Pre-legislative scrutiny of the Draft Media Bill

Local news and information is what makes many people turn to local radio and we agree that the Government should prioritise this area. However, we are concerned that Ofcom regards its responsibilities as unclear, especially given that the Government committed six years ago to providing greater clarity. We recommend the Government provide Ofcom with clearer guidance regarding enforcement of the obligation on local radio to provide locally-gathered news. This guidance should either be included on the face of the Bill, or published alongside the introduction of the Bill to ensure Parliament is able to scrutinise it appropriately.

DCMS says that its intention is to use the power to make regulations regarding digital radio stations’ localness requirements only in consultation with Ofcom and other stakeholders. We cannot envisage a scenario in which it would be necessary for the Secretary of State to exercise her power without consultation. We also believe the best legislative practice is for the Government’s intentions to be clear on the face of the Bill. We recommend that the proposed power to make regulations regarding localness requirements is amended to require consultation with Ofcom.

The Government has demonstrated a necessity for the power to regulate for localness requirements to be so broad as to include amendment of any Act of Parliament. This power should be restricted to specified Acts in line with similar provisions in the Communications Act 2003. We recommend that the Bill should specify those Acts of Parliament which would be subject to this power. We recommend that the Bill should specify those Acts of Parliament which would be subject to this power. (Paragraph 15) Radio selection services

The radio industry has legitimate concerns about the potential for larger platforms to control access to stations and drive audiences elsewhere. While listening to radio still makes up the majority of audio consumed over smart speakers, and smart speakers only account for 14 percent of total radio listening, the balance of power is likely to move away from stations and towards platforms over time. This shift presents a risk to the radio industry, which the Government needs to address if the industry is to continue to thrive in the long-term. We strongly support the inclusion of provisions on radio in the Media Bill, and recommend the Government includes the Bill, with these measures, in the legislative programme for the next session of this Parliament.

The radio industry and platforms raised legitimate concerns about the extent to which the Department for Culture, Media and Sport has examined the implications of the legislation. That the Department did not publish a full impact assessment for the radio selection services provisions alongside those for other Parts of the Bill has made it more difficult for us, and those directly affected by the Bill, to consider the impact it will have. While we support the overall aims and provisions of the Bill, we recognise that they are a step-change for the sector and it is vital that the Government 22 Draft Media Bill: Radio Measures engages with platforms and other technology stakeholders significantly and at pace to get the detail right. We urge the Government to pursue its technical engagement with stakeholders with the utmost urgency and to provide an update on progress to us when the House returns in September. We urge the Government to pursue its technical engagement with stakeholders with the utmost urgency and to provide an update on progress to us when the House returns in September.

The future risks to radio are not confined to voice-activated devices. Platforms can make it very hard for car drivers to find radio, simply by self-preferencing their own or others’ content and leaving listeners to swipe through later pages to find their choice. Connected car manufacturers and the providers of in-car systems could choose not to offer broadcast radio at all and can control which apps are available. As a result, we are concerned that the Government may have overestimated the extent to which listeners are easily able to find their preferred stations in in-car systems. Noting the Government’s current position that in-car infotainment systems should not be included within the scope of the Bill, we recommend that the Government and Ofcom should proactively keep this issue under close review. Noting the Government’s current position that in-car infotainment systems should not be included within the scope of the Bill, we recommend that the Government and Ofcom should proactively keep this issue under close review.

The Secretary of State’s power to amend the definition of a radio selection service is crucial for the future-proofing of the regulatory scheme, including for in-car systems as well as for new and emerging technologies. While we welcome Ofcom’s horizon-scanning role, any use of the power to amend the definition of a radio selection service should be accompanied by clear evidence to inform the decision by the Secretary of State and by Parliament. We recommend the Government redraft the Secretary of State’s power to amend the definition of a radio selection service to require the Secretary of State to consult Ofcom before issuing regulations.

There is broad agreement between platforms and broadcasters on the need for provision in the Bill to ensure legacy devices can be exempted from requirements on radio selection services. We believe that allowing Ofcom to exempt some previously- designated devices on legacy grounds would address this issue. We recommend the Bill be amended to enable Ofcom to de-designate legacy devices so that they are no longer subject to the provisions.

