12, leave out from "fees)," to end of line 16 and insert "the words from "and the amount" onwards shall be omitted."

Page 463, line 36, at end insert— ( ) for "a multiplex licence", in each place, there shall be substituted "a television multiplex service or a general multiplex service"; ( ) for "the multiplex service to which the licence relates", in each place, there shall be substituted "that multiplex service";

Page 464, line 40, at end insert "; and

1. (b) for "a multiplex licence" there shall be substituted "a television multiplex service or a general multiplex service"."

On Question, amendments agreed to.

[Amendments Nos. 214 to 216 not moved.]

Lord McIntosh of Haringey

moved Amendments No. 216ZA, 216A, 216B, 216C and 216D:

Page 471, line 6, leave out sub-paragraph (4) and insert— ( ) In subsection (2), sub-paragraph (ii) of paragraph (b) and the word "or" immediately preceding it shall he omitted. ( ) In subsection (3) (fixing of fees), the words from "and the amount" onwards shall be omitted.

Page 474, line 28, leave out paragraph 116 and insert— 116 (1) Section 56 of the 1996 Act (multiplex revenue) shall be amended as follows.

(2) In subsection (1)—

1. (a) for "section 55(1)" there shall be substituted "this Part";
2. (b) for "the holder of a national radio multiplex licence" there shall be substituted "the person who is the multiplex provider in relation to a national radio multiplex service";
3. (c) in paragraph (a)(i), "to which the licence relates" shall be omitted;
4. (d) in paragraphs (c) and (d), for "the holder of the radio multiplex licence" there shall be substituted "the multiplex provider".

(3) In subsections (2) to (8)—

1. (a) for "the holder of the radio multiplex licence", "the licence holder" and "the holder of the multiplex licence", wherever occurring, there shall be substituted, in each case, "the multiplex provider"; and
2. (b) for "the Authority", wherever occurring, there shall be substituted "OFCOM".

(4) In subsection (9)—

1. (a) for "a national radio multiplex licence", in each place, there shall be substituted "a national radio multiplex service";
2. (b) for "the radio multiplex service to which the licence relates", in each place, there shall be substituted "that radio multiplex service";
3. (c) after the definition of "additional services provider" there shall be inserted—

"'multiplex provider'—

1. (a) in relation to a national radio multiplex service for which a person holds a licence under this Part, means the licence holder; and
2. (b) in relation to a national radio multiplex service which is not licensed under this Part, means the person who provides that service.""

Page 474, line 32, leave out paragraph 117 and insert— 117 (1) Section 57 of the 1996 Act (attribution of radio multiplex revenue) shall be amended as follows.

(2) In subsection (1)—

1. (a) for "the holder of a national radio multiplex licence" there shall be substituted "the person who is the multiplex provider in relation to a national radio multiplex service"; and
2. (b) for "the holder of the national radio multiplex licence" there shall be substituted "the multiplex provider".

(3) In subsection (2), for "the holder of the radio multiplex licence", wherever occurring, there shall be substituted "the multiplex provider".

(4) In subsection (3)—

1. (a) for "the Authority" there shall be substituted "OFCOM"; and
2. (b) for "the holder of the national radio multiplex licence" there shall be substituted "the multiplex provider".

(5) In subsection (4)—

1. (a) after "'additional services provider'" there shall be inserted ", 'multiplex provider"'; and
965
2. (b) for "a national radio multiplex licence" there shall be substituted "a national radio multiplex service"."

Page 476, line 7, at end insert— ( ) In subsection (4), for the words from "national radio multiplex service" onwards there shall be substituted "relevant multiplex service, means the last accounting period of the multiplex provider". ( ) In subsection (5)—

1. (a) for "national radio multiplex service" there shall be substituted "relevant multiplex service";
2. (b) for "holder of the national radio multiplex licence" there shall be substituted "multiplex provider"; and
3. (c) for "the radio multiplex service" and "that radio multiplex service" there shall be substituted "that relevant multiplex service".

( ) After subsection (5A) (inserted by Schedule 13) there shall be inserted— (5B) For the purposes of this section, a service is a relevant multiplex service if it is—

1. (a) a national radio multiplex service;
2. (b) a television multiplex service; or
3. (c) a general multiplex service.

(5C) In this section, "multiplex provider"—

1. (a) in relation to a national radio multiplex service, means the multiplex provider within the meaning of section 56; and
2. (b) in relation to a television multiplex service or a general multiplex service, means the multiplex provider within the meaning of section 14.""

Page 476, line 31, at end insert— ( ) In subsection (4), for "national radio multiplex service" there shall be substituted "relevant multiplex service". ( ) In subsection (5), for the words from "national radio multiplex service" onwards there shall be substituted "relevant multiplex service, means the last accounting period of the multiplex provider". ( ) In subsection (6)—

1. (a) for "national radio multiplex service" there shall be substituted "relevant multiplex service";
2. (b) for "holder of the national radio multiplex licence" there shall be substituted "multiplex provider"; and
3. (c) for "the radio multiplex service" and "that radio multiplex service" there shall be substituted "that relevant multiplex service".

( ) After subsection (6A) (inserted by Schedule 13) there shall be inserted— (6B) For the purposes of this section, a service is a relevant multiplex service if it is—

1. (a) a national radio multiplex service; or
2. (b) a general multiplex service.

