PSB matters says Ofcom spokesman

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Ofcom Partner, Robin Foster, responsible for strategy development with the regulator, revealed the results of Ofcom's PSB review at the CPBF conference on 5 March. 'PSB matters,' said Foster, 'and has widespread public support'.

The Ofcom PSB Review Speech to the Campaign for Press and Broadcasting Freedom Conference

Robin Foster

5 March, 2005

Good afternoon, ladies and gentlemen, and thank you for the opportunity to talk about the Ofcom PSB review, in the context of your more focused debate about the future of the BBC.

What I'd like to do is to remind everyone of the main findings of each stage of our PSB Review, and to highlight the key proposals from our final report. Although the focus of this conference is the BBC, I will talk about PSB in the round - that, after all, is one of the unique aspects of the Ofcom work - perhaps for the first time we have been able to look at PSB in depth across the broadcasting sector - at the PSB system - not just the BBC. (Although of course the BBC is an important part of that system). And although there is an understandable inclination at events like today's to focus on the immediate issues, I will try to set our proposals in the context of a 10 year forward looking view of the world - that was a key objective as we embarked on our review just over a year ago, and we are even more convinced that it is the right approach to take as we survey the rapidly changing events in the broadcasting world around us.

Let me start with a reminder about what we’ve tried to achieve in the PSB Review. The Communications Act gives Ofcom two statutory objectives:

• First, to review how well the existing public service broadcasters are meeting the purposes of PSB;

• Second, to make recommendations to maintain and strengthen the quality of public service broadcasting in the UK.

So, maintaining the quality of PSB is a primary goal of our Review. But the Act also requires us to have regard for the funds available and the cost of provision - a clear indication that our work should not be about wish fulfilment, but based on the economic realities of the changing broadcasting sector. It is not just about what we would like to see happen, but what it is sensible to expect, given available funding and the levers available to deliver desired outcomes.

In our phase 1 report, we concluded that the PSBs, taken together, were delivering many positive things - high levels of UK production, highly regarded news and information programmes, a range of high quality dramas and documentaries, and increasingly some key event programmes which encouraged viewers to actively take part in new hobbies, interests or important causes. We invest more than almost any other country on PSB, we have higher levels of original home produced programming than anywhere except the US and Japan, and we have a system which uses different sources of funding to the benefit of all viewers.

But we also reported, based on one of the largest ever surveys of viewer opinion carried out, that the public was less satisfied with the level of innovation and originality on the main networks. They complained about too many derivative and copycat programmes. They thought the BBC was behaving too much like a commercial broadcaster, with some arts and current affairs pushed to the margins of the schedules. They worried about the lack of a safe environment for family viewing before the 9 pm watershed.

On all of these issues, we published the evidence, and we are pleased to see that not only have many of these themes been identified as concerns in the Green paper, but that in many instances the BBC and other broadcasters have already taken action to address the concerns. In many ways, this alone I think justifies the idea of a periodic Ofcom review of PSB.

We also, I believe, made two other key contributions to the debate in Phase 1.

The first is the clear conclusion we reached that PSB is still important - now and in the digital age. We began our analysis with a rigorous analytical assessment of the rationale for PSB, set in the context of a clear economic framework. But, contrary to the expectations of some commentators, we also canvassed the views of the public, experts, academics, and other interested groups, to explore the wider social and cultural dimensions of PSB. The clear message from both approaches was that TV is special, it has a powerful influence on all our lives, and has important broad social purposes as well as providing immense consumer satisfaction. If left to the market alone, much that we value about PSB would not be provided, or there would be less of it, or it would be available only to those who can pay for it. Not only that, but our research clearly showed the public still supports a broadly based PSB system, with a significant public contribution to its delivery.

So, PSB matters, and it has widespread public support.

The second contribution was our work in redefining PSB in terms of broad purposes and characteristics. We strongly believe that for PSB to remain relevant, it needs to move away from the old genre-based box ticking approach to provision, (e.g. in which the regulator forces broadcasters to transmit a number of hours a week of arts programmes) to one which is based on the types of output and impact that society wants it to deliver. And one which has the scope to evolve over time, as the needs of society change.

Our public service purposes encompass a better informed society, the stimulation of interest and knowledge in a wide variety of subjects such as arts, science, nature and history, the strengthening of our cultural identity, and increased awareness of different cultures and viewpoints. These purposes have been widely debated, have gathered widespread support, and - I am pleased to say - have formed the basis both for the BBC's public purposes (published in the Building Public Value document) and the recent Green paper. Likewise, the characteristics that we suggested all PSB content should reflect - originality, innovative, challenging, engaging - and so on - have also been enthusiastically taken up by the Green paper.

