---

Digital Economy Bill [HL]

I thank the noble Lord for his clarification about the amendment and I endorse what he said about the importance of universal coverage, a point reinforced by my noble friend Lord Gordon. My noble friend Lord Whitty said that we do not have the balance right. We believe that we have. Let me reassure him that it is not a question of promoting infrastructure investment at the expense of consumers. Ofcom’s duties have to cover both. I would ask my noble friend to reflect on this: if we do not have the right infrastructure in place, we will deny the very consumers about whom my noble friend cares so passionately access to the services they need to function in today’s digital society. He is right to stress the importance of balance and we believe that we have it right. I must admit that I was impressed with the contribution made by the right reverend Prelate the Bishop of Blackburn. His spiritual analysis was better than the temporal one, quite frankly. He understands the importance of getting investment into the infrastructure right and said that we do not want a two-tier Britain, which is another way of expressing what I call the digital divide. I absolutely endorse that. He also made points in relation to public service broadcast content and the ability for it to be available on a wide variety of platforms. The noble Lord, Lord Howard, said that it is not necessary, but my noble friend Lord Maxton pointed out that if we do not ask Ofcom to do this, who is going to be responsible. That is a pertinent point. It is right that the regulator should be responsible for this. The duty is already there and we are enhancing its status. I want also to reassure the noble Baroness, Lady Buscombe, because I share her concern. We do not want to muddy the waters or obfuscate the issue—although it is a delight to hear it again, I shall not use the word "otiose". We do not believe that this provision is otiose because within this legislation we need to emphasise the increasing importance of getting the infrastructure right. It is necessary and there will be no duplication because we are doing this only once. I was asked about the use of the word "particular", a point raised I believe by the noble and learned Lord, Lord Mackay. As I have said, Ofcom already has a duty to encourage investment. This may have been appropriate in 2003 when we were on the threshold of the digital era, but that emphasis is no longer sufficient. The new clause will affect its principal duties as in all cases Ofcom will have to have particular regard to the need to promote investment. Another noble Lord felt that even that word was not sufficient and that it should have an even higher priority. Again, it is a question of balance. We believe that we have got the balance right by raising the status of the requirement for infrastructure investment. On the question of public service media content, the substantive upgrading of our communications network has also provided great opportunities for UK producers to offer innovative, original content that can meet new audiences’ demands. Public service media content is therefore now increasingly being provided on electronic platforms such as on demand, on-line services and mobile devices. At the same time, these changes threaten the production of UK public service media content such as current affairs and high-end drama by shifting advertising revenues and challenging the economics of the production of such content. Commercial public service broadcasters have already reduced programme budgets in 2007 and 2008 in response to market conditions, and Ofcom’s second public service broadcast review indicated that the total amount invested in programming is likely to fall, in real terms, by between £170 million and £350 million in the six years between 2006 and 2012. The plurality of public service media content provides significant benefits for the UK. It provides healthy competition to the BBC and purely commercial content providers, which benefits citizens and consumers. Increased investment will ensure a variety of outlets for the different content produced by the UK’s independent sector. This competition drives up the entire market and contributes to making our country a world leader in content and format exports. As regards the concerns expressed by the noble Lord, Lord Howard, in relation to the duty to encourage investment, the new clause will affect the principal duties. Ofcom will have to have particular regard in all cases to the need to promote investment. This is not a statement of principle but a clear requirement on Ofcom to consider systematically the specific impact on investment of all its decisions. At the moment, Ofcom is simply required to have regard to the desirability of encouraging investment when it appears to be relevant in the circumstances. The noble Lord asked whether the coverage of public service broadcast content would be too wide and I shall try to clarify that now. The amendments made by the clause recognise the importance of investment in public service media content. The digital age provides great opportunities for British producers to offer innovative, original content that can meet new audience expectations. However, as I have said, at the same time these changes threaten the production of UK public service media content such as current affairs and high-end drama by shifting advertising revenues and challenging the economics of the production of such content. As I have said already, commercial public sector broadcasters have reduced their investment. The plurality of public service media content provides significant benefits for the UK, provides healthy competition to the BBC and purely commercial content providers, which benefits citizens and consumers. Increased investment will ensure a variety of outlets for the different content produced by the UK independent sector. This competition will drive up the entire market and contribute to making our country a world leader in content and format export. I have not addressed the point about whether Ofcom will investigate every single blog. I doubt it because we have a defined view of the areas that Ofcom would investigate in relation to public service broadcasting. However, I will clarify that in writing because the noble Lord has made an important point. We believe that it is a question of doing two things in these clauses: to recognise the importance of ensuring that we do not have a two-tier Britain, a digital divide, and that we have a truly universal UK infrastructure, while at the same time ensuring that Ofcom does not overlook the importance of services to consumers and addresses the concern expressed by a number of noble Lords. We believe that we have got that balance right. The ability to introduce innovative new media services frequently depends on investment in communications infrastructure. The Government recognise that there is a potential, though by no means automatic, tension between a short-term regulatory goal of reducing prices and a long-term regulatory goal of promoting investment in the resulting innovation. We need to ensure that, even in the face of difficult market conditions, investment in infrastructure and the plurality of media continue. Subsection (2) takes steps to achieve that. I hope that, in the light of that explanation, the noble Lord will feel able to withdraw the amendment and that the Committee as a whole will recognise the importance of ensuring that we truly have an infrastructure for the whole of the UK and healthy public sector content. For that, we need both these clauses.