§ 4.17 p.m.
§ Second Reading debate resumed.
§ Lord Aylestone
My Lords, the House is grateful to the noble Baroness, Lady Trumpington, for the detailed and lucid way in which she introduced this Bill. I have known for a long time of her great interest in television, ever since we were discussing some time ago what was then the very beginning of breakfast television.
I was reminded by what the noble Lord, Lord Mishcon, said of the speech made by the noble and learned Lord the Lord Chancellor some years ago. I remember it vividly, because at that time I was opposed to independent television. I voted against it. Not only did I do that, but I was a Whip in the other House and I tried to make sure that everyone else voted against it, too. At this stage perhaps I ought to quote some words which would be better quoted from the Bishops' Bench: that, "joy shall he in heaven" et cetera, et cetera!
We on these Benches support the Bill because it will bring additional channels to television without 505 affecting the four channels we have at the present time. It will bring them to those people who are prepared to pay just a little extra for those channels. The noble Lord, Lord Mishcon, referred to the possible technical aspects of cable television. I agree with him that some of them are, perhaps, a little worrying, and could be a little frightening. But this is a long way off, and I do not think that one ought to write too much into the fact that this Bill will receive detailed consideration during 1984. At the moment, I believe that we should concentrate just on television.
The consortia which are to be licensed for cable television will, we arc told, all be privately financed, rather like the contract holders of independent broadcasting, independent television and independent local radio. In my view they are entitled to a reasonable return for their investment. In fact, it may take a long time before they are able to get that, but they are entitled to it. It did not come immediately with independent television, as the noble Lord, Lord Mishcon, has already reminded us.
We are glad that the Government have decided to adopt a similar (and I say "similar") system of control as with independent television and independent radio, with the setting up of a cable authority to do almost exactly the same kind of work (but not precisely the same) as is being done by the Independent Broadcasting Authority today.
There are many points about this Bill on which I should like to have additional information and clarification, but perhaps they may be left until Committee stage of the Bill, when I understand there will he a period of three days during which we shall have the opportunity of discussing the Bill in detail. Nevertheless, there are one or two points that I ought to put to the Minister at this stage, and to which he may feel like replying when he comes to wind up.
First, I should like an assurance from the Minister that the 11 licensees or franchise holders—whichever one calls them—who will have been set up prior to legislation, and those who are operating cable today, will all come under the control or umbrella of the cable authority. I would ask the noble Lord whether that is likely to happen as soon as the cable authority functions; that is to say, as soon as it has been set up as a result of this Bill.
I would ask whether the cable authority would have the right—I am trying to think of an extreme case, and I think I can—to revoke the licence of any one of those 11 if it were necessary to do so. It may not be, and I hope it will not be, but would the authority have that right? If we do not do this, if the Government's view is that the 11 and the existing cable licence holders are outside the cable authority, then the Government are in a difficult position because they are going to find themselves involved in a day-to-day matter, in control of programmes and many other things in which no Government should ever be involved. So I hope the answer is in the affirmative, and that when the cable authority is set up they will take over.
The Government have always required of the Independent Broadcasting Authority, in respect to franchises for television, and especially independent local radio, that in the first place consultation should take place locally, with the people of the area and with 506 the local authorities. May I ask the noble Lord whether there were any consultations with regard to these 11, or were they just appointed out of the blue? Again, in consulting local opinion, or in requesting the IBA to question public opinion, the Government get an idea of what the feeling is within the locality. If there was nothing of that sort done as far as these 11 are concerned—and I have no idea whether or not that is so—I am afraid it could lead to difficulties later on.
Another point is that as far as independent television and independent local radio are concerned at the moment, we have companies with franchises whose finances are almost all British capital. I say "British" in the widest possible sense, because I know it includes some Canadian in radio and Australian in independent television. So what I am really asking is: is there likely to be any possibility of American investment in British cable companies under the cable authority? Further, is there any American investment in any of the 11 already set up? I know some of these questions are a little unfair to drop on the Minister at this stage, but no doubt he has the answers at his fingertips as usual.
The Bill proposes to restrict the amount of advertising on cable television in the same way as it is restricted on independent television. As has been said, I think, it is six minutes in the case of television, and I think nine minutes for radio, per clock hour. Many may think that this is too much. It is not too much, but anything in addition to it would he difficult to operate. I make this point because under the Bill as now drafted the Secretary of State, on appeal, has the right to change the cable authority's agreed time for advertising. For example, if a cable company found it was not making money, or was losing money, one obvious way of recouping some of the losses would he to have additional advertising time. Under this Bill the Secretary of State would have the right, if he so wished, to grant them additional time. I hope he will never do this, because once he starts he will get into a snowballing situation from which he will find it very difficult to extract himself. That must be left entirely to the cable authority, whether or not we agree to the time fixed.
May I now come briefly to Clause 14, where the Government set out quite a lengthy procedure on complaints—complaints of infringement of privacy and questions of the integrity of people appearing on the programmes. This clause sets out a great deal of detail about this, and it is very important that it should be done: but I cannot understand why they have done it, because we already have the Broadcasting Complaints Commission set up by the Government to do precisely the same work for the BBC and the IBA—set up by statute, quite independent of the BBC or the IBA. Why, then, go to all this trouble of doing something different in Clause 14? Why not let the Broadcasting Complaints Commission do it?
§ Lord Orr-Ewing
My Lords, may I ask the noble Lord whether I am not right in thinking that the Broadcasting Complaints Commission deals with individuals who may feel that they have been wronged—individual complaints, not to do with either balance or distortion, or with any of the other evils that might arise?
§ Lord Aylestone
My Lords, I appreciate the point, but if a company feels it has been wrongly represented I am not sure whether or not the individuals within that company could take the complaint to the commission. I rather think they can. However, my view is that Clause 14 is perhaps unnecessary while we have the Broadcasting Complaints Commission.
I hope the Government will not in any way succumb to any appeal—and they will get them from all sorts of areas and all sorts of people—to write types of individual programmes into the Bill. Again, this is a slippery slope. We know that the programmes are required to entertain, to inform, to educate; there will be religious programmes and educational programmes; but once you begin to go much further than that and write into the Bill the sort of programmes that many people might feel should be in the Bill, then it would be extremely difficult for the cable authority to function. It is of course right that we should always adhere to what is in the charter of the BBC and in the broadcasting Acts with regard to the whole question of good taste and decency, of which we are all aware.
