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DCMS Committee meeting summary, OfCom - 14th March 2023

Updated: Jun 15, 2023

This post summaries the DCMS Select Committee meeting that took place on Tuesday 14th March 2023 which saw Dame Melanie Dawes (MD), Chief Executive of OfCom, giving evidence. You can download a PDF version of this post at the bottom of the page.

 

You can download this summary report here:

230314 DCMS Select Committee evidence session with OfCom Melanie Dawes
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Summary


The Committee started the session by asking about BBC impartiality after a difficult weekend that resulted in a series of HR issues with sports commentator, Gary Lineker. MD noted that it was encouraging to see the BBC now moving on from the difficulties they have been experiencing in recent weeks. MD reiterated that it is important for the BBC to be seen to be impartial so that the public is able to trust their content. MD explained that the BBC’s internal guidelines on the use of social media for staff was a matter for the BBC Board, and not an area that OfCom would comment on.


The committee asked if OfCom believed that the was a material difference between the social media output of ‘news presenters’ and ‘non-news presenters’ at the BBC. MD said that there needed to be “very strict” rules for news presenters, but that it was for the BBC Board to balance those rules to ensure reputation and freedom of expression each new presenter is entitled to. The committee noted that the recent changes the BBC had made to the social media guidelines last year obviously hadn’t achieved the clarity they had hoped for, to which MD agreed.


The committee asked if OfCom had any formal role in dealing with issues like the BBC’s handling of the Linaker affair, and if MD had been in touch with the BBC to discuss the developments. MD confirmed that she had indeed been in touch with the BBC Director Tim Davies over the weekend preceding, but that there was no formal role for OfCom in issues like this because of the way it was set up in 2017 following negotiations between OfCom, the BBC Board and the UK Government; MD was clear that she felt it was right for the BBC Board to be in charge of managing their own organisational reputation.


The committee asked how any of these recent developments would affect the issues of a new licence being worked up for the BBC. MD said she did not feel it would affect the issuing of the new license, and that a new one would be issued “next week” following an extensive consultation. MD explained that the license focusses on how the BBC delivers on their public purposes as set out in the BBC Charter rather and impartiality is not necessarily part of that work.


The committee asked about how the new media landscape which often included reporters and programme anchors with a clear political view (citing LBC which includes Nigel Farage to James O’Brien) had affected the role of Ofcom. MD acknowledged that the news landscape is ever-changing, with social media affecting engagement with news quite markedly too; she explained that a robust exchange of views or expressing a personal opinion did fall within OfCom’s clear Broadcasting Code, but there were rules about making sure a range of views are heard; this would be very particularly important in flagship news programmes, for example the 6 o’clock news.


The committee posed that the political polarisation we see in mainstream media in the US results in people “shouting at each other across a void”, and asked if OfCom had considered whether the UK was moving in that direction. MD explained that we don’t see this polarisation in the same way here in the UK, and that Public Sector Broadcasting has a relatively high degree of trust from public, in part thanks to the work of OfCom. MD shared that OfCom research shows that “if you get your news from social media you are more likely to be less tolerant of other people’s views and not to be able to spot fake news”.


The committee asked if OfCom had the tools it needed to monitor social media platforms and get them to change behaviour to ensure we aren’t creating “echo chambers”. MD said she did not feel that OfCom had the resources it needed in this space, but that it had recently convened a conference with relevant policy stakeholders to line up policy recommendations for next year (2024) which could result in policy changes. The committee asked if the Online Safety Bill could provide an opportunity for legislative changes required sooner. MD explained that the OSB-scope is more orientated towards user-generated services and particular harms, and that issues on social media were more related to news and societal harm, which is potentially much broader and therefore may need a different approach.


The committee proposed that OfCom had been “fairly relaxed” about changes to BBC services, including the BBC News channel merging with BBC World, the new services coming through on BBC Sounds and the “watering down” of local coverage commitments in radio. The committee asked if OfCom was adequately holding the BBC to their commitments to local coverage. MD said that she felt OfCom was holding BBC to account, and the new operation licence (coming next week) will still require two thirds of existing quotas. MD nonetheless acknowledged that the BBC does need to change with the time based on where audiences are engaging and new global players entering the UK market. The Committee asked if OfCom had ever, in fact, intervened on proposals made by the BBC for their changes. MD explained that OfCom looked in detail at the BBC iPlayer proposals and examined the more recent proposals on changes to the local radio stations too. However MD was unable to point to a specific example of where OfCom had stopped specific plans that the BBC had proposed. MD explained that OfCom always looks at the evidence when making decisions. The Committee asked about how OfCom have communicated previous interventions on the BBC with the public. MD explained that OfCom will be publishing letters between of OfCom and the BBC alongside the license next week for example.


