Regula3ng PSB
Ofcom is required to set minimum requirements (or quotas) for the following ‘Tier 2’ genres: news and current affairs programmes on ITV1, Channel 4 and Five; nations and regions programming on ITV1; and schools output on Channel 4. Ofcom requires non BBC channels to have 25% independent output and 5365% original output. Ofcom state that UK content has greater public value than foreign imports.28 They must also provide high quality international, national and regional news and current affairs programmes. “Tier 3” responsibilities to encourage quality and diversity do sometimes come with specific requirements such as children’s programming on ITV1 and ethnic and educational programming on Channel 4. Ofcom has the power to fine broadcasters for not complying with Tier 2 requirements, but its powers to act if Tier 3 criteria are not met are less clear cut. Ofcom also has the specific power to intervene over terms of trade between producers and commercial PSB broadcasters. It has used these powers to help independent producers secure better terms of trade, first in 2003, and again in 2006. It has no power to intervene over terms of trade for non PSB services. The only protection for the independent production sector outside the PSB system is the 10% EU wide requirement of all broadcasters. Reviewing PSB Ofcom is required to review the state of PSB in the UK (commercial and the BBC) every 5 years and to make recommendations to Government on any changes needed. Since Ofcom began in 2003, it has held two reviews of PSB, one in 2005 and one in 2008. The frequency of these two reviews reflects Ofcom’s concerns over the failure of the commercial PSB system as digital switchover approaches (covered in Chapter 3). But its ability to influence the whole PSB offering is severely limited by its lack of power and influence over the BBC. Assessing the market impact of the BBC The only direct influence Ofcom has over the BBC is its involvement in the public value assessment of “new BBC services”. As covered in Chapter 2, the public value assessment involves both a review of the public value created by a BBC service and an assessment of any market impact the service might have. Ofcom have the role of performing the market assessments for new BBC services only with market impact assessments for existing BBC services (BBC1, Radio 1, BBC3 etc) and BBC delivery platform (Project Canvas) and support activities (talent spending) conducted by the BBC Trust. Promoting effective competition Ofcom’s final role is to promote effective competition across broadcasting and telecoms markets. In the telecoms market its most significant decision was to force the separation of BT’s local exchanges, wholesale and retail businesses and to open up the exchanges to third party broadband and telephony providers. In the area of broadcasting, Ofcom’s main interventions are in regulating and monitoring the terms of third party access to the Sky satellite pay TV platform and, more recently the review of BSkyB’s premium pay TV services. The latest review resulted in a recommendation that BSkyB be required to wholesale its premium sports channels to all third party platforms and a price that allows such platforms
28 Ofcom Second Review of Public Broadcasting – Phase One – April 2008
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