For many years, without any statutory requirement, both the BBC and the IBA have used a self-imposed quota limiting the amount of foreign material which may be televised. This was done to protect British production and to protect thousands of people employed in the industry. We have a great wealth of such people in this country—writers, musicians, actors, song writers and, of course, technicians who work on the other side of the camera. All ought to be protected. This is done by the BBC and the IBA by means of a quota worked out between them all. A figure of 14 per cent. foreign has been mentioned, but I should like to put it the other way and say that we want at least 86 per cent. British. It may be that it will be difficult at the beginning; I accept that. But anyone who has seen a BBC excerpt of the sort of thing appearing on cable in America will be well aware of how important it is to prevent unnecessary material, which can be not only very cheap but also very nasty. I am sure that the cable authority will act responsibly in this field. I would not approve the putting of such a quota into statute. It must be worked out by what one could loosely call both sides of the industry, and I am sure it will be if the cable authority behaves as the Independent Broadcasting Authority always has behaved.
With regard to the final part of the Bill, I was pleased to note the allocation of two direct broadcasting by satellite channels to the Independent Broadcasting Authority. This is in line with the two channels already allocated to the BBC. I understand that immediately this Bill becomes an Act of Parliament and becomes law the IBA will be prepared to go ahead and advertise the contracts for DBS—that is, direct broadcasting by satellite. I hope the BBC are equally prepared to go ahead, but they may have difficulties that the IBA does not have.
I should like to mention just one thing on the technical side which I believe is important to all of us. The European Broadcasting Union has just accepted and endorsed what is known as the MAC system of colour television broadcasting for the whole of Europe in direct broadcasting. I am pleased about that, and I hope that everyone else will be. because it is British. I 508 am also pleased because it is a product of the Independent Broadcasting Authority's engineering department, near Winchester. It is hoped, and possible, that when DBS comes—although it may be set up very quickly it could take three or four years—in addition to the four terrestrial programmes we shall have completely different programmes from the satellite, giving us yet a further choice of programmes.
Finally, we hope and expect that as well as giving us more programmes in addition to the four we already receive—perhaps as many as 20 or more channels in the fullness of time—and what I hope will be very good programmes (a matter for the cable authority), cable television will also provide a great deal of work in the electronics field. When cable television is fully operative, those who are prepared to pay a little more than the current broadcasting licence fee of £46 will be able to receive it. The new cable authority and the holders of the successful cable television licences will have a tremendous job to do. I know that they can do it. We have the technique, the ability and the will. From these Benches we wish them well.
§ 4.32 p.m.
The Lord Bishop of Wakefield
My Lords, I want to start where the noble Lord, Lord Aylestone, finished by giving a general welcome to the provision in the Bill concerning the establishment of this cable authority and to the kind of oversight that it is expected to exercise. Many of us have felt that the role of the authority is of crucial importance and I am very glad that its duties, powers and responsibilities have been so clearly spelled out in the Bill.
One of its key tasks, as has already been mentioned, is to award licences for the prescribed diffusion services. So I am glad that Clause 5 provides for careful local consultation before licences are granted. I hope that when the authority takes steps to encourage comments and suggestions from members of the public it will also alert local community groups, including the churches, to their opportunities to respond so that the authority is able to grasp what it is that the local community requires.
I very much welcome, too, the encouragement in Clause 6 for the provision of programmes which will have local appeal and local participation. Because the company that receives the licence or franchise will enjoy a virtual monopoly in its area. I believe it is very desirable that the cable authority should publicise the applications it receives and the prospectuses that are on offer. This will enable people and community groups to make their comments on them before a final decision is taken. It is desirable, too, that the authority should say why it has given a licence to a particular applicant. Therefore, I hope that the Bill can be strengthened in those respects or some provision made in the guidelines, which the noble Lord, Lord Mishcon, has so wisely asked for, and which the Home Secretary might give to the authority in discharging its responsibilities.
I wonder, too, whether provision should not be made for the authority to have to give prior approval before licence holders may transfer or sell their interests to other bodies. If not, there would seem to be no effective check on local franchises being swallowed 509 up through larger holdings which may not have any immediate local connection. In fact, we could have a position similar to that of the 19th century when the smaller railway companies were swallowed up into the big four.
I am also glad that the authority's duties include, in Clause 9, ensuring good taste and decency in programmes and, in Clause 10, the drawing up of a code concerning violence. In that context I also welcome the inclusion of the clauses concerning obscenity and incitement to racial hatred, because I am sure that this insistence on programme standards will be very widely welcomed. Indeed, it is very important.
Like other noble Lords, I believe the Bill is rather vague in describing the authority's duties in the provision of proper proportions of British and EEC programme material. Many have expressed the fear that a lot of cheap, tired and trivial American programmes could well he dumped on our screens. Of course, in the early stages the cable companies may well be dependent on American material, but despite the assurances given by the noble Baroness in her opening speech I wonder whether there should not be some statutory authority written in for a regular review of the position and to ensure that there is an increasing proportion of British programme material shown by cable companies. I know that we are all very concerned to encourage the development of British skills in programme making and are aware of the tremendous release of energy and initiative that has come as a result of Channel 4. We want to see that initiative continue to develop when cable television gets under way.
There is one other matter concerning the authority's responsibilities which I should like to touch on, and which has already been referred to by the noble Lord, Lord Aylestone, in connection with complaints about unfair treatment. As I read Clause 14 and compared it with Sections 54 and 55 of the Broadcasting Act 1981 I realised how very close they are in describing the functions which the Broadcasting Complaints Commission already discharges. Therefore, I wonder whether it might not be simpler and perhaps wiser for the complaints commission to be the final arbiter in complaints that are put to the cable authority.
When we debated the White Paper in July I ventured to stress the importance of the right choice of the chairman and the part-time members of the authority and that they should be people of wisdom, foresight and standing who would command the respect of the general public. Today, as we receive this Bill and see the very considerable duties and responsibilities that are rightly entrusted to the authority, I believe that this is all the more important. It is essential that the authority should possess a wide range of skills, experience and discernment in its membership. I am very glad that the appointments will be shortly announced and I am also glad to hear from the noble Baroness that the authority will be required to make an annual report to the Home Secretary on the discharge of its functions.
