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1
Regulating communications: British public policy responses to
convergence within the digital age
Mark Wheeler,
Politics and Modern History Department,
Calcutta House,
London Guildhall University,
Old Castle Street,
London,
E1. 7NT.
Tel: 0171-320-1065
Fax: 0171-320-1117
e-mail (work): [email protected]
e-mail (home): [email protected]
Word Count: 6,611
Paper to be presented at Workshop 24. Regulating Communications in the
`Multimedia Age’, European Consortium of Political Research, 27th
Joint Sessions of
Workshops, University of Mannheim, Germany, 26th
-31st March 1999.
2
Introduction
The British Labour government has stated that the Information Communication
Technologies (ICTs) will become the centrepiece for future production, services and
investment within the national and global economies. In particular, the government has
argued that new forms of electronic commerce (e-commerce) may promote
competitiveness, efficiency and growth. The former Secretary of State for Trade and
Industry, Peter Mandelson has commented:
" My vision for the UK is to create a knowledge-driven economy, in which knowledge is
exploited to the full in developing new products and services and in making existing
industries more efficient and productive. ... I want Britain to be Europe's digital
pathfinder - the natural home for new digital products and services. We must give UK
consumers early access to these and ensure that UK based companies are world leaders.
By the end of this Parliament, I want the UK to be recognised globally as the best
environment in which to trade electronically."1
The Department of Trade and Industry (DTI) believes that its role will be to hasten the
general adoption of successful forms of innovation, to develop team-based projects to
support business and to look for opportunities to pioneer regulation for the new digital
knowledge-driven economy. Yet, despite these bold proclamations, it remains unclear
how governments can establish and maintain the appropriate regulatory structures
through which to supervise the virtual economy. The legislation governing e-commerce is
subject to the complexities of the converging marketplace. The sector specific definitions,
which have existed between the audio-visual and e-commerce industries, are becoming
1 Peter Mandelson, Converging Technologies, DTI Future Unit, HMSO, September 1998,
p.3.
3
less appropriate. Previously, each sector has been defined as a segregated market,
protected by its own set of rules. However, with the expansion of the means of
distribution and dissemination, audio-visual markets will assume many of the
characteristics of the telecommunications markets.
Uncertainties have also become apparent when new kinds of services are established and
it may be difficult to classify them under existing categories. Thus, due to the scope and
character of the information technologies' services, the current regulatory categorisations
and demarcations are being perceived as becoming increasingly marginal and irrelevant.
For example, the speed and breadth of dissemination of the recent Starr Report through
the Internet demonstrated the limitations of the conventional regulation of information
flows and the difficulties of applying different sets of rules for different media.
This study will consider how British public policy initiatives have responded to the
complexities of regulating for the converging Information Communication Technologies
(ICTs) and the audio-visual industries. It will outline the changes which are effecting the
communications marketplace and discuss the implications for regulation. In particular, it
will pay attention to the Department of Culture, Media and Sport (DCMS) and DTIs’
jointly produced 1998 Green Paper Regulating Communications: Approaching
Convergence in the Information Age (CM4022). Further, as the author was a researcher
for the British Screen Advisory Council’s (BSAC) Convergence Working Party (which
was responsible for providing a response to the Green Paper), the study will discuss this
4
committee’s concerns with regard to the Paper’s proposal for the regulation of the
converging communications sectors.2
The Converging Communications Marketplace
The technological revolution is producing a significant reform of the provision of
information and communication within the public domain. Currently, digital computer
processing and network technologies are replacing the conventional methods through
which information has been produced, stored, transmitted and distributed. Therefore,
digital rather than analogue forms of transmission are beginning to extend mass
participation technologies, such as broadcasting, which distribute information from a
central source to millions. Further, interactive fibre-optic cable systems are developing
alongside widespread forms of personal computing and videoconferencing. A new
generation of networks can promote low-cost, broadband communication. Moreover, new
electronic services located around telecoms, computer and satellites have created a global
electronic mail service. In turn, these reforms massively enhance the amount of data that
can be stored, retrieved and disseminated within the public and private domain.
These developments provide access to greater numbers of communications links, permit
the distribution of commercial and entertainment material, and advance telephony along
the same highways. Digital technologies also allow for the easy combination of different
2 The British Screen Advisory Council (BSAC) is an independent advisory body to
government and policy-makers and to the audiovisual industry. Its membership includes
senior management and trade unionists from terrestrial and satellite television,
telecommunications companies and throughout the audiovisual sector.
5
types of information representation, such as text, audio, images and video, thereby
making the distinctions between different types of information production and
distribution less apparent.