We acknowledge the Government’s preference to avoid putting in primary legislation a number specifying what a “significant” number of users is and what “used by” means. In order to adapt to reflect changes in technology and audience habits, we believe that these terms may be best judged by Ofcom under delegated powers. Accordingly, we welcome Ofcom’s role in informing the regulations designating or specifying radio selection services and the duty on the Secretary of State to give reasons if her regulations differ materially from Ofcom’s recommendations.

We disagree with the Government’s conclusion that the negative resolution procedure is appropriate for regulations designating a radio selection service or amending its definition. The Bill does not require the Secretary of State to accept Ofcom’s recommendations and allows her to substitute her own. The requirement Draft Media Bill: Radio Measures 23 to give reasons if the regulations differ materially from Ofcom’s recommendations is welcome but will be a token gesture if those reasons are not subject to scrutiny before the secondary legislation comes into force. We recommend regulations that designate and specify descriptions of radio selection services are subject to the affirmative procedure.

The Department told us that it intended to consult Ofcom and other stakeholders before changing the statutory conditions for designating a radio selection service but this does not appear in the Bill. If the Government intends to carry out consultation with Ofcom and other stakeholders before exercising a power to make secondary legislation, that intention should be reflected in the content of the Bill. We recommend that consultation with Ofcom and industry stakeholders prior to the Secretary of State exerting the powers provided in the draft Media Bill to make secondary legislation on the designation of radio selection services be made a prima facie statutory requirement in the Media Bill.

The Government’s approach to on-demand and online-only content appears at odds with market trends. Listeners are increasingly choosing to access content on- demand or listen to online-only stations and there is merit in including these forms of content provision within the scope of the Bill. We agree that the Government should limit the Bill’s protections to Ofcom-regulated stations. However, we consider that it is possible to extend the provisions to these stations’ on-demand and online- only content without extending such protections to non-Ofcom regulated content producers as well. Limiting this provision would ensure that any extension of this legislation would only benefit those stations that abide by Ofcom broadcasting standards. We recommend the Government amend the Bill to include on-demand and online-only content from Ofcom-regulated broadcasters.

We recommend that the Bill include an explicit power to amend the definition of an internet radio service. This would enable the current definition, which specifies that only stations providing online live simulcasts of their broadcast radio service and which make “reasonable efforts” to use the same advertisements, to be amended in the future to include other types of content. Such a power should require that any amendment by the Secretary of State is preceded by a report from Ofcom and be subject to the affirmative procedure, requiring it to be actively approved by both Houses of Parliament.

The absence of a full impact assessment of the radio provisions makes it difficult to ascertain how burdensome the preferred route provisions will be. However, the evidence we heard suggests that there will be far fewer routes required than platforms are anticipating. Nonetheless we recognise that platforms will not only have to facilitate on-boarding but provide ongoing support as well and we expect these responsibilities, and their associated costs, to be considered when deciding the threshold at which selection services should be designated. Ofcom should consider the resource implications of providing preferred routes when recommending the threshold at which radio selection services should be designated. The Government should take account of this recommendation in its decision on designation. (Paragraph 57) 24 Draft Media Bill: Radio Measures

The Government is seeking to simplify the public service remit; however, removing the requirement to provide specific genres of content goes beyond mere simplification. The removal of origination quotas for UK children’s content for commercial Public Service Broadcasters led to significant reductions in the production of original children’s TV, and we are concerned that the draft Media Bill’s removal of the specific reference to other genres will lead to similar reductions in content, particularly in the less commercially successful areas. We recommend that the Government retains obligations on Public Service Broadcasters to provide specific genres of content.

We are concerned that the “backstop” power, enabling the Secretary of State to specify new categories of audiovisual content should the Secretary of State consider that they are being underserved, creates the perception that media regulation is no longer independent of government. We recommend that the Secretary of State’s power to specify new categories of audiovisual content should only be exercisable following a recommendation from Ofcom.