I end by referring to the provisions concerning religious matters. The Bill restricts religious and political bodies from holding a licence and the Government have decided against allowing such 510 groups to have even a limited stake in the ownership of a franchise. However, I am more concerned that churches and religious groups should be involved in the actual provision of programmes. I appreciate that in cable there will be more scope for religiously and politically committed material than we have normally been accustomed to in public service broadcasting. So I think it is a wise provision in Clause 10(3) to guard against undue prominence being given to the views of particular persons and bodies in religious matters. We need a wide spectrum of views and opinions, not just a sectional monopoly. For that reason I believe that the Bill is also right to exclude from being expressed the views and opinions on religious matters of the person providing the service.
Clause 10 enables the authority to give guidance on appeals in programmes for donations. It is of course public knowledge that in the United States there are several large fundamentalist groups which openly seek to be involved in British cable. What is known in the States as the "electronic church" is in large part financed through emotional appeals to viewers in the course of the programmes. I think on these matters that the authority will need to give very careful guidance about appealing in the actual programmes for donations.
Related to that—and I must apologise for not having given him prior warning of this question—I wonder whether, either when he replies to the debate or later, the noble Lord can advise us on the matter of religious advertisements. The Broadcasting Act 1981 prohibits religious or political advertisements. But I notice that in Clause 11(2)(a) of the Bill, while political advertisements are disallowed, religious advertisements are not mentioned, and I wonder whether the noble Lord can tell us whether or not that is a deliberate omission.
Many of us in this House have, I believe, not been overwhelmingly enthusiastic about the advent of cable television programmes. Some have felt that the four channels we already have and the possible satellite channels are really all that we need. Some have feared that the high standards of public service broadcasting which we all enjoy could be damaged or eroded by cable, and that, paradoxically, in the name of widening viewers' choice we could end up by narrowing it only to those who can afford to subscribe to cable.
However, I have felt that some of those dangers are very much lessened by the safeguards in the Bill, and Clause 13, which deals with protected events, is one of the safeguards. But I think that the strongest of all the safeguards lies in the considerable duties and powers that are being entrusted to the cable authority; and much will depend on how these responsibilities are carried out, on the kind of guidelines that the cable authority is given by the Home Secretary, and on who will be appointed to discharge the responsibilities that are entrusted to them.
§ 4.43 p.m.
§ Lord Hanson
My Lords, I welcome the Bill and support the Government's strategy for an enlarged choice of home entertainment, together with the introduction of communications systems which will open up new horizons in our homes. This important 511 subject has already been extensively examined in the Hunt Report, in the White Paper, and in debates in this House and another place. In offering some observations and suggestions, I am conscious that there are in this House many noble Lords with considerable experience in broadcasting and the communications world—as, indeed, we have already heard this afternoon. I should perhaps declare to your Lordships that, though not connected with cable, I am a director of a company which has a minority interest in Yorkshire and Tyne-Tees Television.
This afternoon, with your Lordships' permission, I should like briefly to explore how best to ensure the most practical choice for viewers. The aim is to achieve a modern communications system for business and the home on the shoulders of further TV entertainment, and, as the Bill states, to secure the benefits for the United Kingdom which cable technology can offer.
Providing home interactive facilities incorporating fibre optics will undoubtedly advance our communications technology. It will also offer the prospect of more jobs and opportunities for British industry, and for Britain to be the leader in marketing these products and services in the rest of the world. But, my Lords, let us not be dazzled by visions of unlimited requirements, each catering for a different special home interest. Do we need to set ourselves the task of providing services that the viewer will not require or that companies cannot afford?
There is much experience in the United States and Canada on which to draw. Financial difficulties have beset many whose original hope was to provide the television equivalent of the corner newsagent's shop. Just as the customer can choose from an array ranging from daily newspapers to a variety of special interest magazines, so the dream for cable in the United States of America envisaged scores of channels; but not any more. For America's 33 million cable viewers today, their choice indeed goes much further than our existing programmes, but it has turned out to be much more limited than was predicted or promised. It has concentrated mainly on a handful of programmes with very wide appeal, such as recent films, sport, news, and possibly music.
A recent survey conducted in the United States of America discovered that cable subscribers watched only two more channels than did non-subscribers—a finding of some significance, I believe, when estimating audience needs here. Three of the most ambitious and prestigious cable programme companies in the United States went out of business last year at a cost to them of nearly £100 million. CBS cable, for example, spent lavishly on its programmes, was available to 5 million viewers, and yet was watched regularly by audiences in the tens of thousands only. It lost £35 million in its one year of existence. Furthermore, two of Canada's six channels have closed down because of lack of demand.
That experience in North America will certainly not be lost on the new cable authority, nor on those who are to provide the services. At the same time, it will hardly have escaped attention that cable systems have plenty of other competition to face. The very fact that in this country we have the highest ownership per 512 home in the world of video cassette recorders is not simply evidence that there is a public appetite for further home TV entertainment.
The VCR machine is already a competitor for cable, since at the moment it is installed in 25 per cent. of our homes—a figure which, according to best trade estimates, will go up to 50 per cent. in two years' time. DBS—direct broadcasting satellites—provide more competition. Most European countries will operate their own DBS channels, the programmes of which will be able to be received direct in our homes via suitable dish aerials, which themselves are becoming smaller, cheaper, and more efficient annually. Although four of the United Kingdom's five transponders have been allocated to the BBC and ITV, the BBC, as we all know, is now reconsidering the timing of its own part in the programme.
Turning to other available systems, I would point out that there is a school of thought which believes that signals can be carried inexpensively from building to building by direct line-of-sight laser, which does not even use a broadcast frequency.
Finally, there is MDS—a multipoint distribution system—which is picked up in the home by a small TV aerial and unscrambled by a decoder. MDS can carry eight signals which could provide—and time will certainly tell—all the channels that may prove to be needed. A moment ago I said, "Finally", but I am certainly wrong about that, for, as we speak this afternoon, someone, somewhere, is surely inventing another system, which in five or perhaps 10 years' time will sweep all before it.
Nevertheless we cannot stand still, and so I am glad that the Government are opening the windows to this fascinating new world. My concern, however, is that concentration on the word "cable" shall not exclude other systems. It is my hope that the cable authority will be encouraged, in fact, told, to examine alternative systems and to permit such systems to be installed even if only as pilot schemes. In the past 20 years, the path of broadcast communications has expanded but only into a road. Suddenly, it is about to change into a multi-lane highway with developing technology allowing us to move along those lanes at an ever-increasing pace. That is the note on which I should like to conclude—to have a care before locking ourselves into a single technological solution.
§ 4.51 p.m.