A variety of different digital platforms will provide a variety of different services to
users. The common “front-end” for these converged services will be the Electronic
Programme Guide (EPG); this will take on the characteristics of a “browser” providing
various paths for accessing the content sought by the user. As the emerging information
and communications networks allow people to enjoy a virtually unlimited access to
information, education and entertainment resources, they are reforming the means
through which people communicate to one another.
The convergence of the formerly discreet information and communications systems
(telecommunications, broadcasting, computers) has led to new opportunities for
investment and innovation as the take up of information services within the business and
the domestic sphere has grown. Thus, the production, distribution and use of information
is becoming an increasingly important economic activity as information’s value as a
commodity, which can be exchanged between service providers and consumers, becomes
more and more conspicuous. As stated in the EC’s Green Paper on the Regulatory
Implications for the Convergence of Telecommunications, Media and Information
Technology sectors:
6
“ Current activity in the market suggests that operators from the sectors affected by
convergence are acting on the opportunities provided by technological advances to
enhance their traditional services and to branch out into new activities.
Telecommunications. Media and Information Technology sectors are seeking cross-
product and cross-platform development as well as cross-sector shareholding.”3
Within the next two to three years, the developments taking place in the converging
audio-visual market place, especially in the provision of broadcasting services, will be
profound. In the past, broadcasting has been defined as a segregated market, protected by
its own set of rules and regulations. However, with the onset of digitisation, the
expansion in the number and diversity of channels of distribution will mean that
broadcasting (and television in particular) will in many respects assume the
characteristics of the telecoms market.
So far, with few exceptions (such as Time-Warner-Turner or Pearson), the majority of
media players have been defined by their means of distribution and have tended to be
sector-specific. In the converging communications environment, such limited
diversification may no longer prove to be economically feasible as high-profile services,
notably the established free-to-air television channels, will decline in visibility and
become part of a general mix of information goods. Audio-visual services will
progressively come to be defined through a standard industrial model in which service
providers, with manufacturing and distribution bases, will supply commercial products to
consumers.
3 European Commission, Green Paper on the Convergence of the Telecommunications,
Media and Information Technology Sectors, and the Implications for regulation toward
an Information Society Approach, Com(97)623, 3 December 1997, p.1.
7
The Regulation of Convergence: Issues and debates
.
These imperatives raise several issues concerning the regulation of information and
communication services. Not least, there has been a belief expressed that through market
liberalization that new forms of consumer demand will be addressed and a more
individualistic approach to information will be necessitated. This is problematic due to
the concentrated nature ownership within the media and, increasingly, multi-media
marketplace. Corporate diversification has led to an increase in the supply of channels
and methods of dissemination. Simultaneously, it has produced fewer and fewer suppliers
of information.4 Further, concerns have arisen concerning the control of gateway access
to these services. This is especially important with regard to whether the service
providers will have control over areas of Conditional Access (CA) and how EPGs will be
organised. As Andrew Graham Comments:
“ There are two fundamentally different ways in which these EPGs will be important.
One concerns the technology, the other the economics of choice and competition. At the
technical level the EPG will be part and parcel of what is called the Conditional Access
System (or CAS). This is the software and hardware that will be in the set-top box (or
soon to be built into the TV). This box will carry out a variety of functions, but the
important point is that for the first time televisions will have the equivalent of an
operating system. … The second assumption, even more fundamental to the theory of
consumer choice, is that consumers know and understand both the full list of items that
are on sale and all the prices of these items. If consumers do not have this information
they cannot choose rationally and firms, even where there are large numbers of them, are
not really in competition with one another.”5
4 For a more detailed account of the failures of market-led economics within the digital
market, see Andrew Graham, `Broadcasting Policy and the Digital Revolution’, in Jean
Seaton (ed.), Politics and the Media: Harlots and Prerogatives at the Turn of the
Millenium, The Political Quarterly, Blackwell Publishers, 1998, pp.32-33. 5
Andrew Graham, Broadcasting Policy and the Digital Revolution, pp.33-34.
8
Therefore, a considerable degree of regulation will be concerned with developing
effective methods for allowing effective competition to emerge in the digital
environment. However, communication based services are as important for their political
as well as their economic value. Due to the dangers of concentrated supply and possible
gateway abuse, there are obvious dangers to the democratic flow of information. It is
therefore necessary for regulatory controls to be developed within the converging
communications market which will allow for the efficient and equitable provision and
consumption of such services.