(6C) In this section, "multiplex provider"—

1. (a) in relation to a national radio multiplex service, means the multiplex provider within the meaning of section 56; and
2. (b) in relation to a general multiplex service, means the multiplex provider within the meaning of section 14.""

On Question, amendments agreed to.

Clause 354 [Meaning of "available for reception by members of the public"]:

Baroness Buscombe

moved Amendment No. 217:

After Clause 354, insert the following new clause—

"REVIEW OF OFCOM'S DECISIONS UNDER PART 3

(1) It shall be the duty of OFCOM to establish a procedure for the review of its decisions made—

1. (a) under sections 211, 212, 213, 214, 216, 217, 218, 219, 229, 224, 225, 232, 233, 234, 235, 236, 247, 249, 250, 251, 322 and 325;
2. (b) pursuant to the procedures set out in section 318 for the handling of complaints about the observance of standards set out under section 312;
3. (c) under Part 5 of the Broadcasting Act 1996 (c. 55).

(2) Before establishing a procedure under subsection (1) OFCOM must publish, in such manner as they think fit, a draft of the proposed procedure.

(3) After publishing the draft procedure, and before establishing it as the review procedure for those decisions mentioned in subsection (1), OFCOM must consult every person who holds a relevant licence and such of the following as they think fit—

1. (a) persons appearing to OFCOM to represent the interests of those who watch television programmes;
2. (b) persons appearing to OFCOM to represent the interests of those who make use of teletext service; and
3. (c) persons appearing to OFCOM to represent the interests of those who listen to sound programmes.

(4) If it appears to OFCOM that a body exists which represents the interests of a number of the persons who hold relevant licences, they may perform their duty under subsection (3) of consulting such persons, so far as it relates to the persons whose interests are so represented, by consulting that body.

(5) Where OFCOM establishes a procedure under subsection (1) they must publish the procedure in such manner as they consider appropriate for bringing it to the attention of the persons who, in their opinion, are likely to be affected by the procedure.".

The noble Baroness said: My Lords, Amendment No. 217 would insert a new clause after Clause 354 requiring Ofcom to establish an internal review procedure for certain decisions that it makes under Part 3. As the Bill stands, no appeal or review mechanism exists in respect of Part 3 decisions, except where Ofcom exercises any of its Broadcasting Act 1996 powers for a competition purpose—in which case there may be an appeal to the Competition Appeals Tribunal. That is despite the fact that a statement was made in the communications White Paper promising, appropriate review procedures within the regulator", in respect of such decisions.

Broadcasters and consumers are therefore left with judicial review as their only route of appeal or review of Part 3 decisions. That is unsatisfactory, primarily because of the limited grounds on which decisions can be judicially reviewed. Unlike appeals to the Competition Appeal Tribunal under Part 2, which can revisit the merits of the decision, judicial review considers only the way in which decisions were made.

The Joint Committee on Human Rights expressed reservations in its fourth report of 2002–03 about possible breaches of Article 6 of the European Convention on Human Rights in the procedures set out for the making of Part 3 decisions. It stated that judicial review was unlikely to provide an effective remedy, because the subjective nature of Ofcom's judgment would make it difficult to assess the quality of the decision unless it was wholly irrational. Furthermore, judicial review proceedings are extremely expensive, and therefore inaccessible to many affected parties, even where judicial review might otherwise be appropriate.

In Committee, the noble Lord, Lord Davies of Oldham, confirmed the Government's view that the matter should be resolved in the High Court under judicial review and not by an independent appeals tribunal, drawing a distinction between Part 2 and Part 3 decisions. That was a disappointing response. Hence, we have tabled an amendment proposing a statutory commitment on Ofcom to consult on and establish an internal review procedure for dealing with appeals. A review of Ofcom's decisions by an internal Ofcom panel, as envisaged by the White Paper, would obviously also lack the necessary independence and impartiality to satisfy Article 6 requirements, but has the considerable advantage that it would be far cheaper and faster than proceedings in the High Court, and would therefore be a more accessible remedy for broadcasters and consumers alike.

The Government wrongly believe that the general statutory obligations on Ofcom as a regulator to act efficiently and transparently, coupled with the requirements of the European Convention on Human Rights, should be sufficient. Although accepting that Ofcom will need to move towards the establishment of an internal review process of sorts over time, the amendment is intended to ensure that there is a statutory, and therefore orderly and transparent, process for its introduction in the Bill. I beg to move.

Lord McIntosh of Haringey

My Lords, decisions under Part 5 of the Broadcasting Act 1996 relating to complaints about fairness and privacy require Ofcom to adjudicate on complaints. There is no statutory provision for review or appeal. For the review procedure in the amendment to operate, it would be necessary to make it clear where that fits in to the procedures set out in detail in the 1996 Act. Indeed, an appropriate mechanism would need to be devised in relation to each of the provisions listed in the amendment. Some of those already include procedures to ensure that broadcasters have a full opportunity to make representations.

Clause 236, for example, dealing with action against licence holders who incite crime or disorder, requires Ofcom to serve notice on the broadcaster of its intention to revoke the licence, detailing the reasons. A period of 21 days is then allowed before the licence can be revoked and the licence holder must be informed of his right to make representations. The notice of revocation then requires a further period of at least 28 days before it can take effect. That seems a very fair process. Introducing an element of internal review of the decision would need to be woven into that procedure and could not effectively be achieved using the blanket approach of the amendment.