Allowing Public Service Broadcasters to use a wider range of services to contribute towards their remit, including on-demand, should not come at the expense of linear broadcast audiences. It is imperative that broadcasters make their content as accessible as possible to all audiences, regardless of whether viewers have the means or desire to switch to on-demand services. We urge Ofcom to hold Public Service Broadcasters to the highest standards and capitalise on its role as regulator of both the broadcasting and broadband industries. We recommend that Ofcom uses its monitoring of home internet access to inform its assessments of the accessibility of public service content on broadcasters’ linear channels.

Our conclusions about the impact the Media Bill could have on audiences are part of a wider context of change in the broadcasting industry. We continue to be concerned about the impact of the BBC’s Digital First strategy on linear TV and radio audiences. Sharing content across large areas risks undermining the sense of localness that has, until now, made BBC local radio distinct. We are similarly concerned that the direction of travel in linear TV provision could also diminish coverage for local audiences. While we recognise that the latest license fee settlement is difficult for the BBC, its changes to local radio and local TV provision are evidence that the drive to prioritise digital strategies can often come at the expense of local audiences.

We agree that there should be a minimum length of time for which material has to be available on-demand so that people can watch it at a convenient time. However, Public Service Broadcasters raise legitimate concerns about whether 30 days is appropriate for every type of content, as broadcast and on-demand rights in areas such as sports, news or music can be significantly shorter. We recommend that 46 Draft Media Bill:Final Report the Bill be amended to allow the Secretary of State to vary the 30-day on-demand requirement for particular types of content, following consultation with Ofcom and other appropriate stakeholders.

The increased flexibility of the public service remit should be accompanied by a lower threshold for Ofcom to intervene if it considers that a Public Service Broadcaster is failing to meet its remit. The current bar of “serious” is too high. Enabling Ofcom to step in earlier would protect the regime and increase public confidence that the flexibility of the new remit will not be accompanied by a decline in standards. We recommend that the Bill should lower the threshold at which Ofcom can intervene to protect the public service broadcast regime, enabling it to step in before concerns about whether a Public Service Broadcaster is meeting its remit have already become serious. (Paragraph 34) Listed Events

We welcome the draft Bill limiting the Listed Events regime to Public Service Broadcasters. These events are important sporting occasions with immense cultural and social impact and the regime is critical to the UK’s sporting and media landscape. However, it is unfortunate that the Government has not taken the opportunity to use the legislation to close the loophole that allows an unregulated streaming service to buy the rights for a listed event and put them behind a paywall. We recommend that the Government amend the Media Bill to close the loophole allowing an unregulated streaming service to buy the rights for a listed event and put them behind a paywall.

Digital rights should be included as part of the Listed Events regime to reflect sweeping changes in how audiences consume content since the original legislation was passed. We recommend that the Government includes provisions in the Bill to enable digital rights to be included in the Listed Events regime without the need for further primary legislation. (Paragraph 47) Prominence on TV selection services

User interfaces on connected devices are very different to Electronic Programming Guides. The breadth of ways in which user interfaces can be designed means that what prominence looks like will vary considerably from device to device. What matters is ensuring that public service content is always carried and easy to find. We consider that changing the descriptor from “appropriate” to “significant” would be less open to interpretation and better meet the aims of the Bill. We recommend that the descriptor for prominence is changed from “appropriate” to “significant”.

It is in the interests of both Public Service Broadcasters and platforms that the Media Bill enables legacy devices to be exempted from requirements, given the technical hurdles involved. However, it is important that any exemption is not exploited. Allowing Ofcom to exempt certain previously designated devices on legacy grounds would address the overall issue, providing that it considers the extent to which such Draft Media Bill:Final Report 47 devices are still used by the public. We recommend that the Bill should allow Ofcom to de-designate legacy devices so that they are no longer subject to the provisions on prominence.

Only those television selection services which are deemed to be used by a significant number of viewers in the UK to access TV content online will be regulated. While the Secretary of State may only designate these services or specify a description of them following a report from Ofcom, the fact that the Minister can decide against Ofcom’s recommendations means that their decision should be open to greater Parliamentary scrutiny. We recommend that the affirmative procedure should be used when the Secretary of State designates or specifies a description of regulated television selection services.