Currently, within Britain, the converged sectors (telecommunications, information
technology and broadcasting) operate under different sets of regulatory policy. With the
blurring of boundaries between broadcasting, telecoms and computer industries,
questions have been raised about the sector-specific nature of British communications
regulation. In particular, it has been suggested that there should be a convergence of
regulatory approaches and bodies, with the possible creation of a single communications
regulator or Ofcom. For example, Richard Collins and Christina Murroni comment:
“ A regime based on sector-specific licensing of individual firms, detailed conditions of
licence and detailed monitoring of performance is tantamount to de-regulation, if the
industry has hundreds of licensees. The explosive growth in the number of firms
providing services following liberalization means that sector-specific licensing cannot be
retained. A second key feature of the UK regulatory regime, sector-specific regulation by
an alphabet soup of regulatory agencies, is incompetent to deal with the challenges of the
past – let alone the future. Instead, general principles for governing the media and
9
communcations sector should be defined by Parliament. Their detailed implementation
and enforcement should be delegated to a single regulatory agencies, Ofcom.”6
The Office of Fair Trading (OFT) provides a general level of regulation in order to ensure
fairness and competitiveness. The telecoms sector is characterised by a strongly pro-
competitive regime (Oftel) which has been designed to encourage new entrants and
competition across the full range of services. The UK IT sector has seen the abandonment
of interventionist policies which sought to create in ICL a national champion and, in the
absence of state involvement, has experienced strong growth in some areas (e.g. video-
games) and near-total decline in others (e.g. applications software).
The broadcasting sector, by contrast, has been shaped by protectionist and segregated
regulation. Due to the complexities and contradictions of the Thatcher and Major
governments’ late eighties and early nineties broadcasting policy (in which deregulation
was ironically the aim) a number of regulators, with specific remits and areas of
jurisdiction, exist. These include; the BBC Board of Governors, the Independent
Television Commission (ITC), the Broadcasting Standards Commission (BSC) (created
from the Broadcasting Complaints Commission and the Broadcasting Standards Council)
and the Radio Authority. Undoubtedly, some distinctive sectoral regulation, dealing with
specialised gateway and infrastructure matters across the converging communication
sector, is essential for the realisation of competition policy goals. In particular, sectoral
regulation provides for the development and application of specialist expertise in a
complex and fast moving field. This allows for greater regulatory certainty for both
6 Richard Collins and Christina Murroni, New Media, New Policies: Media and
Communication Strategies for the Future, Polity Press, 1996, p.183.
10
investors and consumers by establishing rules in advance and enabling easier market
entry for new actors, especially in those markets with powerful incumbents.
Sectoral regulation means that new entrants will not only be dependent on competition
policy, whose largely post-hoc natures means that redress may only occur after the
aspiring new entrant has foregone the opportunity to enter the market, or already gone out
of business. Moreover, in the view of Oftel, the UK telecommuncations regulator,
reliance on general competition law works best in highly developed markets. The
existence of dominant players in the early stages of a market’s development gives rise to
the need for a specialist regulator to ensure that behaviour and outcomes are pro-
competitive.
However, consistency across different sectors requires that the intellectual and policy
underpinning of all sector-specific regulation should be coherent. Broadcasting regulators
have been accused of unevenly applying and enforcing rules. The same or similar
services, offered by different service providers on different platforms, are subject to
different, sometimes contradictory regimes. For example, digital terrestrial television
operates under a licensing regime that is much more a function of the analogue world
than of today’s market conditions. This is likely to lead to market distortions at the
expense of both industry and consumers. Industry sceptics have maintained, due to the
inappropriate jurisdictional demarcations of the current set of broadcasting regulators,
that there has been an inconsistent application of rules and sanctions in converging
11
marketplace. For instance, BSkyB commented in its memorandum submitted to the
House of Commons Culture, Media and Sport Committee:
“ (We) would wish to see the overlapping jurisdictions of the sector-specific regulators
and general competition authorities addressed by any future regulatory review. The
current regulatory structure places unnecessary burdens on resources, both public and
private, and increases uncertainty, at a time when the company is facing one of its biggest
challenges to date---launching digital satellite broadcasting.” 7
Jurisdictional inconsistencies have led to the associated problems concerning `double' or
`triple' jeopardy in which regulators have reached conflicting conclusions or have applied
different sanctions with regard to the same issue. For commercial organisations, this is a
waste of time and resources and breeds confusion amongst the producers and consumers
alike. Further, the multiple structure of regulators has encouraged "forum shopping" by
competitors who seek to use regulation as a competitive weapon, to gain or maintain
specific privileges, or to slow down competition. These problems have been exacerbated
by the regulators’ refusal to become more transparent in performing their duties.
