HC Deb 08 May 1990 vol 172 cc32-3W
Miss Emma Nicholson

To ask the Secretary of State for the Home Department if he will make a statement about the ownership restrictions which are to be placed upon the transmission company which is to take over the Independent Broadcasting Authority's transmission functions.

Mr. Mellor

Our announcement of 4 July last year recognised that the private transmission company which takes over the IBA's transmission operation will have a powerful market position, and that economic as well as technical regulation would be necessary. This will be achieved through the licensing regime of the Telecommunications Act 1984. A working draft of a licence to be issued under the Act for this purpose was circulated during the Broadcasting Bill's Committee stage. The licence will enable regulation to be carried out by the Director General of Telecommunications in order to ensure that the transmission market operates fairly and that transmission standards are maintained.

We also consider that the transmission company should be subject from the outset to certain ownership restrictions in order to promote greater competition in broadcasting and telecommunications. It is intended that the total holdings of Channel 3 and Channel 5 licensees (or the ITV franchise holder before 1993) should not exceed 20 per cent., so as to guard against excessive vertical integration and to ensure that competition for these services is not restricted when the BBC's system enters the market. Because it already has a significant hold over the broadcasting communications market we also propose to limit any BT shareholding to no more than 20 per cent. The necessary provisions will be included in the new company's Telecommunications Act licence. In addition, whilst the BBC's transmission system remains in public hands, it will not be allowed any holding in the private transmission company.

Our long-term aim is to remove the ownership restrictions on BT and the Channel 3 and 5 franchisees when the market allows. We will therefore review the need for either of these restrictions when we consider that circumstances have changed in such a way as to call for the position to be reassessed. If the need for either restriction has not already been reviewed prior to the privatisation of the BBC's transmission system, it will be reviewed at that point.