Similarly, in relation to complaints about standards, we expect broadcasters to have in place appropriate arrangements for handling complaints, as required under Clause 318(1)(b). Although Ofcom has yet to establish its own procedures for handling complaints, as required under Clause 312(2), the opportunity of complaining to Ofcom or an Ofcom-appointed body if a viewer or listener is not satisfied with the broadcaster's response, or if the matter is serious, already offers a second tier of consideration. A further tier by way of internal review, as proposed in the amendment, is likely in most cases to be a waste of time and money—that is broadcasters' money.

I shall not examine each of the clauses referred to in the amendment, some of which do not in fact involve executive decisions by Ofcom at all. I do not deny that there may be cases where some form of internal review would be appropriate. That can be established without specific statutory provision—for example, by Ofcom adopting the procedure, in appropriate cases, of indicating that it is minded to reach a certain decision and providing for further representations, perhaps to a separate internal committee. I understand that such a procedure is already under consideration by Ofcom in relation to fairness and privacy complaints. We believe that treating the matter case by case is the best approach.

Very able people have been appointed to Ofcom. They have experience of regulation from both the industry and the regulator's perspective. They are perfectly able to recognise the need to be seen to be acting fairly and be willing, when appropriate, to reconsider matters before reaching a final decision. The need to ensure that Ofcom's decisions are legally robust—when rights are engaged under Article 6 of the ECHR, for example—is also an important consideration for them.

In short, these amendments would not achieve their aim and, fundamentally, the requirements for such a wide-ranging internal review of Ofcom's decisions could turn out to be a disproportionate and unnecessary exercise in many cases. This matter should not be included in primary legislation and I hope that the amendment will not be pressed.

8 p.m.

Baroness Buscombe

My Lords, I thank the Minister for his response. I found some of his comments comforting. I entirely accept what he said about the competence of Ofcom, and those who have been appointed to the board of Ofcom, to deal with important and serious issues. The Government have offered a helpful example: that they are already minded to set up some form of ad hoc committee to consider certain issues.

Perhaps a case-by-case approach is a good thing but, on the other hand, there is a real concern that unless a statutory safeguard is included in the Bill the concerns of some individuals may too easily be overridden. In that case, the only real resort at the end of the day would be to judicial review, which, as I said when I spoke to the amendment, would frankly be too expensive and too difficult. If I can be so bold, a lot of people would not have the confidence to seek a judicial review. It would deter most individuals from seeking recompense for what they believe to be a real grievance.

I want to consider carefully what the Minister has said today, and also to talk to those with whom we have been in discussion about the matter—including the CBI. I will reserve my thoughts about whether we should return to this matter on Third Reading, but for now, I beg leave to withdraw the amendment.

The Lord Bishop of Manchester

My Lords, before the noble Baroness, Lady Buscombe, sits down, perhaps I may be allowed to add to the CBI, which she mentioned. The Churches are also deeply concerned about this matter. I am very sorry that I was not here for the beginning of the debate. I was enjoying a Lancashire hotpot as befits the Bishop of Manchester.

Baroness Buscombe

My Lords, I am very grateful to the right reverend Prelate the Bishop of Manchester. Indeed, I was upstairs on the telephone to my children and almost missed the amendment altogether because time and the business are moving on.

Amendment, by leave, withdrawn.

Clause 355 [Interpretation of Part 3]:

Lord McIntosh of Haringey

moved Amendments Nos. 218 to 221:

Page 310, line 45, leave out "(except in the expression "digital additional sound service")"

Page 311, line 14, at end insert— "the BBC Charter and Agreement" means the following documents, or any one or more of them, so far as they are for the time being in force—

1. (a) a Royal Charter for the continuance of the BBC;
2. (b) supplemental Charters obtained by the BBC under such a Royal Charter;
3. (c) an agreement between the BBC and the Secretary of State entered into (whether before or after the passing of this Act) for purposes that include the regulation of activities carried on by the BBC."

Page 314, line 13, leave out "or"

Page 314, line 14, at end insert— (g) a digital additional television service or a digital additional sound service,

On Question, amendments agreed to.

Lord McNally

moved Amendment No. 222:

After Clause 365, insert the following new clause—

"DUTY TO ESTABLISH AND MAINTAIN COMPETITION PANEL

(1) It shall be the duty of OFCOM, in accordance with the following provisions of this section, to exercise their powers under paragraph 14 of the Schedule to the Office of Communications Act 2002 (c. 11) (committees of OFCOM) to establish and maintain a committee to be known as "the Competition Panel".

(2) The Competition Panel shall have such functions as OFCOM, in exercise of their powers under the Schedule to the Office of Communications Act 2002, may confer on the Panel.

(3) The functions conferred on the Panel must include, to such extent and subject to such restrictions and approvals as OFCOM may determine—

1. (a) to advise OFCOM on the exercise of its functions under section 364,
2. (b) to give an opinion to OFCOM on guidelines and decisions which OFCOM propose to adopt in the exercise of OFCOM's functions under section 364, including as to whether OFCOM or the Office of Fair Trading should investigate.

(4) The Competition Panel shall as soon as practicable after the end of each calendar year make to the chairman of OFCOM a report on its activities during that year which shall be published by OFCOM.

(5) The Competition Panel shall consist of—

1. (a) a chairman appointed by OFCOM; and
2. (b) such number of other members appointed by OFCOM as OFCOM think fit.

(6) The chairman of the Competition Panel must be a non-executive member of OFCOM but is not to be the chairman of OFCOM.