Moreover, with the exponential proliferation of channels and services, current regulatory
and licensing arrangements may become increasingly obsolete as media corporations
circumvent technical prescriptions and national regulations. As early as 1989, the UK’s
policies regarding direct broadcast by satellite (DBS), mandating a national, licensed
provider (BSB) offering a service with significant public service obligations and using D-
MAC technology, were invalidated by the launch of Sky, using the Astra
telecommunications satellite and the PAL standard, whose service was licensed by the
12
Luxembourg authorities. Rather than attempt to protect BSB by restricting Sky, the UK
government opted to allow the free play of market forces. Over the next decade, BSkyB
led the growth of multi-channel television in the UK including being the first provider in
the UK of digital television. These developments have been independent of regulatory
intervention. More recently, other existing national regulatory road checks, such as
content controls, have been bypassed as a result of distribution via the Internet (as the
dissemination of the Starr Report demonstrated).
Finally, the convergence of audio-visual, telecommunications and computing industries
brings into question the concepts of public service and universality. In the digital
environment, the conditions for social inclusion should be improved on. This aim could
be achieved by enhancing the services offered by public libraries to include access to
digital services.
To this end, the impact of new services and need for social inclusion may lead to the
strengthening of regulation in some areas. As audio-visual industries converge, critical
access issues (competition, consumer choice, consumer protection and a favourable
climate for investment) cannot be sacrificed. Further, the convergence of previously
discreet services means that new areas of regulation will make themselves present for
audio-visual regulatory bodies. For instance, conditional access and bundling rules
involve a level of intervention, including price controls and the imposition of accounting
standards, that has been a feature of telecoms regulation but is new to broadcasting. It
7 Memorandum submitted by BSkyB, Culture, Media and Sport Committee Fourth
Report, The Multi-Media Revolution (Volume II): Minutes of Evidence taken before the
13
will be necessary to ensure that the benefits of inter-operability which characterise
telecommunications extend to all the converged sectors, and that access rules for
broadcasting extend to data and interactive services on television.
Alternatively, content regulation, positive programming requirements and restriction
through licensing will prove progressively more difficult to enforce as the digital market
becomes established. Traditionally, British broadcasting regulators have striven to
preserve open access and programming standards, most especially with regard to control
over content. These precepts have been placed under greater pressure with the
introduction of new forms of technological distribution (cable, satellite, digital) which
have allowed subscription based services to flourish and have undermined controls over
content. As services can no longer be defined by their specific platforms or methods of
distribution, these trends will be exacerbated, and new or alternative conceptions for
public service and universality will be required. This is likely to lead to greater emphasis
being placed on the need for well-defined public services which, like the converged
services in general, will be delivered via many different networks in a variety of forms.
Once again, it is becoming increasingly difficult to relate the scope and character of
services to the categorisations and demarcations of current regulation. Regulation must be
responsive to emerging market conditions and cannot be determined by historical
arrangements. Regulation policy which relies on rigid structural demarcations between
markets – e.g. between broadcasting and telecoms markets or between public and private
communications – may become increasingly unsustainable. Moreover, sector-specific
Culture, Media and Sport Committee, HMSO, 6 May 1998, p.265.
14
regulation may ultimately have to give way to a clear industrial policy in which
competition will be maximized, access will be enhanced and a more appropriate vision of
public service will be articulated.
The 1998 Green Paper: Regulating Communications: Approaching Convergence in
the Information Age
In responding to these concerns, the 1998 Green Paper attempts to provide a compromise
between the traditions of public service and universality, the maintenance of sector-
specific regulators, the demands of consumer usage and the government’s desire to
enhance competition within the information and communication sectors. Its authorship by
the DCMS and DTI (with significant, but uncredited, contributions from the Cabinet
Office and the Better Regulation Unit in particular8) may also indicate that the document
was designed to appeal to a number of different constituencies and political interests both
from within government and the audio-visual industries.
The Green Paper argues that, despite the tremendous amount of activity which has
characterised recent developments within the converging sectors, the pace of change is
not uniform. Some practices have been rapidly transformed, whereas others remain
virtually unaffected. It stresses that the debate concerning the regulation of convergence
often polarises between two opposite positions. On one hand, some commentators have
8 This may also serve to explain some of the omissions within the Green Paper, notably
its failure to deal with the BBC and cross-media ownership. Uncorroborated reports
suggest that the government’s and senior personnel’s close alliances with the BBC and
News Corporation led to the removal of the chapters written by the DTI and DCMS
dealing with these issues.