As a Guardian report said at the time we published our phase 2 report, “Regulator has two good ideas in 6 months, shock"

Well, after shocking some people with a sound analytical and research base for PSB, phase 2 of our review focused on the future and how the changing world might put the provision of PSB at risk. It also looked at the opportunities for improving the impact and delivery of PSB, through the use of new formats and technologies.

We concluded that:

• The existing analogue model of commercial public service broadcasting - which has been sustained for many years by a combination of institutions, funding and regulation - will collapse at switchover, if not before. In the past we have been able to exchange access to scarce analogue spectrum in return for a variety of PSB obligations. In future, this will be less and less possible. Every household that switches to digital TV means that the value of the analogue licence to ITV and Five is a little bit les than it was before. Commercial broadcasters will be able to find alternative routes to market that do not depend on their accepting licences heavy with PSB obligations. And, in a multi-channel world, Channel 4, faced with increasing competition for revenues, might have to provide a greater proportion of commercially-attractive programming simply in order to balance its books.

• If we do nothing the BBC will over time become a near-monopoly provider of PSB. That is not a desirable outcome. Plurality - the maintenance of a range of different providers - is an important characteristic of the current system. It drives competition for quality and makes sure there are a range of different approaches to PSB content, with a range of alternative perspectives aired. And it was widely supported, we found, by both viewers and experts.

• Finally, it is clear that the broadcasting market is changing, and that digital technologies are changing the way programmes are sold and consumed. We can all now exercise complete control if we wish to do so over our own personal schedules, we can access content via a range of media platforms, and we can - increasingly - participate in the creation of content. 60% of households have digital TV. Broadband will soon reach similar levels. Digital channels collectively have a higher audience share than the main networks. This is not the result of any government or regulatory policy - it is a fact of consumer choice.

It would be madness, when devising a new model for the future to ignore these developments. Public service broadcasting needs to make innovative use of those new technologies if it is to prosper in the television market of the future.

This analysis of the future challenges we face has been generally accepted. There are few now who disagree with the conclusion that the status quo is not an option.

If that is the diagnosis of our situation, however, then what is the prescription.?

To answer this, in phase 3, our final report, we argued that we need to put in place a new PSB system, with a mix of institutions, approaches and funding, which would secure the values of PSB but in a very different environment. And we need to start preparing the ground for this new system now, rather than wait until it is too late. As a speaker at the recent IPPR conference in Oxford said, we need to act as if there is a crisis now - only then will we be properly prepared for what we need to do later.

At the heart of the new system is the BBC, properly funded by the licence fee. It is the cornerstone of public service broadcasting. It needs to be focused on the core purposes and characteristics of PSB - in its programming, its behaviour, structure and governance systems. We said that the BBC should strive to reflect public purposes and characteristics in all that it does. The Green paper seems to capture many of these points.

But PSB is more than the BBC - it is a system, within which different broadcasters fulfil different roles - and which, if the model is well designed, can deliver more than the sum of its parts.

For ITV and Five's place in this new model we have set out a realistic approach, which sustains the most important aspects of their contribution to PSB, while recognising the economic realities made clear in our analysis.

This means an increasing focus on securing from ITV and Five free to air, universally available services, which are based around high production value original programming, made in the UK - alongside a core provision of high quality independent news. If we can do this, we will already be in a far better position than many other TV markets around the world, where the commercial networks are a shadow of their counterparts in the UK.

For Channel 4, we confirm its continuing relevance as an core provider of PSB, catering for alternative interests and focusing on innovation and originality. While it may face longer term structural threats, its immediate financial outlook is strong. We have therefore proposed an initial emphasis on self help, and some regulatory initiatives which might help C4 more effectively carry out its core PSB remit.

But we have also set out our commitment to review again Channel 4's funding position in 06/07, with a view to determining then whether new approaches to securing Channel 4's essential role in the PSB mix might be needed.

We looked in detail at programming for and from the nations and regions of the UK.

In the digital world, we think that local TV, dedicated digital channels, and broadband provide a fantastic opportunity to improve the provision of local, regional and national content - much better geared to the needs of citizens and consumers than the old ITV regions, which - as we all know - were determined largely by engineering priorities, and not by local or regional needs. In Ofcom we will work over the next months to deliver new plans in these areas. Local content, delivered by digital TV or broadband, has the potential for changing the face of local and regional broadcasting over the next decade.