The Committee asked if BBC plans to reorganise local radio breaks any of OfCom’s Broadcasting Code. MD confirmed that the plans don’t breach the guidance and broadly agreed with the BBC’s analysis on when audiences were listening (i.e. earlier in the day). MD also stated that OfCom investigated breaking news, local sport and local democratic reporting in “forensic detail” in relation to the changes. MD said that the BBC does face significant budgetary cuts and that changes were being made, though the committee said that the BBC has publicly said changes in their budget had not affecting the decision making, and changes were more about moving people to more online and multimedia related work.


The Committee asked about BBC programming moving from weekly to annual programme in some parts of the country. MD reiterated that two thirds of the quotes will remain in place with the new licence, but where weekly quotas had moved to annual quotas, the decision was made to ensure the BBC’s hours were not too constrained to ensure flexibility in the context of rising costs which would lead to less quality over time. MD said that where quotas were removed, the BBC are being asked to introduce more mechanisms for transparency which will feature in the annual report, for example. MD said that OfCom will be monitoring whether the new programme will provide the coverage that audiences expect, in line with their remit.


The Committee said that if a commercial radio station wanted to shut down a base in an area, they had to ask OfCom first, and asked if the BBC had to do the same. MD explained that it is more about the service that is provided to the listener rather than where the office is based, but that a “closure” that results in a meaningful reduction of service would be something that would come before OfCom for consideration.


The Committee asked about mobile and broadband price rises in the context of a Retail Price Index that stook at 13.4% in January 2023; many people who are buying into mobile and broadband deals are being hit by price rises mid-way through the term. MD explained that OfCom do not regulate retail prices, but that clear information is provided to consumers on what will happen to them – including “upfront” terms and conditions with illustrative cash amounts which must not be buried in the detail. MD explained that OfCom is looking at the rules themselves, including whether it is fair to put the risk on the consumer or should it sit with the provider (e.g. with a clearer price for the first 12 months and second high price in the last 12 months regardless of inflation). MD explained that OfCom does meet with Which? To discuss consumer side needs in this space regularily.


The committee suggested OfCom already has enough to enforce their current rules now, which MD agreed with but explained that improvements to enforcement and reviewing their rules themselves were two separate workstreams. MD also announced that OfCom are looking into social tariffs (which are more targeted) to support people on low incomes, because there is an issue of take-up.


The Committee asked why OfCom had agreed with Openreach’s decision to cut wholesale prices of by 5% which outlets suggest is “exploiting market power”. MD explained that 5 years ago that only 5 or 6% of homes had full fibre and that the regulatory framework set out in March 2021 (the “Access Review”) created condition to allow competition to Openreach as a wholesale provider of fixed networks; in doing so, OfCom made sure that Openreach had flexibility to increase prices on some products but also asked them to open up “ducts and poles” to other network providers. When it comes to pricing, MD explained that every time Openreach want to change their price, they must come to OfCom to agree that e.g., the Equinox deal currently being struck.


The Committee asked why the wholesale price cuts hadn’t been passed on to the consumer. MD explained that the cuts come for new fibre products and that did not cause any concern for OfCom.


The Committee returned to the issue of the BBC’s handling of the Gary Lineker and suggested that this would be a humiliation to the BBC Director General. MD said that it was for the BBC to determine how they find their way through the difficulties; in addition, internal guidelines are for the BBC Board to consider. The Committee suggested that humiliation of BBC managers had undermined confidence from the public in the BBC and knocked the confidence of employees too. MD agreed that the events had been very difficult for the BBC. The Committee asked if the Director General could “survive” the current challenge.MD said she felt that Tim Davies was an “extremely effective” Director General and that the social media guidelines are very difficult to get right – and in particular difficult for the BBC with their clear public obligations to uphold impartiality.


The Committee re-examined the difference in approach between news broadcaster and non-news broadcasters and asked whether those differences should remain in place. MD said that those different standards should remain, but how those distinctions are made from a BBC perspective should be established by the BBC Board. The Committee noted that in normal circumstances, it would be the BBC Board Chair answering questions on these matters in public, but that Richard Sharp was “in hiding”, citing a recent “excoriating” report published by the DCMS Select Committee about him. MD said that OfCom has no formal role in BBC appointments and hoped that the BBC would find a way through.


The Committee asked if OfCom would like to have more of a formal role in issues like these in future. MD answered that OfCom would not like to have oversight of issues related to the BBC’s handling of the situation, which amused Committee members. MD said that OfCom can provide the BBC with advice on how to implement impartiality that is balanced with freedom of expression.