(7) In appointing a person for the purposes of subsection (2)(b), OFCOM must have regard to their expertise in the area of competition law or economics (or both).

(8) The Competition Panel must include at least one member who is a member of the Board of the Office of Fair Trading.

(9) Before appointing a person to be the chairman or another member of the Competition Panel, OFCOM must satisfy themselves that he will not have any financial or other interest which would be likely prejudicially to affect the carrying out by him of any of his functions as chairman or member of the Competition Panel.

(10) A person is not to be taken to have such an interest by reason only that he is or will be a member or employee of OFCOM.

(11) Every person whom OFCOM propose to appoint to be the chairman or another member of the Competition Panel, shall, whenever requested to do so by OFCOM, furnish OFCOM with any information they consider necessary for the performance of their duty under subsection (9)."

The noble Lord said: My Lords, my noble friend Lord Razzall was approached by Freeserve, which is the UK's largest Internet service provider with close to 2.7 million customers. It is a wholly-owned subsidiary of Wanadoo, the Internet services division of France Telecom.

It felt hard done by by Oftel, which it believed had not been particularly robust in applying competition law in the telecoms and related industries. Therefore, Freeserve lobbied my noble friend who, rather than staying to put the amendment to the Minister, has gone off to a delicious dinner.

This is a probing amendment. It would not add another bauble to the Ofcom tree or any more expense to Ofcom's operation. However, there is a serious point here: that large and important company felt that Oftel had failed to apply its powers under the Competition Act and therefore argued strongly that Ofcom should be much more on the ball in such matters. One of the reasons why it felt that Oftel had been slack was that it had failed to generate sufficient knowledge and expertise among its own staff. Freeserve therefore put forward the idea of a competition panel for Ofcom, furnishing it with both the internal expertise and the external advice it needed to act in those areas in a way that it felt that its previous regulator, Oftel, had failed to do. I beg to move.

Baroness Buscombe

My Lords, there is a real risk that, without due care and attention, the interests of the business community, without whom we would not have televisions, mobile phones or radios, will be overlooked by Ofcom, which will have to juggle and prioritise a large number of voices competing to have their case heard. Many of those voices have institutionalised representation in Ofcom, on the consumer panel or content board, but the same cannot be said of business.

However, I am not convinced that creating a whole new tier of bureaucracy is the answer. Will the Minister assure us that that will not be necessary? What guarantees are there that, when push comes to shove and Ofcom must make a decision that will have an impact on business competitiveness, it will not be swayed by the overwhelming presence of non-business points of view within its own walls? What hope can we give to the business community that Ofcom will do what it can to promote competition for its own sake, and not just when the consumer panel deems it necessary?

We on these Benches have tabled a number of amendments in Committee and on Report that would ensure that business—the providers of our services—will not be overlooked. Measures can be taken to reach a compromise that will be just as effective in ensuring that the voice of business is heard, without having to go to the length of building a new arm of Ofcom.

Lord McIntosh of Haringey

My Lords, I have no wish to intervene in any dispute between Oftel and Freeserve, still less one between Oftel and Wannado.

I start by reminding the House that the Joint Committee chaired by the noble Lord, Lord Puttnam, considered in great detail the need for Ofcom to have additional panels or boards to deal with the various issues that have been raised. The committee concluded that there was no rationale for an economic or competition board with executive functions. It also concluded, in the context of the question of an economic advisory panel, that it did not favour a further fettering of Ofcom's internal structures by placing a requirement for such an advisory body in the Bill. We accepted that advice wholeheartedly. It is just as relevant to the question of whether the Bill should require Ofcom to have a competition panel of the kind specified in the amendment or at all.

The aim of the amendment appears to be to ensure that Ofcom gives due priority to competition in its decisions. The noble Baroness, Lady Buscombe, confirmed that that was an important consideration, as it is for us. It aims also to ensure that Ofcom obtains appropriate specialised economic and legal advice on competition matters and that it liaises closely with the OFT over the exercise of concurrent powers under the Competition Act 1998. We agree with all of that; that is what will happen.

Arrangements that we have laid down in the Bill and which Ofcom is already making in its preparatory activities provide fully for that, without adding unnecessary complication to the structure and operation of Ofcom by requiring the creation of additional formal components, as proposed in the amendment. In any case, the main board consists of people such as the noble Lord, Lord Currie, who is an economist, and David Edmonds, the Director General of Telecommunications. For such people, competition issues have been meat and drink for much of their working life. They have a proper, independent and well informed perspective on the issues, as does the executive team that has been appointed.

There is no shortage of external specialist advice. Existing regulators such as Ofcom can and do obtain specialist advice from academic and other authorities, and they carry out research. There is no need for what is proposed in the amendment.

I hope that, with the admirable aim—recognised by the noble Lord—of not adding more baubles to the Christmas tree, the noble Lord, Lord McNally, will not press the amendment.

Lord McNally

My Lords, I beg leave to withdraw the amendment.

Amendment, by leave, withdrawn.

Clause 369 [Adaptation of role of OFT in initial investigations and reports]:

Lord Wakeham

moved Amendment No. 222A: Page 324, line 33, leave out ", Sunday or local (other than daily or Sunday)" and insert "or Sunday

The noble Lord said: My Lords, when I raised the question of whether the arrangements under the Bill amounted to deregulation of the bureaucracy imposed on newspapers, the Minister gave me a courteous answer, and I said that I would consider his response. Since that, he has also written me a long and detailed letter, for which I am grateful. The facts are now common ground. The Newspaper Society and I agreed with the facts that the Minister set out, but we do not accept that the totality of the changes produce a deregulatory result for smaller newspapers. I shall explain why.