But we also recognised the need to secure a good deal for the public around the UK in the transitional stage up to switchover, and in particular to address concerns about regional programming during that period.

Here our focus has been on securing more high quality programming from the regions for the main PSB networks. We have increased the ITV out of London production quota to 50%, and will require it to be more widely dispersed around the UK. We have suggested that the BBC should set similar targets over time. And we have welcomed a new Production Partnership Fund (PPF) which ITV will set up and use over the next three years.

Regarding programmes for the regions, our first priority has been - contrary to some speculation before we produced our final report - to sustain regional news for the duration of the ITV digital licences. Plurality in the supply of regional news and current affairs is a key PSB objective and is more highly valued by viewers than any other type of regional content. We have also secured a significant presence for regional non news programmes in Scotland, Wales and NI. In the English regions, where all the research shows that non news programmes are extremely costly to produce and are much less valued by the public, we will implement a two stage process during which the obligations for ITV will be reduced first to 1.5 hours a week and then to 0.5 hours once switchover is underway.

Finally, and perhaps the most exciting of our proposals, we suggested the creation of a new PSB provider for the digital age: a ‘public service publisher’ or ‘PSP’…. Free of commercial pressure, free to focus on critical aspects of providing competition for quality, and free to focus on new media rather than conventional broadcasting.

A PSP could bring a burst of innovative energy to the landscape. New entrants - from ITV to Channel 4 to Sky - have tended to have a substantial and positive impact on UK broadcasting and PSB. They have each in their own way shaken up the sector and improved the output for viewers. We think a PSP could make the same sort of impact. With around £300 million of guaranteed public funding, it would have the same sort of freedom to innovate that Channel 4 was given in the 1980s.

The real creative advantage for a PSP would be that it need not be purely a TV channel in the traditional sense. Its content could be distributed on a range of different digital and on-demand platforms: from broadband to video-on-demand as well as using peak time DTT, DSat and DCab broadcasts.

The PSP would be given a steady stream of public funding, giving it sufficient scale to commission high quality, innovative content and distribute it across different digital platforms. There could be an open competition for the right to run the PSP service for a 10-year period, and the aim of the competition would be to find the bidder with the best new ideas, who had the most compelling proposition for delivering the purposes that lie at the heart of PSB in the digital age.

In our consultation the focus of submissions was in two areas:

- a high quality premier service

- a local and communities service.

The PSP represents a challenge - a challenge to industry, to Parliament, to all of us, to make the most of what the digital age offers, to use new technology, to exploit the change that is around us but in the interests of the enduring values, the enduring purposes of PSB.

Ultimately, if the idea of a PSP is to take flight, it will be a matter for Parliament. The detailed implications will need to be considered by Government and Parliament. In particular, if the idea is to be implemented, they would have to take a decision about how to fund it - whether from tax revenues, an enhanced licence fee, or from a tax on broadcasters.

We are pleased that the Green Paper has recognised the potential challenge to the current PSB system, and has suggested that there should be a review as the switchover process progresses to establish whether new funding is needed to support PSB outside of the BBC.

We are also very pleased that the Green Paper has asked Ofcom to do some more work on the PSP idea -including perhaps some more research. We will respond positively to that request, and will be announcing shortly how we intend to take the work forward. Rest assured, it will involve wide consultation with all interested parties.

My focus this afternoon has been our underlying diagnosis and our key proposals. Our review also covers many other issues:

• Greater clarity between the functions of governance, accountability and regulation

• Suggestions about how Ofcom could best carry out its role as a competition regulator as regards the BBC

• Securing a healthy production sector with effective competition

• Possible new PSB status for commercial digital channels that meet agreed PSB criteria

Time does not permit me to cover all these issues but I am happy to discuss them in questions.

Where do we go from here?

Some proposals are for Ofcom to implement e.g. the new ITV quotas and targets, our proposed production sector review and local TV

Some are for the Green paper debate and beyond e.g. the PSP, plurality, BBC governance and regulation

Some still out for consultation e.g. our proposals for the nations and regions.

At the end of these various strands of work, I hope we will have a complete blue print for a dynamic, healthy and diverse broadcasting sector. One which delivers more not less value to viewers. One which is designed for the digital future, not for the limited channel analogue world. One which can cater for audiences throughout the UK at local regional and national levels. One which retains a plurality of provision. And one which can continue to evolve over time, as the needs of society and the potential offered by new technologies changes.

I look forward to debating the issues with you today, and also encourage everyone interested to take part in the final Nations consultation, and submit views to us in writing.

DATELINE: 25 January, 2010

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