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): wheeler@lgu.ac.uk

e-mail (home): mb@doctormark.freeserve.co.uk

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.

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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.

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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

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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.

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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:

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“ 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.

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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.

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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

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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.

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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

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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

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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.

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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.

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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.

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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.

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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.

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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.

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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.

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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.

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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.