The Minister pointed out that, to an extent, the new regime removes the need for prior consent, criminal penalties and automatic referral to the Competition Commission. However, that is not a substantial deregulatory outcome. The new regime extends the special newspaper controls and the complex regulatory process to the smaller newspaper transactions that were not caught by the special Fair Trading Act controls. Because of the new criterion, practically any deal made by a regional or local newspaper publisher will be subject to special newspaper plurality scrutiny, not just those that would have controls triggered by a 500,000 circulation threshold. That is not deregulation; it is an extension of government control. The regional newspaper industry and the Newspaper Society are simply asking that weekly local newspapers be removed from the Bill's special extended public interest test, which examines plurality issues only.

Contrary to the Minister's suggestion in his courteous letter to me, it is hard to see that past cases point to a continuing need for Ministers to be able to take action against local weekly newspapers to protect freedom of expression, accurate presentation of news, and plurality of views. The Government's consultation paper stated: In no case has the Competition Commission found that the acquisition of purely local newspapers would be against the public interest on freedom of expression grounds".

In only four cases since 1989 have freedom of expression concerns been raised in conjunction with competition grounds. In those cases, daily newspapers, not weekly newspapers, were the real objects of concern. In any event, the Government do not want to just keep their powers of control; they want to extend them.

The Minister's letter refers to the Joint Committee on the draft Communications Bill. Unfortunately, the letter omits the last five words. It was after hearing evidence from the Newspaper Society that the Committee stated: We agree that the issue of newspaper ownership is sufficiently important".

I shall not read it all, because it is in the letter. However, the bit that the Minister missed out about deregulation outcome was, especially as regards local newspapers".

Hence, the newspaper industry and I are seeking for this amendment to achieve a deregulatory outcome for local weekly newspapers that would otherwise be liable to greater intervention. This amendment would remove local weekly newspapers from the extended public interest jurisdiction. The regulatory authorities would still be able to examine other regional and local newspaper transactions on both competition and plurality grounds.

Will the Minister look again at this relatively small point about the smallest of our newspapers? If he were able to accept it now or later, it would save the Government or Ofcom money in having to investigate these tiny newspapers. It would save the newspapers a considerable amount of expense, which is not required on all perfectly reasonable competition grounds that the Government seek to insist upon. I beg to move.

8.15 p.m.

Baroness Buscombe

My Lords, I strongly support Amendment No. 222A moved by my noble friend Lord Wakeham. By excluding smaller newspapers from the definition in Clause 369 they would, as my noble friend said, be freed from what could otherwise threaten to become a considerable regulatory burden. It would be unnecessary and may add considerable cost to the local press to be subject to an OFT report. We welcome an amendment that would avoid this situation.

Lord Davies of Oldham

My Lords, we had a most interesting debate at a previous stage when the noble Lord, Lord Wakeham, pressed his amendments in his most articulate fashion. Of course, he has done so again today with regard to this amendment. I am obviously disappointed that my attempt to reply significantly to the issues which he raised in Committee in the form of a letter has not totally reassured him about the Government's case. He has expressed an anxiety that has been current throughout the Bill in its discussions in both this House and another place. It is alleged that the proposed regime places too heavy a burden on such titles, that the proposals extend scrutiny to the smallest of acquisitions that would have escaped scrutiny under the current special newspaper merger regime and that there have never been adverse public interest findings relating to local weekly titles alone.

I do not propose going through all those arguments again as the hour is a little late. We gave some of them a fair airing in our previous discussion. The definition of "newspaper" used in the Bill is the same as that used under the current Fair Trading Act regime. It applies to all daily and Sunday titles (whether national or local) and to local periodical newspapers, most of which are weekly. There is therefore no extension of the regime to titles not previously subject to scrutiny, although I hear what the noble Lord, Lord Wakeham was emphasising—that is, the paucity of cases in which small weekly titles have been involved in these issues.

Far from increasing burdens on the industry, in the letter which I sent to the noble Lord, to which he generously referred, I attempted to indicate that we thought that we had established some significant steps in deregulation with regard to the newspaper industry. In particular, the requirement to seek prior written consent of the Secretary of State, on pain of criminal sanctions, for all transfers of newspapers or newspaper assets where the jurisdictional criteria are met—no matter how small the title involved—will be removed. Instead, intervention by the Secretary of State will be discretionary and targeted at those cases raising genuine concerns about the effect of the merger on accurate presentation of news, free expression of opinion or plurality of views in newspapers.

The smallest acquisitions will not be subject to scrutiny on public interest grounds as they will not involve the acquisition of a newspaper enterprise with a turnover in excess of £70 million or involve a newspaper with at least a 25 per cent share of supply in at least a substantial part of the UK.

The nub of the discussion between myself and the noble Lord, Lord Wakeham, is why the regime should include local weekly newspapers at all. I trust that noble Lords do not need to be reminded of the important role played by local newspapers in the communities in which they circulate. Certainly they would not have to have recourse very far afield to be all too well aware of the regard in which local newspapers are held by Members of another place.

It is important that a mechanism is in place to protect the public interest of such communities in the accuracy of news reporting, the free expression of opinion and the plurality of views, where necessary. It is also important for such protection to extend to local weekly titles and not only to daily or Sunday titles, as proposed in the amendment.