15
argued that there should be a radical restructuring of the regulation in order for
competitiveness to flourish. On the other, it has been suggested that the status quo will
suffice as a mass market for the converged services had not yet grown to any significant
extent. 9
The government believes that this is a false division. Whilst technologies are converging,
this does not mean that the markets which employ them are becoming indistinguishable.
Presently, for the majority of consumers, the converged services remain some way off as
the mass markets for digital services do not exist and the different forms of technological
distribution still tend to be sector-specific. Further, consumer demand may well be
governed by how individuals and communities react to the new services and their
behaviour and expectations will not change overnight. At the moment, the government
believes that convergence brings greater opportunities to the providers of services in the
following ways:
By encouraging economies of scope and scale across different areas of the business
(e.g. production and distribution)
By extending services from one medium to another as their technical capabilities
become increasingly interchangeable
By allowing companies to undertake alliances, mergers and significant investment to
exploit these strategic opportunities.10
To achieve these ends, the Green Paper prefers to take an evolutionary approach to
regulating the converging communications market. The document suggests that greater
9 DTI and DCMS, Regulating Communications: Approaching Convergence in the
Information Age (CM4022), HMSO, July 1998, p.3.
16
coherence will be required in economic regulation across all digital delivery media. To
some extent the foundations for such coherence have been established by the Competition
Bill and the merger controls which exist under the provisions of the Fair Trading Act.
The government intends through it general competition policies to prohibit anti-
competitive agreements and stem any abuse by dominant players of their position within
the communications markets. The Green Paper suggests that closer co-operation can be
achieved between competition authorities (OFT, DGT, DGFT) and the communications
regulators.
This will be complemented by sector-specific regulation and the current regulators -
Oftel, ITC, Broadcasting Standards Commission (BSC), BBC Governors, and the Radio
Authority - will continue to be responsible for their demarcated areas of jurisdiction. The
government argues that sector-based regulation is required for essential areas of gateway
intermediation between suppliers and consumers of content. These include: Conditional
Access (CA) – whereby service providers can ensure that they are paid for their services;
and EPGs – through which consumers make their programming choices in a multi-
channel future. The gateway operators could abuse their dominant position within the
market for consumer services, most especially if they have cross-media interests. These
controls could undermine access and universal services. Consequently, sectoral
regulation, which combines economic and ethical concerns, has been deemed to be
appropriate to stem such a concentration of power.
10
Regulating Communications, p.4.
17
The Paper argues that the anomalies created by regulatory overlap can be overcome by
providing more detailed regulations and through ensuring co-operation between different
bodies with the establishment of co-ordinating group. Where problems cannot be solved
within the current legislative framework, it will be necessary to amend legislation on a
case-by-case basis in advance of possible wider change. The Paper comments:
“ As new services become more significant, changes to regulatory aims and methods will
be needed. Making changes early in the process might help to ensure a regime
appropriate to the digital future at an early stage. It could give the UK `first mover’
advantages. However, it is impossible to be sure how the markets will develop. We risk
developing a system of regulation around a prediction of what the digital world will look
like which, if it turns out to be mistaken, will leave the regulatory system obsolete. …
investors in new services, and those who run the traditional services which will remain
important, require regulatory certainty and stability, which would be undermined by
further major legislation so soon after the 1996 Broadcasting Act. As long as the current
structures and aims do not distort the penetration of new products, the Government will
favour an evolutionary approach to regulatory development, building on the strengths and
flexibilities of the current system.”11
This approach also underpinned the Paper’s response to cultural and related regulation. In
particular, the government argues that, within the short-term, incremental reforms will
ensure that the principles of public access, universality, consumer redress and the
equitable and democratic distribution of information continue to be realised. In the
longer term, it presents a number of possible regulatory outcomes:
Separate infrastructure and content regulators: This could correspond to market
segmentation and the distinct set of regulatory concerns which exist. For instance,
open access and wide coverage on the one hand; quality and diversity elsewhere. It
may, however, prove to be insufficiently flexible to cater for further convergence and
consequent market integration.
Economic and Content regulators: This model would provide an alternative split
between separate bodies according to their regulatory function between economic and 11
Regulating Communications, p.5.
18
content issues. However, the structure would not avoid overlap. For instance, content
regulation has important economic consequences including diversity of content and
plurality of voice. Similarly, competition rules can have a vital impact on the
structure of the industry through which content is provided.
A horizontal split: An overarching body could ensure a coherent and co-ordinated
approach between either of the above set of regulatory divisions. However, whilst,
there is a clear need to remove regulatory overlaps and simplify the structure,
different market segments will continue to persist and retain distinct characteristics
for some time to come.
