PUBLIC AFFAIRS: The battle to steer the Comms Bill - Robert Gray looks at the lobbying efforts of the media firms before the Communications Bill becomes law

The leading broadcast media owners in the UK have been studying the draft Communications Bill with intensity. Published by Secretary of State for Culture and Media Tessa Jowell on 7 May, this long-awaited white paper has gone far further in loosening TV and radio ownership regulations than pundits expected, surprisingly opening the way for greater foreign ownership of UK media channels.

Another reason why it has caused such a stir is that it addresses the issue of media convergence through the creation of a super-regulator, Ofcom, that will replace five existing regulatory bodies: the Independent Television Commission, the Broadcasting Standards Commission, the Radio Authority, the Radio Communications Agency and Oftel.

Ofcom is expected to have a powerful role carved out for itself, including playing a part in deciding on sensitive media mergers and acquisitions and being handed a 'co-regulatory' role with regard to the BBC, which is currently beholden only to its governors.

Although the Bill has been gestating for two years and has been framed after much consultation with the leading media owners, there are still plenty of areas where clarification will be required. There are also some points that at this juncture are quite clear but with which particular media owners take issue. Undoubtedly, a period of tremendous lobbying activity lies ahead.

Before the Bill gains Royal Assent, in summer 2003 at the earliest, but more likely towards the end of next year, it will unusually be the subject of scrutiny by a joint Commons and Lords committee under the chairmanship of Lord Puttnam. Amendments will assuredly be made before a first parliamentary reading this autumn.

What is by no means certain is what those amendments will be and which media owners they will benefit.

There is a lot to play for and a long way to go, including a standing committee stage after the Bill's second reading that may take around two months to conclude early in 2003.

'Clearly it is going to create a substantial volume of work in public affairs and PR. There are considerable possibilities of change in this bill,' says Royal Television Society chief executive Simon Albury, a former United Broadcasting and Entertainment director of public affairs.

So who will be pushing for what? And how will they be arguing their case?

News provider ITN - in which Carlton, Granada, Daily Mail, Reuters and United Business Media all currently have a 20 per cent stake - considers the crucial area to be the role of the BBC. In the past, ITN has felt aggrieved at the leeway given to the publicly-owned broadcaster in launching new services and would like to see greater clarity introduced to the approvals process.

'The draft Bill usefully establishes the principle of co-regulation, with Ofcom assuming some powers over the BBC,' says ITN director of public affairs Mark Gallagher. 'But it is Ofcom's role in enforcing the Corporation's tailor-made Fair Trading Commitment and in bringing external scrutiny to the rather cosy approvals process for new licence fee funded services that will be the true test of the Government's radicalism. The Department of Culture, Media and Sport is due to publish a revised BBC Agreement in the next few weeks. Until then, the jury's still out.'

The UK's youngest terrestrial television station, Channel 5, has, thanks to the relaxation of ownership proposed in the Bill, effectively become a bid target - with rumours flying that the Government has paved the way for its purchase by media baron Rupert Murdoch. This is widely seen as a concession as Murdoch is still precluded from buying into ITV due to his national newspaper ownership. To his certain consternation, the ban on foreign ownership of ITV companies has otherwise been lifted.

'Some of the ownership stuff was unexpected, but it is a good thing as that will bring in investment,' says Channel 5 director of corporate affairs Sue Robertson.

She adds, however, that Channel 5 is a little anxious about a part of the Bill that implies that after the switch off of the analogue signal (which the Government expects to do between 2006 and 2010) there will not be an automatic renewal of digital licences, which initially will be valid until 2014. This lack of transparency about the future, she argues, may scare off potential investors and could lead to a repeat of the 1991 ITV franchise bloodbath that followed the 1990 Broadcasting Act and led to the replacement, among others, of Thames by Carlton in the London region.

Channel 5 is conducting most of its lobbying in-house but is using Bell Pottinger Public Affairs for parliamentary monitoring and occasional strategic advice on these and other issues.

'Most people are still digesting the Bill and preparing position papers,' says Carlton director of corporate affairs Shaun Williams. 'There is not a definitive position as yet.'

There are, however, a number of issues raised by the Bill that the ITV companies are keen to address. Given that, as Williams confirms, '90 to 95 per cent of the issues are common' to all of the ITV franchise holders, the bulk of the lobbying and monitoring activity is being dealt with by ITV Network Centre.

For a start, ITV wants to make sure that satellite TV services 'must carry' ITV: at present the Bill only stipulates that the public service broadcasters (PSBs), i.e. the current terrestrial channels, must be carried by satellite after the switch off of the analogue signal, the date of which is still far from concrete. ITV will also push for more clarity on the 'large degree of discretion'

Ofcom is likely to be given powers in areas such as determining regional production quotas and judging whether programming meets public service broadcasting requirements. A source from the public affairs team at Network Centre says ITV wants to see a 'happy medium' come out of the Bill in which Ofcom is neither too prescriptive nor the scope of its powers too woolly.

Channel 4 deputy head of corporate relations Martin Stott, in common with ITV and Channel 5, has concerns about the 'must carry' stipulation - satellite services being obliged to carry the PSBs. He is also keen to ensure that the PSBs stay on the first page of all Electronic Programme Guides.

Channel 4 is in favour of Ofcom, but Stott argues that the BBC should be more fully overseen by the new super-regulator. Stott would also like to see the potential 'conflict' of Murdoch-owned BSkyB's role as both a platform owner and service provider addressed in the Bill.

One cloud on the horizon is the review into the radio spectrum carried out by Warwick Business School professor Martin Cave for the DTI. This suggests that all users of radio spectrum should be charged a fee. At present, Channel 4 does not have to pay a fee of this kind. But the notes to the Communications Bill imply that the Government may take on board the findings of Cave's review.

'We think it's mad. We have a perfectly efficient system as it stands,' says Stott.

GPC is working with Channel 4 but it is not running a campaign at this stage. BSkyB, which is working with lobbying agency Portland, is also implacably opposed to a spectrum 'tax' which it asserts would hinder digital roll-out and would like to see the PSBs pay for the use of its encryption technology (which allows the signal to be carried) where appropriate.

On the matter of media ownership, BSkyB takes the stance that M&As should be governed by competition law rather than by any sector-specific law overseen by Ofcom.

The Bill affects radio companies, too. 'The key thing we'll be pushing for is to further relax the rules on media ownership for local radio,' says Capital Radio director of strategy and development Nathalie Schwarz.

At present the so-called 'three plus one' rule limits the amount of stations commercial radio companies may own in each UK region. Working with consultancy Finsbury, Capital is also keeping a watchful eye on spectrum charging.

As for the BBC, it is clear that it will have it watch out for attempts by its commercial rivals to strengthen Ofcom's powers in regard to regulation of the state-owned broadcasting giant. The Beeb's in-house public affairs team is sure to be busy. As one anonymous BBC source puts it: 'The Communications Bill is an important publication. We will be examining it in detail and will be engaging fully with the Government's consultation over the coming months.'

Lobbyists for the media companies will be trying to shape its final outcomes before next summer.

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