§ Lord Hunt of Tanworth
My Lords, it is my privilege to congratulate the noble Lord, Lord Hanson, on his excellent maiden speech which was, if I may say so, a model of clarity and lucidity. Lord Hanson is known widely for his successful entrepreneurial interests but he also has a wide range of social and cultural interests. I know that we all hope to hear him speaking often in this House.
I am very happy today to welcome the start of this Bill's progress, not just because it largely follows proposals in April's White Paper which, in their turn, largely followed the proposals of the inquiry which I had the honour to chair. I am really glad because today we approach the setting-up of the new cable authority which will have the crucial task of reconciling two things; the encouragement of diversity and innovation 513 in response, particularly, to local demand, on the one hand, and the maintenance of certain standards and the safeguarding of the public interest, on the other. This will not be easy, but it is absolutely vital. My only regret is that the choice of the 11 pilot projects had to be made before the cable authority was in existence, even on a shadow basis, and thus could begin cutting its teeth and also starting the process of public consultation.
It is worth remembering that when my inquiry was taking evidence we listened to two main arguments against the cable authority. The first was what one might call the electronic publishing argument, the argument that a cable system would offer such a wide range of choice that it should be free to put out what it liked provided that it did not break the law of the country on such matters as sedition, obscenity and defamation. We rejected that argument partly because we simply could not conceive that in the early years, at any rate, it would be able to provide the sort of degree of choice that you get in a bookshop and, secondly, because we agreed with the view that most people see the carrying of programmes into their homes as different in kind from the act of going out to buy a book. A book is read alone whereas most television is watched by the family as a whole.
In parenthesis, I was a little sorry to hear the argument about chastity belts and electronic locks again today. As it has been made. I should remind your Lordships that the principal recommendation that we made on decency was that all the cable systems should observe precisely the same requirements as the BBC and the IBA with the single exception of coded subscription channels and films passed for public viewing. However, I accept fully the arguments for rejecting this one relaxation.
The second argument against an authority came from people who said. "Yes, certainly, there must be standards and supervision. We do not take the argument of the electronic bookshop, but you can leave all this to the industry and to self-regulation". In different industries and different professions there are arguments for and against self-regulation. I think that we were convinced that it was simply not possible at a time when a new industry was establishing itself on a local basis, and when there were clearly differing views within the industry itself on what was permissible and what was not. I think that subsequent debate in your Lordships' House and elsewhere has shown that there is now general agreement on the need for an authority.
However, we need to be clear about what kind of body it will be. There is no existing model that fits it, and it should be a very different kind of body from the IBA because, just as cable television should not be allowed to jeopardise public service broadcasting, so it should not attempt to become another branch of it, providing a balanced diet for the country as a whole. It ought, we felt, to provide a supplement to public service broadcasting which some people might want but not represent deprivation if they did not want it. It should cater in particular for local specialised and minority choice. But if it is not to ape public service broadcasting, then it must not be over-regulated.
I see the cable authority as having three main tasks. The first is the award of franchises following really rigorous examination of competing proposals to see 514 whether what is being offered is really likely to come about, to see the rate at which particular areas will be cabled up (not just the rich streets going first and the other areas being left), and to see the intentions regarding the provision of the interactive services and in particular to see what local people want.
Secondly, it must encourage and keep in touch with innovation and respond to developments. All of us are clear that we are moving into a new world and that we cannot really foresee what is going to happen. Mention has already been made of the way in which the IBA responded flexibly to developments in independent television. The cable authority will have to do the same. Thirdly, it will have to act as a watchdog over standards. This does not mean only decency. It also means the operator living up to the performance he promised and providing good programmes, not shoddy programmes.
This does not mean back street driving or breathing down the operator's neck the whole time. It does, however, mean monitoring, combined with sanctions that can actually be used against the bad performer. I do not think that any of this needs a very large staff. Indeed, cable is most likely to develop quickly and successfully in response to genuine local demand if the authority is kept small.
This is not the time for detailed comments on the Bill. I shall therefore confine myself to five very brief points which I should like to put and which I hope will receive consideration later. I must say that when I read Clause 2 I found it very baffling and very opaque. The noble Baroness this afternoon gave us some further elaboration on it. I shall read what she said carefully, but I am not sure that I am all that much clearer about the distinction between diffusion services and prescribed diffusion services, or the need for it. Secondly, Clause 6(2)(e) refers to the authority, when granting licences, to take account of the provision of the interactive services such as tele-banking and tele-shopping with the eventual aim of having most of the country, or certainly the urban areas, capable of receiving and transmitting signals on wide band cable.
I remain a little bothered not only about the division of responsibilities between Ministers, the Home Secretary and the Secretary of State for Industry, which is perhaps inevitable, but also about the division of responsibilities between the authority and Oftel. I hope that paragraph 54 in the White Paper, that is not altogether reflected in the Bill, about the need for close and co-ordinated relations between the authority and Oftel, will come into effect. It is absolutely crucial that an entertainment led cable system results in a subsequent widespread development of the interactive services that can benefit individuals—not just consumers, but students and all types of other people.
Thirdly—and I say this with very great diffidence after listening to the right reverend Prelate who has just spoken—I am a little bothered about what the Bill says as regards religious bodies. It would appear that the Government have modified their position slightly since the publication of the White Paper which, according to my reading, accepted our view that religious bodies should not participate in the ownership of cable systems and should not have their own channels. As I read it—I may be wrong—the draft Bill seems to envisage that they might hold shares in a 515 cable system, although not a controlling interest, and might also have their channels, provided that the authority does not think that it would lead to results which are adverse to the public interest.
Most people would agree with the right reverend Prelate that one of the benefits of cable ought to accrue to the churches, giving them new opportunities to reach people in their homes. In some areas this might mean reaching sizeable communities who share a common faith whether Christian or non-Christian. We were, however, very concerned that the ability of particular small sects to raise large sums of money should not be the determining factor in gaining access to air time or to cable time. As the right reverend Prelate said, there are aspects of the "electronic church" in America which I would not want to see copied here. I may be wrong in thinking that the Bill is drawn more widely than the White Paper, but I do not think that I am wrong.
Clause 11(3) deals with the amount of advertising time to be permitted on cable. This is a matter to which reference has already been made. When I first read this provision it appeared that again it marked a diversion from the White Paper which talked about cable being limited to the same amount of advertising time as independent television, on comparable channels. That is not, I think, what the Bill says. It appears to imply that the IBA would have to be consulted and give their agreement on channels which were not comparable. When the noble Baroness spoke she used the words, "comparable channels" and I hope, therefore, that that is what is meant and what will be included in the Bill. It would seem to me to be inconsistent with how cable should develop if the IBA had a veto on the development of classified advertising or local advertising channels.