Although I am not unsympathetic to the concerns expressed by the noble Lord as regards the desirability of deregulation—indeed, our proposals as set out in the Bill are designed broadly to deliver a deregulatory outcome—discretionary intervention in cases where genuine concerns have been raised represents the best balance between protecting the public interest and ensuring that regulation is not excessive. We believe strongly that such a public interest in the accurate presentation of news, free expression of opinion and plurality of views in newspapers exists in relation to national and local newspapers. The simple fact is that the vast majority of local titles are weekly. To exclude such titles from the protections offered by the proposals would amount to a grave disservice to local communities.

Given that my letter to the noble Lord did not give him the full reassurances that I had hoped to convey, I shall look at it again and, if necessary, write to him further on these matters. In the light of his remarks today, if there are matters that could be cleared up, I shall deal with them. However, I hope that I have been able sufficiently to reassure him that we are seeking to strike a balance between a broadly deregulatory measure and one that offers guarantees for the service that our local weeklies provide. On that basis, I hope that the noble Lord will feel able to withdraw his amendment.

Lord Wakeham

My Lords, I do not know whether the noble Lord is more charming when he is wrong than when he is right, but he has certainly given me a very courteous answer. However, before he writes to me again, let me write to him with a detailed commentary on his long letter so that he can see the small but quite important part for our local newspapers. In the meantime, I beg leave to withdraw the amendment.

Amendment, by leave, withdrawn.

[Amendments Nos. 222B and 222C not moved.]

Clause 385 [Penalties imposed by OFCOM]

Lord McIntosh of Haringey

moved Amendments Nos. 223 and 224: Page 334, line 22, at end insert— ( ) References in this section to penalties imposed by OFCOM under provisions contained in this Act include references to penalties which the BBC is liable to pay to OFCOM by virtue of section 195(3).". Page 341, line 23, at end insert— ( ) References in this section to penalties imposed by OFCOM under Part 3 of this Act include references to penalties which the BBC is liable to pay to OFCOM by virtue of section 195(3).

On Question, amendments agreed to.

[Amendment No. 224A not moved.]

Clause 396 [Regulations and orders made by OFCOM]:

Lord Evans of Temple Guiting

moved Amendment No. 225: Page 344, line 20, leave out "a time before" and insert "no earlier than

The noble Lord said: My Lords, this amendment has been tabled to correct an error in Clause 396. The clause sets out the procedure for Ofcom to make orders and regulations under provisions in this Bill and provisions inserted by the Bill into other Acts.

The intention of subsection (6) of this clause was always to provide for a period of at least one month for representations to be made on any proposal by Ofcom to make an order or regulation. This is to ensure that Ofcom provides an appropriate period for consultation on its proposals.

The effect of the current wording of subsection (6), however, is that the consultation period within which representations could be made must be less than one month. The adjustment we have proposed will correct this error and require a period of not less than one month, as we had intended. I beg to move.

On Question, amendment agreed to.

Schedule 17 [Minor and Consequential Amendments]:

[Amendments Nos. 226 and 226A not moved.]

Lord McIntosh of Haringey

moved Amendment No. 226B: Page 526, line 39, leave out "cover" and insert "enable OFCOM to meet

On Question, amendment agreed to.

Schedule 18 [Transitional Provisions]:

Lord McIntosh of Haringey

moved Amendments Nos. 227 to 231: Page 530, line 7, at end insert— "Savings for agreements referring to the termination of a 1984 Act licence

2A (1) This paragraph applies where a term or condition of an agreement in force immediately before the abolition of licensing provides—

1. (a) for the agreement, or a provision of it, to cease to have effect,
2. (b) for the agreement to become capable of being terminated
3. (c) for a requirement to pay or repay an amount (whether liquidated or unliquidated) to arise under the agreement, or to arise earlier than it would otherwise have arisen,
4. (d) for a security to become enforceable, or
5. (e) for rights or obligations of a person under the agreement to be different or to be modified,

if a party to the agreement ceases to hold a licence under section 7 of the 1984 Act, or ceases to do so in a manner or in circumstances described in the agreement.

(2) Where a person ceases to hold a licence in consequence of the provisions of this Act removing the requirement to hold a licence under section 7 of the 1984 Act—

1. (a) the term or condition is not to apply; and
977
2. (b) the rights and obligations of the parties to the agreement are to be the same (subject to the following subparagraphs) as they would have been had the person in question continued to hold such a licence.

(3) In relation to times after the abolition of licensing, that term or condition is to have effect as if the reference in that term or condition—

1. (a) to a person's ceasing to hold a licence under section 7 of the 1984 Act, or
2. (b) to his ceasing to do so in a particular manner or particular circumstances,

were a reference to his becoming subject to a direction under this Act by virtue of which he is prohibited from providing the whole or a part of an electronic communications network or electronic communications service.

(4) In sub-paragraph (3) the reference to a person's becoming subject to a direction by virtue of which he is prohibited from providing the whole or a part of an electronic communications network—

1. (a) does not include a reference to his becoming subject to a direction imposing a prohibition for a fixed period of less than eighteen months or to a direction that will have to be revoked if not confirmed; but
2. (b) except in the case of a direction imposing a prohibition for such a fixed period, does include a reference to the confirmation of a direction that would otherwise have had to be revoked.