A single regulator: A further approach would be to create a single regulator or an
umbrella regulatory authority. This would be able to take a broad view of the
converging sectors, ensure a consistent approach to their regulation and provide a
flexible response to the emergence of new services. It could provide the breadth of
scope and regulatory expertise as media and multi-media organisations diversify.
However, questions persist about the accountability and bureaucratic nature of a
single regulator. Most especially, criticisms have suggested that such a body would
prove to be unwieldy, opaque, and subject to clientelism. 12
Participation in the Policy Consultation Process: The British Screen Advisory
Council (BSAC) Convergence Working Party’s response to the Green Paper
The Green Paper was published in June 1998 and was followed by a period of policy
consultation which lasted until the 30th
November during which interested parties were
invited to submit their responses to the DTI and DCMS. Several regulatory bodies (such
as the ITC and the BSC) and commercial organisations (such as BT) provided
recommendations to the government. As the author participated in it deliberations, the
rest of this paper will focus on one of these responses provided by the British Screen
Advisory Council’s (BSAC) Convergence Working Party. 13
12
Regulating Communications, pp.39-40. 13
The Working Party was chaired by Simon Olswang (Senior Partner, Olswang Law
Firm). Its membership included Adam Singer (FlexTech), Paul Styles (KPMG), Dr.
Richard Collins (BFI), Dominic Morris (BBC). The Researchers were Jonathan Davis
(London Economics) and Mark Wheeler.
19
The BSAC Working Party considered that the involvement of two government
departments in the writing of the document was indicative of the challenges that the UK
faces to develop a comprehensive set of policies for the information, communication and
telecommunications sectors. In particular, there is the challenge of integrating these
sectors within the mainstream of competition policy while recognising their special
attributes and responsibilities. Conversely, the committee believed that one effect of
convergence is that the specialness of those attributes will diminish and, in time, may
well become largely irrelevant. For instance, broadcasting regulation was previously
defined by spectrum scarcity, public good characteristics and strong externalities (such as
the benefit to society of impartial news, or educational programming). Yet, within the
converging communications market, these services will become widely available through
a diverse set of service providers and means of dissemination. It commented:
“ The converging sectors, however, are moving away from a restrictive, licensing-based
regime. Society’s ability to prescribe the services we want to see delivered and to
proscribe the activities we wish to thwart is dwindling. At the same time, the
transformation of the regulatory framework in the UK is rightly acknowledged by the
government and throughout society as a pre-condition for Britain to achieve the social
and economic benefits which will flow from a vibrant "knowledge- driven" economy.
The government has stated that the information and communication technologies (ICTs)
will promote production, services and investment within the national and global
economies.”14
Moreover, the Working Party contended that the concept of public service must continue
to be realised in a multi-channel future. Indeed, it was suggested that the role of the
14
British Screen Advisory Council (BSAC), Response to the DCMS and DTI Green
Paper `Regulating Communications: Approaching Convergence in the Digital Age, 30th
November, 1998, p. 1.
20
public service could be enhanced as services will be delivered in fundamentally new and
varied ways. Therefore, these imperatives demand appropriate and flexible regulation
which will provide effective protection and promotion of citizen and consumers rights,
whilst, at the same time, encouraging current and future investment in the knowledge-
driven economy. BSAC maintained that it would be necessary to avoid a reliance on
approaches that the force of the new technologies is in the process of sweeping away.
However, it will be necessary to promote the take-up of those technologies without
sacrificing either the historical benefits, notably of universal access and public service, or
the future opportunities for the UK to play a leading role in the emergence of the new
markets.
From these principles, the Working Party suggested several recommendations within its
response:
First, it was stated that a system of "lead regulator" should be established to handle each
case, with a duty to liaise with other regulators. Ultimately, the aims of regulatory
consistency, efficiency, transparency and accountability would be best served by a
unified regulatory regime. In practice, however, carriage and content, though frequently
overlapping, are today subject to such different sets of rules that changes required to
integrate their treatment would be highly disruptive. Therefore, the Party suggested that a
"lead regulator" system needs to be established to handle each case by case, with a duty
to liaise with other regulators. Such a system would accelerate the development of
21
regulatory expertise and best practice, and enable cases to be decided more efficiently,
quickly and authoratively.15
Secondly, it was suggested that a House of Commons Select Committee should be
established, with the authority and resources of the Public Accounts Committee, to
oversee policy and regulation for the information, communication and
telecommunications sectors. Endowing a House of Commons Select Committee with
responsibilities to scrutinse the actions of regulators would enhance the accountability
and transparency of the regulatory process, as well as stimulate among legislators a
greater awareness of and involvement in communications and information policy. The
Working Party would welcome the establishment of a Select Committee with the
expertise, resources and authority of the Public Accounts Committee, to carry out
scrutiny of the converged sectors.16
Thirdly, the Working Party argued that a National Communications Consumers/Citizens
Council should be created to carry out research, promote debate and advocate consumer
and citizen interests. Self-regulation and self-protection mechanisms should be put in
place within a clear policy framework. Effective self-regulation would be enhanced by
consumer and citizen action, especially through a properly-constituted and officially-
recognised body (or bodies) charged with reflecting and promoting the consumer/citizen
interest. This view is entirely in line with the Government’s wish to establish consumer
councils for the utilities. It seems anomalous that less emphasis should be placed on the
15
BSAC. Response to the DCMS and DTI Green Paper, p.7.