Finally. I am a little bothered about the sweeping nature of Clause 15 which seems to say that the authority can give directions to an operator on absolutely anything. If it is read in conjunction with other clauses, like Clauses 11 and 16, then it is understandable. But if the authority were really to exercise the powers provided in Clause 15 it could only do so by exercising close day-to-day supervision of all the operators and regulation of their services, which is not, I think, the intention.
No one can foresee with any degree of certainty the likely demand for cable television. The noble Lord, Lord Hanson, has sounded a warning about this. All I would say is that we do not necessarily have to have what they chose to have in the United States of America, and it does not follow that Gresham's Law will result with the bad driving out the good. Cable should use its multi-channel capability to provide more of an à la carte menu with programmes in which relatively small groups of people may be interested, while catering also for large audiences with amore specialised taste. In other words, it should liberate its audience from the constraints imposed by the programme scheduler.
To enable it to tread the delicate path between liberty and licence will require a quite special kind of oversight—one that subjects prospective operators to a most rigorous examination before franchises are granted, but one which also then stands back and does 516 not interfere on a day-to-day basis unless sanctions are required against an operator who under-performs, in which case those sanctions must be effective. I feel that the Bill goes a very long way to provide such a framework and I welcome it.
Finally, I should like to say that, until there was the long discussion following the Statement on the bomb outside Harrods, I had hoped to be present for the whole of this debate. If I have to leave before the final speeches, I apologise to your Lordships.
§ 5.5 p.m.
§ Lord Jenkins of Putney
My Lords, it is indeed a privilege to follow the noble Lord, Lord Hunt, and also the noble Lord, Lord Hanson, in this debate. However, although it is a privilege, it is a rather daunting one because I suspect that both noble Lords who have spoken before me know, on the one hand, a good deal more about the Bill and, on the other hand, a good deal more about its background than most of us in the Chamber. I rather suspect, too, that if the whole process had stemmed from a "Hanson Committee", rather than from the Hunt Committee, we would have a rather different Bill before us this evening. Therefore, I hope that we shall not only hear further from the noble Lord, Lord Hanson, in general, but I hope also that we shall hear further from him in the later stages of this Bill when we shall all seek to improve it.
I propose to confine myself to a single aspect of the Bill, and I take that course not only because it has been dealt with so admirably by my noble friend who spoke from the Front Bench. As I shall be speaking mainly on a single aspect of the Bill it does not mean that I shall confine myself to that one aspect at the later stages. I hope to take part in endeavours to improve the Bill even as regards Part II, which could be regarded in the long term as more important than Part I and which up to now has received scant attention from all of us and is going to receive scant attention from me at this stage. However, that does not mean that I underestimate the very grave importance of Part II of the Bill and the consequences which could arise from it.
Taking the Bill as a whole, if it were unamended it could be the drop of poison which would make British television as unviewable as its American counterpart, where a choice of 20 different stations means only a choice of 20 different types of tosh. If, in despair in the United States, one turns to their public service network—which can seldom be obtained except in private houses—it is more than likely that one will get a British programme, which is a welcome relief. However, it indicates a line of development which we do not want to go down and which I think the Bill will assist us to go down unless we subject it to substantial amendment.
The reason why British television is different, and I venture to suggest better than most television in the world, is the 86 per cent. British requirement, which means that we have developed our own native television production. That requirement was imposed upon British television by trade union muscle: but in fact the trade unions in this endeavour received very considerable external support. They did not do it all by themselves by a long chalk. Many outside the unions recognised that if they had not succeeded, the British 517 film and television industries would both probably have practically disappeared by now.
It is the 86 per cent. requirement which has maintained a production industry in films and television which has a high reputation throughout the world, which has received awards, and which is earning us very good money in terms of its export potential. So we must be careful that, in going along with technical demands and new developments, we do not throw out the baby with the bathwater. That may not be quite the correct phrase to use, but I am sure that your Lordships know what I am trying to say.
We must be careful that British television does not go the way of the British press which, in large degree, presents mush for the majority and calls it freedom. It is this sewage-type freedom which the Bill stands in danger of presenting to the authority. What is more, it authorises that authority—in my view, without a sufficient degree of safeguard—to pass on the effluent to the British public, which has already acquired a taste for the stuff because of the 14 per cent. already transmitted by the two existing authorities. This 14 per cent. tends to go out at peak times.
Perhaps I am being hard on likening American television to such British newspapers as the Sun—much of it is quite harmless pap; and once in a decade they come up with something really memorable like "The Day After". This had even more impact in the United States than it had here, perhaps because their normal diet of visual mucous, one might call it, is constantly interrupted by even more insulting advertisements, which are apparently used to soften the brains of the American people: "Freedom—what deeds are done in thy name".
If it is conceded that the non-British proportion is to be not more than 14 per cent., why cannot this be negotiated with the authority, as it was in the case of the ITA and the BBC? At the time of the creation of those authorities no statutory requirement was laid down and the question may reasonably be asked: if we could manage without a statutory requirement then and we could rely upon the authority to negotiate a reasonable proportion, why is it that we cannot do that now? I think the reason is that we live at a different time and in different circumstances. The consequence of cable could be very different. To some extent I think that the pass has already been sold, because the guidance note to applicants for licences says:In the early stages applicants may need to draw on a significant amount of ready-made overseas material".Do the Government really believe that if cable gets away with a high percentage of cheap and popular pabulum it will be possible to prevent the other two authorities from doing the same? They would be placed in an extremely difficult position if this stuff proves relatively as popular as the Sun is compared with the Telegraph and The Times, or as the Sun and the Mirror are compared with the Telegraph and The Times, or the Guardian, or whatever example you like—as the popular press is compared with the less popular press.
Therefore, the outcome could be the rapid and complete decline in the quality of British television. In my view there are fields where the market can operate without control and with results beneficial rather than 518 otherwise. I am not one of those who take the view that the market has no place—not at all. For example, I believe that in retail clothing the operation of the market has been beneficial, and one cannot say anything to the contrary. But in the area of the arts and communications, untrammelled freedom can, in spite of what the noble Lord, Lord Hunt, has said, mean a kind of Gresham's law—a Gresham's law of the mind. I believe this to be extremely dangerous. I believe that the had does drive out the good, and the experience in other countries suggests that that is the case. So far as it goes, I think that our own experience also suggests it is the case.