(5) This paragraph does not apply in the case of a term or condition of an agreement if, on an application to the court by one or both of the parties to the agreement, the court directs—

1. (a) that this paragraph is not to apply; or
2. (b) that it is to apply with such modifications, or subject to the payment of such compensation, as the court may specify in the direction.

(6) In determining whether to give a direction under subparagraph (5) or what modifications or compensation to specify in such a direction the court must have regard to the following—

1. (a) whether either or both of the parties to the agreement contemplated the abolition of the licensing requirements of the 1984 Act when they entered into the agreement; and
2. (b) the extent (if any) to which the provisions of this paragraph represent what it would have been reasonable for the parties to have agreed had they both known at that time what provision was to be made by this Act and when it was to come into force.

(7) For the purposes of this paragraph—

1. (a) references to ceasing to hold a licence include references to its expiring or being revoked; and
2. (b) references to a licence under section 7 of the 1984 Act include references to a licence under that section of a particular description.

(8) In this paragraph "the court" means the High Court or the Court of Session.

(9) This paragraph has effect subject to paragraph 12.

Saving for agreements with special provision for 1984 Act licence holders

2B (1) This paragraph applies in a case to which paragraph 2A does not apply and in which a term or condition of an agreement in force immediately before the abolition of licensing provides for rights or obligations of a person under the agreement to be different or to be modified according to whether or not he—

1. (a) is or has become the holder of a licence under section 7 of the 1984 Act; or
2. (b) is or has become the holder of such a licence in a manner or in circumstances described in the agreement.

(2) In relation to times after the abolition of licensing, that term or condition is to have effect as if the rights and obligations to which that person is entitled or subject under the agreement were, except in a case falling within sub-paragraph (3), those for which the agreement provides in the case of a person who—

1. (a) is or has become the holder of such a licence; or
2. (b) is or has become the holder of such a licence in that manner or in those circumstances.

(3) The excepted case is where that person is subject to a direction under this Act by virtue of which he is prohibited from providing the whole or a part of an electronic communications network or electronic communications service.

(4) In sub-paragraph (3) the reference to a person's being subject to a direction by virtue of which he is prohibited from providing the whole or a part of an electronic communications network—

1. (a) does not include a reference to his being subject to a direction imposing a prohibition for a fixed period of less than eighteen months or to a direction that will have to be revoked if not confirmed; but
2. (b) except in the case of a direction imposing a prohibition for such a fixed period, does include a reference to his being subject to a direction which would have had to be revoked if not confirmed but which has been confirmed.

(5) This paragraph does not apply in the case of a term or condition of an agreement if, on an application to the court by one or both of the parties to the agreement, the court directs—

1. (a) that this paragraph is not to apply; or
2. (b) that it is to apply with such modifications, or subject to the payment of such compensation, as the court may specify in the direction.

(6) In determining whether to give a direction under subparagraph (5) or what modifications or compensation to specify in such a direction the court must have regard to the following—

1. (a) whether either or both of the parties to the agreement contemplated the abolition of the licensing requirements of the 1984 Act when they entered into the agreement; and
2. (b) the extent (if any) to which the provisions of this paragraph represent what it would have been reasonable for the parties to have agreed had they both known at that time what provision was to be made by this Act and when it was to come into force.

(7) For the purposes of this paragraph references to a licence under section 7 of the 1984 Act include references to a licence under that section of a particular description.

(8) In this paragraph "the court" means the High Court or the Court of Session."

Page 530, line 11, after "relevant" insert "Broadcasting Act"

Page 530, line 14, after "relevant" insert "Broadcasting Act"

Page 530, line 16, after "relevant" insert "Broadcasting Act"

Page 530, line 17, leave out paragraph (a).

On Question, amendments agreed to.

[Amendment No. 232 not moved.]

Lord McIntosh of Haringey

moved Amendment No. 232A:

Page 532, line 27, after first "provision")" insert—

1. "(a) regulates the provision of premium rate services; or
2. (b) falls within sub-paragraph (3A).

(3A) The continued provision falls within this sub-paragraph in so far as it"

The noble Lord said: My Lords, in moving Amendment No. 232A, I shall speak also to Amendments Nos. 232B, 232C and 232D.

The amendments deal with a potential problem arising from the possible impact of the European Community Technical Standards and Regulations Directive on provisions made under the Bill. The very wide ambit of the directive may require us to notify the provisions of the new premium rate services code to the European Commission and observe a standstill period of at least three months before the provisions can come into force. The purpose of the standstill period is to allow the Commission and other member states to consider whether the new provisions create any barriers to trade between member states.

The PRS provisions are different front most of the other provisions in Part 2 of the Bill in that they are not mandated by the four European Community communications directives which underlie most of the remainder of that part of the Bill. To avoid a three-month gap in the PRS regime, the amendments to Schedule 18 to the Bill permit Ofcom—or, in practice, Oftel—to issue continuation notices in respect of the provisions in the current licence conditions.

The amendments broaden the current powers in Schedule 18 to issue continuation notices so as to embrace the premium rate services arrangements of current licences. Such continuation notices would then be able to prolong the life of the existing regime for three months or so until the provisions of the new code can be commenced.

The amendments should have absolutely no effect on interested parties, they simply allow the prolongation of the existing regime until such time as the new arrangements can be fully commenced. They remind me of the city fathers of Limerick who determined to build a new gaol. They decided that the new gaol should be built of the stones of the old gaol and that the old gaol should stay in use until the new gaol was ready. I beg to move.