22
formal involvement of consumers/citizens in the communications and information arena
than in say, water or energy services. Consumers and citizens should have the right of
access to an independent body that carries out research, promotes debate and advocates
consumer and citizen interests in information and communication services. It would also
offer advice to government, based on research, and provide an independent means of
redress for complainants, supported by statutory powers.17
Fourthly, that self-regulation and self protection mechanisms should be put in place
within a clear policy framework. Greater weight needs to be given than at present to self-
regulation and self-protection. For self-regulation to work, it needs to take place within a
clear regulatory and policy framework. Self-protection requires the provision of facilities
for users to deploy. Self-regulation and self-protection are appropriate responses to the
reduction in the regulators' ability to determine what content is carried in what services
and over what networks.18
Finally, and most crucially the Working Party response argued that a key element of a
pro-competitive policy for the sectors is ensuring access to the full range of services;
access is becoming as important as provision in the achievement of public service
objectives for the sector. The conditions for social inclusion should be improved upon in
the digital environment. This proposition is a continuation of the history of funding
universal service: when information was held in books and books were expensive, the
objective of ensuring universal access was satisfied by public libraries which bought
16
BSAC, Response to the DCMS and DTI Green Paper, pp.13-14. 17
BSAC, Response to the DCMS and DTI Green Paper, p.14.
23
books and made them available for free to people who could not buy the books.
Broadcasting represented the next wave of information provision, with the added
functions of producing programmes, scheduling and transmitting them. In the digital
world, the third wave occurs: the making and distributing of the content is no longer
enough, since citizens must now be given the capability of searching, retrieving and
interacting with content from a myriad of sources. Universal access to the means of
provision remains a fundamental aim in the digital environment. 19
In particular, Electronic Programme Guides (EPGs) should be made freely available to
provide open gateways for the users of digital services. In this manner, they may promote
greater choice in services for consumers and create equal opportunities for service
providers. The Working Party envisaged, for example, the "first screen" when a viewer
switches on his or her receiver to consist of a series of buttons taking him or her to the
EPG s/he chooses. In this way, the potential for anti-competitive effects of dominant
EPGs will be reduced. 20
Further, as the present technology already allows for a multiple number of EPGs, from
which users may pick and choose programmes, regulation should ensure that EPGs
should operate more akin to Internet search engines. Such regulation would encourage
greater degrees of access for users who could choose from a wider range of diverse
services drawn from a plurality of competing EPGs. In turn, gateway abuse would
diminish as competition in provision would be encouraged.Through must-carry rules,
18
BSAC, Response to the DCMS and DTI Green Paper, p.11. 19
BSAC, Response to the DCMS and DTI Green Paper, pp.8-9.
24
EPGs could serve to make public service forms of provision more visible within the vast
menu of new services. They could make conspicuous services which are being made
available to encourage citizen access, knowledge and information. In such a manner,
plurality and diversity could be ensured and access to national and European content
could be enhanced.21
The BSAC Working Party’s approach was underpinned by the notion that public service
principles and concepts of universality must continue to exist in the converging
communications environment. To this end, it ultimately rejected market liberalization as
being the most effective method through which to deliver such services. However, the
concepts of public service and universality will have to evolve as they are being delivered
in new and fundamentally different ways. Therefore, the committee felt that regulatory
reforms were required to encourage a more competitive and equitable marketplace so that
new entrants would be attracted and fairness ensued. As mentioned before, the BSAC
response was only one of many which are now being studied in current course of UK
Communications policy. It remains to be seen how much of the Working Party’s
recommendations will find their way into the proposed White Paper, Bill and eventual
Act.
20
BSAC, Response to the DCMS and DTI Green Paper, p.8. 21
BSAC, Response to the DCMS and DTI Green Paper, p.8.