It is necessary at this stage to have a statutory limitation and I hope that your Lordships will reach that conclusion. When I say that the bad drives out the good, I do not mean the pornographically bad—I do not think that that is the danger—I mean the empty, the repetitive, the harmless: the product which aims to please everyone at the cost of meaning nothing much to anyone. This is what we have to fear. Once we embark upon that path, the other two authorities will have the utmost difficulty in not sliding along it as well.
Glossy, technically-efficient "Knots Landing" and "Dallas" types of programmes are all very well in their present proportions, but without a statutory quota we face an unending diet of sub-"Dallas" material and the exclusion of the British programmes which have, as I have said, brought both sales and awards in many countries. The White Paper recognised that when it said:The existence of the quota has contributed to the establishment of a strong domestic production capability within both the BBC and independent television.Unmistakably that is a statement of truth. But it will be impossible to sustain that quota if it is not imposed statutorily on cable from the beginning. For example, Italy now takes 80 per cent. of its television, mostly dubbed, from foreign sources. It has no quota. Without a quota the economics of cable will force British operators into a similar situation. It is not that they will do it because they want to do it; it is because they will find that they have no alternative but gradually to slide along that path. Unless he is statutorily debarred from doing so, the operator will be unable to resist the temptation to stay solvent at all costs. Indeed, it could be argued that it would be his economic duty to do so. That is why I believe that all operators must be on exactly the same statutorily limited basis from the start. If cable cannot function on such a basis, then we should ask ourselves whether cable is worthwhile at all.
In summary, I believe that the authority must be given closer and more detailed statutory responsibilities rather than a looser and less restrictive framework which applies to the existing authorities. My future activities on the Bill will be directed to gain your Lordships' interest in and support for that endeavour.
§ 5.19 p.m.
Earl De La Warr
My Lords, I must start by declaring an interest, in that I am an executive director in one of the consortia that has recently been chosen to discuss with the Government the matters that it is necessary to discuss with a view to concluding a 519 franchise. Noble Lords may note that I have said this somewhat carefully because it is not correct at this moment to say that the franchises have been awarded. I think I should also refer to the fact that, because of my experience over the years, I have been associated with and have been a member of the Cable Television Association, the trade association of the industry, which is soon to be much enlarged, and I am a member of that association today.
I should like to join other noble Lords in congratulating most warmly my noble friend, Lord Hanson, on his first-class speech. He was too modest in what he said about his experience, because it became very clear to us that, on both sides of the Atlantic in the field of broadcasting and other entertainment, he is a man of very considerable knowledge. I was grateful to him for the frank, if not brutal, way in which he drew our attention to the difficulties that many operators were incurring on the other side of the Atlantic. This helped us to put the nature of the risk into some perspective.
I recall that, in the debate on the White Paper, the noble Lord, Lord Winstanley, if he will allow me to quote him, said, among other things:Experts in the City doubt that a return on cable will be seen for at least seven years, maybe not until after 10 years. This pessimism is borne out by the North American experience". [Official Report, 7/7/1983; col. 670.]Therefore, when we discuss this Bill I hope that your Lordships will constantly bear in mind the high risk, long payback, nature of this investment.
We have an unknown market to explore. We have to put the majority of the capital literally underground before we can find the nature of the answers. If by any mischance the answers turn out to be a lemon, then that cable is worth scrap. It is a write-off. That points to the degree of risk which is being incurred by those who are, shall I say, foolhardy enough to embark in the early stages on this great experiment.
The White Paper was an extremely clear document, as was the report produced by the noble Lord. Lord Hunt. Both of them covered the whole ambit of the television industry. I must say, as the noble Lord. Lord Hunt, said, that, unlike the White Paper, this Bill in parts is extremely obscure, particularly in the definitions that appear mainly in Clause 2, although there is another most important one in Clause 5 covering related services. Indeed, there are definitions which your Lordships will need for which you will have to look in another Bill altogether.
I should perhaps tell your Lordships that, in an effort to get some greater understanding of these obscurities, I turned over the weekend to the explanatory notes so kindly produced by the department for our better understanding. I had only to get to the first definition, entitled Cable Programme Service, to find the following line:The activities of sending and conveying are conceptually distinct".At that point I thought that perhaps I should do better to return to the Bill, because the esoteric nature of the explanation was bound to be beyond my limited understanding. Quite seriously, those companies which are going to dig up the roads, lay the cables and put out the programmes must be in a position to 520 understand this Bill fully. Even if they cannot, they must be able to turn to their lawyers to advise them. Already I have found two who tell me that they will find it extremely difficult to do that.
I now come to what I regard as one of the most serious omissions from this Bill, and it stems from the divided control under which this industry is going to have to operate. I suppose that this originated with the Hunt Report, although, from the way that the noble Lord took the point up, he cannot have expected that it would be followed through with such extreme care. Anyhow, followed through it has been. It was made clear in the White Paper that there was to be dual control, but it was not until the Bill was published that we actually saw how dangerous and difficult this could be. For, whereas in the White Paper we were told that the cable operator would be given a franchise for 12 years followed by another eight, we had to look in vain for the licence that would be given to the cable provider because that appears in another Bill and when you turn to that Bill you find nothing more than that the licence shall.continue for such periods as shall be specified".Really an industry in this situation is in for a degree of uncertainty which I do not believe it deserves, and which I do not believe it can afford. I believe very strongly, therefore, that at a later stage in this Bill we shall have to embark on some serious amendments. I believe that the only way to do this is to provide that the cable authority has the power to require the Office of Telecommunications to do certain things in order that they may be able to give a cable company the certainty that it needs in order to embark upon its enterprise.
I would go further than that, and say that the Telecommunications Bill, when it comes, will have to have amendments which are complementary, so that the two work in together. Consultation simply is not enough. There must be a primus inter pares. I must warn that all this is capable of taking up a good deal of your Lordships' time when we come to the Committee.
I should like to refer now to what I regard as a strange provision in the Bill. It is that the cable authority has to consider whether certain types of organisation, if they were shareholders, might be acting adversely to the public interest. I find those that are picked to be a strange choice. We are not talking about the Mafia or the Militant Tendency. We are talking about programme contractors: newspapers: local authorities: those involved in making films: and those involved in other sorts of entertainment. Surely these are just the sort of people we need to play their part in cable consortia, because between them they have much of the knowledge needed in order to make a success of this new industry. At the least, when we come to this clause at another stage, we shall have to explore the nature of public interest, how it is to be adversely affected and the way in which the authority is to set about making its difficult decisions in the course of sticking to the clause.