On Question, amendment agreed to.

Lord McIntosh of Haringey

moved Amendments Nos. 232B to 232D:

Page 532. line 29, leave out "they" and insert "OFCOM"

Page 533, line 28, after "provision" insert "falling within subparagraph (3A)"

Page 534, line 9, after first "apparatus"," insert —the provision of premium rate services","

On Question, amendments agreed to.

[Amendment No. 233 not moved.]

Lord McIntosh of Haringey

moved Amendments Nos. 234 and 235:

Page 539, line 34, leave out from "to" to "is" in line 35 and insert "his becoming subject to a direction by virtue of which he"

Page 539, line 38, at end insert—

"( ) In sub-paragraph (5) the reference to a person's becoming subject to a direction by virtue of which he is prohibited from providing the whole or a part of an electronic communications network or electronic communications service—

1. (a) does not include a reference to his becoming subject to a direction imposing a prohibition for a fixed period of less than eighteen months or to a direction that will have to be revoked if not confirmed; but
980
2. (b) except in the case of a direction imposing a prohibition for such a fixed period, does include a reference to the confirmation of a direction that would otherwise have had to be revoked."

On Question, amendments agreed to.

[Amendment No. 236 not moved.]

Lord Davies of Oldham

moved Amendment No. 237:

Page 556, line 41, at end insert— 58A References in paragraphs 57 and 58 to Chapter 2 of Part 5 do not include references to subsections (2) to (4) of section 382 (powers to make transitional and consequential amendments etc.).

The noble Lord said: My Lords, in moving Amendment No. 237, I shall speak also to Amendment No. 238. These are two minor technical amendments that are designed to clarify the effect of certain of the transitional provisions relating to newspaper mergers set out in Schedule 18 so that the legal effect of the provisions is in line with the policy intention underlying them, and to ensure consistency in the operation of ancillary provisions in the Enterprise Act 2002. I beg to move.

On Question, amendment agreed to.

Lord Davies of Oldham

moved Amendment No. 238:

Page 557, line 35, at end insert— (9) Section 395 of this Act shall not apply in relation to the power of the Secretary of State to make an order under section 91(6)(a) of the Enterprise Act 2002 (c. 40) as applied by virtue of sub-paragraph (7)(b) above but supplementary provisions of Part 3 of the Enterprise Act 2002 which relate to the making of an order under section 91(6)(a) of that Act shall apply in relation to the making of an order under that provision as applied by virtue of sub-paragraph (7)(b) above.

On Question, amendment agreed to.

Schedule 19 [Repeals]:

Lord McIntosh of Haringey

moved Amendments Nos. 238ZA to 238A:

Page 563, line 19, column 2, at end insert—

"In section 4(3), the words from "and the amount" onwards."

Page 564, line 28, column 2, leave out from "section" to end of line 29 and insert—

"87 (a) in sub-section (2)(b), subparagraph (ii) and the word "or" immediately preceding it; (b) in subsection (3), the words from "and the amount" onwards."

Page 566, line 4, column 2, leave out ""advertising agency", of"

Page 566, column 2, leave out lines 12 to 14.

On Question, amendments agreed to.

[Amendments Nos. 239 and 240 not moved.]

[Amendment No. 240.4 had been renumbered as Amendment No. 241C.]

Lord McNally

moved Amendment No. 241

Page 566, leave out line 32.

On Question, amendment agreed to.

Lord McIntosh of Haringey

moved Amendments Nos. 241A to 241C:

Page 568, line 17, column 2, at end insert

"In section 4(3), the words from "and the amount" onwards."

Page 568, line 40, column 2, at end insert—

		"In section 43— (a) in subsection (2)(b), subparagraph (ii) and the word "or" immediately preceding it;
		(b) in subsection (3), the words from "and the amount" onwards."

Page 568, line 45, column 2, at end insert—

"In section 56(1)(a)(i), the words "to which the licence relates"."

On Question, amendments agreed to.

Clause 403 [Short title, commencement and extent]:

Lord McIntosh of Haringey

moved Amendment No. 242:

Page 353, line 5, at end insert— ( ) An order under subsection (2) may include provision making such transitional or transitory provision, in addition to that made by Schedule 18, as the Secretary of State considers appropriate in connection with the bringing into force of any provisions of this Act; and the power to make transitional or transitory provision includes power to make—

1. (a) different provision for different cases (including different provision in respect of different areas);
2. (b) provision subject to such exemptions and exceptions as the Secretary of State thinks fit; and
3. (c) such incidental, supplemental and consequential provision as he thinks fit."

The noble Lord said: My Lords, this amendment would give the Secretary of State power to make transitional and transitory provision when bringing into force provisions of the Bill. We have done our best to make sure that the Bill itself makes all the provision that is needed to ensure that the transition from the existing law to the new regulatory regime is as soon as possible. But I hope that the House will recognise that in a Bill of this size and complexity, there is always a risk that some unforeseen or unforeseeable difficulty will come to light in the course of making the detailed preparations necessary for Ofcom to start its work in earnest.

I trust that noble Lords will agree that in the circumstances it would be prudent to include this modest power to make provisions supplementing that made in Schedule 18. It would be unfortunate for unnecessary problems and legal technicalities to arise because of unforeseen and unforeseeable transitional difficulties. I beg to move.

On Question, amendment agreed to.

[Amendment No. 243 not moved.]

House adjourned at twenty-eight minutes before nine o'clock.