The Committee said that OfCom rules were clear that no politician can be used as an interviewer or reporter on any news programmes except where exceptionally or editorially justified. The Committee pointed to a recent tweet by the official HM Treasury Twitter account that directed followers to the Chancellor’s interviewer Esther McVey MP and Philip Davies MP (two Conservative Party politicians). MD said that it was quite right that politicians and those campaigning to become politicians not present news programmes, but that aside from that they can present on other shows as long as respect to due impartiality is maintained. MD suggested that she may have to get back to the Committee on the detail of the detail of what constitutes “a news programme”. The Committee suggested that they would welcome OfCom getting in touch about it, because this appeared to be an “unambiguous breaching of the rules.” The Committee also cited Nadine Dorries MP interviewing the former Prime Minister Boris Johnson.


The Committee moved on to the cost-of-living crisis, asking about whether BT Openreach’s decision to increase wholesale copper line prices by circa 11% and passing this on to the consumer, despite £357m of profits in last quarter, was justifiable. MD explained that Openreach were operating within current frameworks. The Committee pointed out the rules were implemented when inflation was 1.5%, not the 11.1% we see now and that OfCom could intervene but has chosen not to. MD explained that they had not intervened because they had built a five-year programme with Openreach with prices linked to inflation and that had they intervened it would have had a “chilling effect” on investment. MD also defended Openreach’s “increased costs” but the Committee suggested that this was difficult to see with such large profits. It was clear that the Committee and OfCom took a very different position on what was in the best interests of poorer consumers vs investment in future infrastructure programmes.


The Committee asked if OfCom’s wholesale market review that led to the Openreach investments needed to be reviewed considering current inflation. MD suggested this could have an additional “chilling effect”. The Committee asked what evidence OfCom had to back that up. MD said that the review is now supporting the commercial roll-out, hitting the halfway mark this month ad 80% by the end of next year. MD explained that the rates of return identified in the “Access Review” were important to set the deal for appropriate rates of return over that five-year period. The Committee asked again whether the review had been re-looked at considering the new inflation landscape. MD explained that OfCom are always looking at issues like this. The Committee concluded this part of the questions by stating they were not satisfied by OfCom’s response.


The Committee asked about how OfCom was monitoring digital exclusion given the extreme price hikes we’re seeing. MD explained that OfCom monitor the number of people who don’t have access to the internet at home (down from 10% to 7%), affordability and issues around availability of device (which go beyond OfCom’s actual remit).


The Committee wanted to focus on affordability of device costs and internet services (copper or faster options), citing their role to make sure that “all citizens” irrespective of protected characteristics have access to digital, and asked about what are OfCom doing to help people in difficult financial circumstances. MD explained about OfCom do not have specific powers to intervene on social tariffs, but in 2020 OfCom did convene service providers to explore this issue which has resulted in genuinely affordable deals for consumers that need it (£15 per month for super-fast). MD explained that OfCom had been working with Which? and Citizens Advice with support from UK Government, challenging providers not to have affordable tariffs buried on a website.


The Committee asked if OfCom was monitoring eligibility for social tariffs. MD said OfCom will publish data and reports periodically (next in early May 2024 with the last was October 2023) which is in the public domain, holding the sector to account and support the consumers too. The Committee asked where social tariffs should end (e.g. pensioners, people under a certain income level or welfare support recipients). MD explained that OfCom and UK Government focus has been on benefit recipients, with data available to justify that approach in the OfCom reports. (Note: current social tariffs take up is circa: 3-4% take up). The Committee asked about how OfCom monitors people disconnecting from the internet. MD agreed to come back with more detail on this but said it seemed to be more the case that consumers were dropping television or streaming subscriptions rather than dropping internet connections at this time.


The Committee asked who should be responsible if exclusion rates increase. MD said that the issue requires action by industry and the regulator (pushing for further action and shining a light on what is happening), but something like exclusion is an outcome of several factors. If it’s about subsiding devices then OfCom can’t help with that, but it’s an issue where everyone needs to take accountability.


The Committee returned to the hiring of several high-profile Conservative Party MP’s at GB News and Talk TV; they asked if OfCom would describe that as compatible with a diversity of perspectives. MD explained that it was broadcasters to decide who they hire to their programmes and that it is not for OfCom to determine who is presenting if they fall within the rules. The Committee said that there had been 3,500 complaints to OfCom about impartiality concerns from the public and asked how many had been upheld. MD explained that one complaint had been upheld and that a full response was published. The Committee asked if that was a normal ratio of upholding. MD explained that it depends on the type of programme (e.g. large TV programmes) but would come back to the Committee with more information.


The Committee asked if Talk TV or GM News could be considered Public Sector Broadcasters? MD explained that Talk TV and GB News were not PSBs. The Committee asked why Talk TV was getting prominence slots in the electronic programming guide that is reserved to PSBs, when S4C was not easily able to get it despite being a PSB. MD explained that the licence for the broadcasters still sits within a “local TV” category and as part of the licence they have to programme local broadcasting (circa 35 hours a week) but they do retain overall editorial. The Committee suggested that when Talk TV was set up nobody anticipated that it would become an impartial broadcaster backed by Rupert Murdoch.