There are a number of points to do with programming that will have to be explored at later stages of the Bill, but I understand that these are to be dealt with by other speakers. I will not deal with them now because I have limited my time severely. I will 521 deal with just one more subject and that is the length of the licence. In the White Paper we were told that the licence for the cable operator was to be for 12 years. In the Bill we find that the licence is to be for a maximum of 12 years. These two periods are very different. "Twelve years" means 12 years, and "a maximum of 12 years" means from nought to 12 years. I suggest that this is an obscurity which should be removed by the removal of the word "maximum". I shall seek to deal with that at another stage of the Bill.
Finally, there is the length of the licence. In the White Paper there was a reference to the difficulty of establishing exactly when a cable operation was under way. It was suggested that the licence should start from the time the cable operation was actually working. From my own experience, I think it is impossible to say, if one is wiring up a city or an area, when one is actually in business. One is never completely in business, but always extending, first the trunks and then the feeders. I believe it would be better to make the licence longer and to make it run from the day that it is signed. I suggest that the time required in those circumstances is not 12 years but 15 years. I shall return to this at a later stage in the Bill.
I have taken up enough of your Lordships' time. Though I wear two hats, I should like to share what has been said by other noble Lords. I welcome the Bill; I am extremely grateful to the Government for the speed with which they have tackled it and I hope that my noble friend will not think, from any of the suggestions that I have made, that I feel any other way. It is a brave Bill that we must all applaud and no one does so with more enthusiasm than I.
§ 5.34 p.m.
§ Lord Briginshaw
My Lords, my noble friend Lord Mishcon in his usual able way delineated the line that participants in the debate from now on should take about utilisation and rationalisation of time. I propose to be guided. Also I should like, not as a mere formality, to associate myself with the congratulations on the maiden speech made by the noble Lord, Lord Hanson, both for its content and its value. Our all-party Media Group recently listened to representations from the Radio and Television Safeguards Committee. These people were highly qualified and their representations fit into an indication that is emerging from the debate that we should take note of what we do not know rather than what we think we do. We were well guided in preparing ourselves but the questions and answers underlined how much we do not know about the manifold implications of the introduction of cable broadcasting to our country.
It is a great generalisation that broadcasting in this country harbours purveyors of high standards. They are the users of first-class technology and techniques. Nevertheless, the well-known dictum that the public is entitled to higher standards than it wants is acceptable to me because I have experienced in another media certain press proprietors saying, "We stoop low to give our readers what they want". That has an air of irresponsibility and is not acceptable. In these circumstances I felt happy to listen to the representatives before us giving a moderate but sincere set of proposals 522 for parliamentary consideration. To reach the present position we found that the current quota arrangements specified that the proper proportion of British material—this has already emerged in the debate—amounts to 86 per cent. of the material transmitted and assessed over a six-month period. The committee, and myself in particular, saw the danger to Britain's high standards unless cable begins to operate with a quota.
My noble colleague Lord Jenkins of Putney has already mentioned this fact, and it is common sense. The background is that in July 1983 the chairman of the committee on safeguards, Mr. Peter Plouviez, wrote to the Home Secretary. He reminded him that the committee had been established orginally to seek safeguards against what was then, in 1954, seen as a probability that the new commercial companies would use inexpensive imported films and recorded material.
So that I do not abuse your Lordships' time and attention I will use a method of summarising matters which in my view are of moment. The Radio and Television Safeguards Committee, which attended on us, has been in existence for 30 years with a proud and consistent record of successfully compaigning for the retention of higher standards in all forms of British broadcasting. It has done so against the background that it includes 13 separate organisations representing a variety of groups including, as has already been mentioned, writers, composers, musicians, actors, journalists, technicians and sports people.
The prime priority is a quota for cable comparable with BBC and IBA. The publication of the Cable and Broadcasting Bill confirms the fears of representatives that there is a real threat to the present high standards of the material shown on our television screens. Within my earlier general qualifications, I believe that to be true. The Radio and Television Safeguards Committee fought hard and long in order to reach the present position that provides the basis on which a quota will exist. As I have said, in July 1983 the chairman of the committee, Mr. Plouviez, wrote to the Home Secretary. He reminded him that the committee had been established originally to seek safeguards; and that this would avoid much of the importations of inferior material that would weaken the 86 per cent. position of the British industry itself. To me it appeared an over-simplification when the Home Secretary replied:Cable is not to be seen as an extension of broadcasting: it is a different kind of medium which will fulfil a function distinct from broadcasting …That may be so. Nevertheless, it seems to me that insufficient is said in that respect.
Having made these points, the whole basis of the information that we sought was to avoid the real danger of large-scale dumping of old American entertainment progammes which can be bought off the shelf for less than £1,500 an hour. Employment prospects will he crucially affected by these decisions. Therefore, I am hoping that, in view of the material that has already been given in the debate, we shall be led to feel that we should move towards the provision of a quota.
§ 5.43 p.m.
§ Lord Hill of Luton
My Lords, I join other noble Lords in the warmest congratulations to the noble Lord, Lord Hanson, on his maiden speech, particularly as he could bring his own relevant experience to bear on the subject. But, for the rest, I confess I may show a little less enthusiasm than some of your Lordships have shown for the advent of cable. As the noble Baroness was speaking, I could not help recalling that it was at about the beginning of the century that research revealed that messages in sight and sound could be transmitted through the ether and, on that basis, there have been many developments, including sound radio and television. Secondly, with the satellite, we are on the verge of an immense new development in the character, the nature and extent of our broadcasting.
And this is the moment when it is proposed to go back to cable, to dig holes in the ground, possibly to put up new posts! Why? Is it to aid television, to extend its scope, to broaden its character? Not a bit of it! It is to enable the Government to secure from the investor sufficient money for the development of what is delightfully called information technology. We are not considering the advent of a programme intended primarily to extend the scope and improve the character of the existing services. It is a device to produce money from the investor—money which he may well lose. If I myself had any money, I should not invest a penny in cable television. It is, as I say, to enable the money to be found from the external investor.