25
Conclusion
The 1998 Green Paper Regulating Communications was concerned with developing the
appropriate regulatory structures through which producer and consumer demand could be
mutually and efficiently satisfied. Alongside, these market-led principles, it aimed to
provide protection for current analogue-based broadcasters, to ensure plurality and
diversity through invoking the Competition Bill and to retain the concepts of public
service and universality within a democratic environment. To this end, the Paper
suggested that it would be necessary to develop new regulatory structures from the
existing regulators in an incremental manner rather than foster any dramatic restructuring
of these institutions:
“ It is essential to the success of this approach that the effectiveness of regulation and its
impact on the development of markets is closely monitored, and the need for detailed
controls are constantly reviewed. The system must adapt promptly to changing
conditions. We aim to ensure that regulation remains appropriate at the minimum level
necessary to achieve its clearly defined purposes. Our aim is to chart a clear course for
the evolutionary development of the existing framework through this period of change,
whilst retaining flexibility to deal with the uncertain pace and direction of change.”22
From this document, the British government’s policies toward the converging
communications marketplace can be characterised as providing a compromise between
state protectionism and market-led economics. However, despite attempting to provide
such a balance, it remains unclear whether this approach to the virtual economy and the
audio-visual industries is workable.
26
The Green Paper maintained that previously discreet regulatory agencies would have to
act in a more secure and unified manner. Yet the institutional histories, interests and
cultures that these actors represent may mean that they will pursue different priorities
rather than act coherently. For some audio-visual companies, the current structure of
multiple regulation has increased uncertainty. Effectively, should already discredited
forms of national or local regulation continue to be employed in an even more confusing
and diverse international communications environment? Can these regulatory reforms
ever be divorced from political or strategic interests as media and multimedia
corporations pledge overt or tacit support for political parties or lobby for competitive
gain?
Within, its policy response, the British Screen Advisory Council Working Party
suggested several recommendations which could establish a more transparent and
responsive system of communication regulation. A number of the proposals were radical,
most especially the creation of Parliamentary Select Committee which would oversee
policy and regulation for the information, communication and telecommunication sectors.
Further, it was Working Party’s belief that a more unified regulatory order would be
required, in which `lead’ regulators could demarcate responsibilities and liase with other
regulators on a case-by-case basis. As this paper has previously suggested, it will be
instructive to consider whether some or any of these proposals will be incorporated into
the government’s current communications policy.
22
Regulating Communications, p.5.
27
The proposed legislation also faces the problems which are associated with the
international or global nature of the information and communication marketplace.
Previous policy initiatives have been confronted with by supranational corporations (for
example, News Corporation) who have circumvented national rulings (often with the
compliance of governments) to gain monopolistic control of specifically delivered
services within the national marketplace whilst being nominally foreign owned or
transmitting from abroad. The global nature of ICTs, (for instance, the World-Wide-Web
(WWW)) would appear to exacerbate this development. Moreover, the European
Commission (EC) has developed its own Green Paper on Convergence and it might be
suggested that it would provide a more appropriate layer of regulatory oversight.
Finally, at a philosophical level, the British government’s approach appears to signify a
considerable degree of confusion concerning the role of regulation in the provision of
efficient and equitable forms of resource redistribution within the converging
communications market. Within this context, a debate exists concerning the role of the
nation state as a policy initiator for the expansion of the (global) information
marketplace. From a libertarian perspective, the ICTs, in particular, the Internet, are held
to be a form of communication which function independently of either state or societal
interference. Information technology has been defined by a broad range of political
agents as the sphere in which competitive advantage will be attained through the
retraction of state intervention. Alternatively, other viewpoints conceive of ICTs as being
representative of socio-political as well as financial forms of capital.
28
Ultimately, this paper contends that the converging information and communications
systems should be perceived as a means through which social inclusion and citizen
empowerment may be encouraged. They must be harnessed for citizens’ benefit and may
have profound influence in the future of our social, political, educational and cultural
experience. The new and existing mediums lower the entry costs for the creation and
distribution of content, and potentially offers the public with universal access to an ever-
richer source of digital information. This dissemination of information must be equitable
to allow members of the public to fully engage in the opportunities which are being made
available.
Therefore, the national state policies, and the international co-operation between states,
which are designed to promote a regulatory framework for investment and innovation are
vital for the protection of the public interest and consumer need. As this new world
throws up public policy challenges, it will be seen to be necessary that states should
ensure that information remains a general good for all citizens and not simply a
commodity to be bought by those consumers who can afford to pay for it.