The Committee asked the OfCom about what they thought about a (no longer) GB News presenter saying that the GB News Compliance Officers was OfCom’s “bitch”. MD said she would not comment on those comments.


The Committee asked if OfCom had noticed a change in GB News programming. MD acknowledged that GB News have changed their news channel, and that OfCom were waying up whether GB News were upholding the broadcasting rules and enabling freedom of expression.


The Committee suggested that GB News’ propensity to platform audience-grabbing conspiracy theory-type subjects was unhelpful and that OfCom was perhaps being complacent about this. MD said there was a link between broadcasters reaching audiences through programmes and how certain narratives play out on social media. The Committee suggested that it’s perhaps the other way around, with broadcasters programming based on known social-media proliferated issues. MD explained that programming news from a particular perspective is not necessarily out of line of the code if it can be justified in terms of audience expectations and there is balance in the show with an emphasis on freedom of expression to avoid a monocultural presentation of views.


The Committee asked about what OfCom felt about the Chair of the BBC Board keeping his job but Gary Linaker experiencing HR problems. MD explained that OfCom doesn’t play any role in appointments at the BBC and suggested the Committee should ask these questions of the BBC. MD said that it was a concern that consumers didn’t get their usual Sports coverage last weekend which was a problem. The Committee asked if “political noise” had impacted the BBC decision making on this issue. MD explained she could not comment on that.


The Committee asked about BBC coverage of the former Prime Minister Boris Johnson’s decision to bestow a Knighthood on his own farther; there was a statement given to Fiona Bruce to read out on BBC Question Time relating to possible domestic violence involving the farther that appeared to minimise the significance of these claims. MD explained that she wasn’t aware of the incident and wasn’t able to comment but would come back to Committee with one in due course.

The Committee moved on to OfCom’s recommendations related to new intermediaries; UK Government will not be responding until 2024. MD explained that media mergers should be widened to cover digital and newer providers of news, which the UK Government did seem to be interested in. OfCom are now looking at social media and algorithm impacts on how people are accessing news in practice. The Committee asked if OfCom took a position on the BBC licence fee. MD said it was more a matter for UK Government and the BBC. Nonetheless she said that it looked difficult to move away from universal funding models if universal services were expected. MD said that BBC delivers a good service to the country against its remit, including trying to engage with younger audiences. MD said OfCom would want to drive towards greater transparency and accountability for the BBC. The Committee wanted to get OfCom’s view on the Online Safety Bill and what they felt the average user would see when it is implemented. MD acknowledged that it is very difficult to understand how measures of success could be captured by exploring measures of ‘harm’ which can then be compared into the future. MD explained that OfCom will implement age-gates on pornography, specific actions to block child sexual abuse images, co-designing platforms to reduce grooming. Nonetheless, the wider “harm” measure is very difficult to establish. The Committee asked how the “opt-out” user empowerment will work for the average user. MD explained that the user empowerment mechanisms are suggested for Category 1 platforms (Facebook, Twitter and Tik Tok). OfCom will be able to check if inappropriate content is or is not present on platforms. In some cases platform users are able to toggle on/off content filters. The Committee asked if Category 1 platforms are “marking their own homework” and whether OfCom would draw up centralised guidelines. MD explained that OfCom won’t be determining the guidelines, but the regulator will be able audit adherence. MD explained that wider terms of condition related to content that is legal for adults is for platforms to design. The Committee asked if the 2022 Roadmap to Regulation has been disrupted. MD explained that Royal Assent was expected early 2023 but that has now been pushed back. MD explained that OfCom will run consultations on implementation proposals for codes and guidance when the powers are handed over. OfCom will then transparently explain how they considered the representations they have received in the run up. If this process is put through Judicial Review then OfCom won’t be in a position to use those powers, so they are keen to make sure everyone understands what they are doing to ensure a smooth transition to implementation. The Committee asked if there are any foreseen issues that could cause further delays. MD said that UK Government funded OfCom to prepare well in advance of implementation of law and that credit should go to the UK Government for this approach; it had enabled OfCom to do calls for evidence and research alongside parliamentary activity ready for Royal Ascent. The Committee asked if the delay of the Media Bill was making the ITV and Channel 5 licence difficult to issue. MD explained that OfCom recommended to Government that there was a commercial case for a 10-year licence for channels 3 and 5, contingent on the measures in the Media Bill being taken into consideration by all relevant stakeholders. The Committee asked about the recent UK Government announcement that Melanie Dawes would now report in to DCIT and not DCMS and whether the broadcast and media work will now be secondary for OfCom with the digital side taking the focus. MD said unequivocally that OfCom’s work on broadcast and media work will not become secondary. Convergences between the communications industry also means that OfCom will hold that space to cut across the new UK Government departments. MD said she was confident that there would always be interest in what OfCom does around broadcast and media.

 

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