The agreement objectives are fundamental to the must offer-must carry regime. Any ambiguity in their drafting is likely to lead to either or both broadcasters and platforms resorting far more frequently than anticipated to the dispute mechanism process. While Ofcom will be required to consult and publish guidance on how the agreement objectives will operate, it is essential that the legislation itself specifies clearly the principles that the guidance must deliver. However, the fact that successful deals already exist - such as that between ITV and Sky - suggests that agreeing mutually acceptable principles is possible. We recommend that the Government should examine the principles on which existing successful carriage deals have been negotiated and use this to improve the drafting of this provision in the legislation. (Paragraph 68) Reform of Public service broadcasters

The sustainability duty reinforces what the Channel 4 Corporation is already doing. As such, the wording should reflect their primary functions and existing statutory duties to avoid there being any unintended consequences such as a conflict with their existing obligations. We recommend that the Government should review the wording of the sustainability duty to ensure that it is compatible with the Channel 4 Corporation’s existing obligations.

It is hard to quantify the full impact of the removal of Channel 4’s publisher- broadcaster model in the absence of an impact assessment, but the removal is a fundamental change to its status. Allowing Channel 4 to produce and monetise its own content will help diversify its revenue streams but could have significant implications for the independent production sector and the wider production ecology outside of the South East. We recommend that, on introduction of the Bill, the Government should publish a policy statement setting out its intended monitoring and mitigations for any harm to the wider production sector from the changes to Channel 4’s model.

Giving regional prominence to both S4C and STV goes to the heart of what the Government is trying to achieve with this Bill: to ensure public service broadcasting is not only available on platforms but easy to find. Given the size of the revenues of those television selection services likely to be in scope of the legislation, we are not 48 Draft Media Bill:Final Report convinced that the technical issues raised by the industry are such that compliance on this issue would be a disproportionate or unreasonable requirement and so we support the inclusion of this provision in the Bill. (Paragraph 87) Video on-Demand services

The Government has said that it wants audiences to be confident that all content, however they consume it, is subject to the same regulation. Requiring only the largest Video-on-Demand providers to abide by the new Code does not achieve that aim. While the Government believes that it would be disproportionate and restrict freedom of speech if all platforms were designated, to not do so undermines the regulatory principle that the Government is seeking to deliver. We recommend that, in the same way that the Broadcasting Code applies to all broadcasters, the Video-on- Demand Code should apply to all Video-on-Demand services.

We recognise concerns that there are elements of the Broadcasting Code which do not translate well to a Video-on-Demand context, particularly how the due impartiality obligations will be managed in a non-linear environment. However, Ofcom is required to consult Tier 1 organisations before finalising the Code and so we anticipate that stakeholders’ concerns can be addressed prior to implementation. We agree that there needs to be more clarification but consider that this is best left to Ofcom’s consultation and therefore do not propose any change to the Bill.

As the fairness and privacy code will enable complaints coming from outside the UK, this could have significant resource implications for Ofcom. It is not possible to gauge in advance the likelihood of this happening, but should it become onerous then Ofcom would need to be resourced to meet this increased demand. We recommend that the Government should monitor the extent to which the fairness and privacy code is requiring Ofcom to manage complaints from abroad and resource it accordingly.

The Government’s approach to the scrutiny of the Secretary of State’s power to designate Tier 1 services is confused. Putting information into the public domain at the same time as legislating is not a substitute for parliamentary scrutiny of increased regulation, especially where the Government has argued there are issues of freedom of speech involved. We recommend, should the Government proceed with its tiered approach, it should be required to lay before Parliament a list of services to be designated no fewer than 5 sitting days before the statutory designation is made. (Paragraph 109) Press regulation

We note the conclusion of the Government’s review of Section 40 of the Crime and Courts Act and its decision that it should be repealed. However, there can be no room for complacency regarding press standards. We will continue to scrutinise the work of the media industry and hold the press accountable for its reporting. (Paragraph 115) Draft Media Bill:Final Report 49

We consider that the Bill balances the needs of audiences, platforms and broadcasters. We support the introduction of the Bill, subject to the Government reflecting on the recommendations in this report. We recommend that the Government prioritise the Media Bill in the upcoming fourth session of this Parliament. (Paragraph 120) 50 Draft Media Bill:Final Report