So, consistent with that attitude, it is of course quite natural for the Government to seek to make it easier for those assuming the responsibility of cable television to get an audience and, therefore, easier to find from advertisements the money they need. That is what we are considering. It is not a television proposal in the ordinary sense but a financial proposal to secure a particular result—other than television—by organising this development. So it is not surprising that conditions arc proposed to be made rather easier for the newcomer, easier than those now applying to the existing service.
There is no provision, for example, for the separation of advertisements from programmes. That leads to advertising programmes, programmes that delude one into believing that they are a normal contribution to one's entertainment, but skilfully embedded in them are advertisements for a particular product. For us to go back to the advertising programme would be a retrograde step. In regard to smaller points, there is the exclusion of political advertising. Very reasonable, too, one may think. But it can be modified at the whim of Government. The responsible Minister can modify or withdraw that rule. Even the greatest and noblest of Ministers is a political animal. I would not trust a Minister of any party to modify the rule on political impartiality. We all know that the statement that coincides with one's own views is marvellously neutral. The statement on the other side of course is wickedly partial.
Then there is the impartiality requirement. Yes, it is there! But for news only—an area which seldom reveals partiality. It is in current affairs that the lack of impartiality is sometimes found. Consider the 524 questioner who, by the nature of his or her question, reveals what his or her own views are. And, not infrequently, it happens both on sound and television. As two noble Lords have already said, there is no requirement for the limitation of imported programmes to 14 per cent.—there is only "a proper proportion". What in Heaven's name is "a proper proportion"?—particularly when, as a Government, you want this broadcasting system to be successful in order that the money may come in for the development of information techniques. And there are others.
I am now going to venture on a little prophecy. I think the cable programmes, naturally and inevitably, will have a very substantial proportion of American material, good or bad. No one can see American television, and indeed no one can study in particular the contributions we now get from American television, without realising that it would be disastrous if there were to be no limitation on imported television, including American television. I will not say more on this subject because the noble Lord, Lord Jenkins of Putney, has elaborated upon it and a reference has been made to it by the noble Lord, Lord Briginshaw.
What is it going to be like? American material is cheap: it has earned its corn in the States and it comes here dirt cheap. What else?—quizzes with money prizes? Yes, that will be a popular line. It might buy up Association Football, other than national matches such as the Cup Final, or national events such as the Derby, and so on. What would be the result of that? This is not going to be a universal service. It is for those in built-up areas who can afford to pay more for the service. I do not believe for one moment that this service is going to be extended to the whole country. It is an appalling thought that our roads and paths are going to be dug up with cables everywhere in order to give this to the occupants of urban areas. It is unlikely that those who live in the countryside will ever get it. There is no profit, but only loss, in extending it to them.
The most important point I want to make is this: triviality succeeds in terms of numbers. It did at the beginning of independent television. They got to over three-quarters of the audience, leaving the BBC, at its worst, with rather less than 25 per cent. Triviality is a number-gatherer, an audience-gatherer; and so, bearing that in mind, what will be the impact on the other services? Perhaps I should say in passing that the press today is seeing the same sort of thing. The Sun newspaper, with an immense circulation, is greatly prosperous. Your Lordships know the theme of the newspaper and you know the kind of thing—the rounded phrase has given place to the rounded figure in drawing an audience.
Good heavens! If we believe that triviality is going to succeed until there is profit, we need to look at independent television. Once they began to make money they sought to acquire the esteem that had hitherto belonged to the BBC—and very good too. If this were going to succeed, then the triviality might die quite early. But is it? Is it going to die, bearing in mind that it is not for everyone and bearing in mind the excellence of existing services? I know it is easy for us to say that our television is the best in the world; but 525 it is, and it would he a tragedy if in order to find money for investing in information techniques in the future the standards of the other two services were in any way depreciated. It could happen.
What if the advertisement income were substantial? There would be a fall in the advertisement income of independent television. None could estimate it, but there would be a fall. After all, it is bearing a very heavy annual burden for the fourth channel. But, if income were substantially affected—I do not like saying this—there would he more triviality returning to independent television to compete for numbers.
The case of the BBC is different. If there were a substantial fall in the audience of the BBC, they would find it much more difficult to get increases in the licence fee that are wholly justified by the circumstances. I am not suggesting they would become more trivial—with the former chairman of the BBC sitting so near, I dare not!—hut it could happen. And to develop a service with the motive of finding money for the laying down of cables and the rest, that is not a proper motive for the development of a television service. There is a very substantial danger that in its early days, when seeking investment and seeking money, the standard of the service as a whole will be lowered.
Your Lordships may ask: what happened with independent television? As soon as they got the money they became conscious of the need for more serious broadcasting. I just do not think that cable is going to find the money. I would ask your Lordships to think of the immense cost of cable. Think of its provision in London—cables down all over London. I do not think it is likely to succeed. The essence of what I am saying is that triviality is the secret of numbers; triviality is bound to be the principal element in the new service, and it could possibly extend to the others.
I think I have spoken for long enough. I have been rather irked by the fact that so many of your Lordships see this as a great new development. It was once said in this House that our wives will be able, through this new information medium, to get in touch with the supermarket and order their foodstuffs. They like shopping. They do not want to have to send a message. But I think I have said enough about that—
§ Lord Mishcon
My Lords, if the noble Lord will allow me to intervene, I think he was quoting something that I said when I in turn was quoting Hunt. I specifically said that I thought these interactive services would be of great benefit, especially to physically handicapped people.
§ Lord Hill of Luton
My Lords, I accept the noble Lord's point. From what has been said today, I see no hope of defeating this Bill. This accommodating attitude that is being shown on all sides of the House suggests that we shall do no more than make some modest amendments.
Your Lordships may think I am a weary, false prophet in this matter. All I can say is that I have had a good deal of experience within the television area and that leads me to suspect that producing a service not for its own sake but in order to find money for activity in a different field is a formula for trouble. I do not think, despite the triviality that is inevitable, that 526 it is ever going to he a paying proposition for the investor, and, if it is not, then triviality will be heaped upon triviality in the hope of enlarging the audience and so the income.
§ 6 p.m.
§ Lord Mottistone
My Lords, I must first apologise in advance for having to leave your Lordships' debate early. I have to celebrate a special event for a nephew which could be said to be a previous engagement arranged some 21 years ago. I should like to congratulate very much my noble friend Lord Hanson, who gave us the benefit of a very specialised knowledge which we even understood. He also had a contribution to make which was not controversial, though perhaps it would not have been agreed to by the noble Lord, Lord Hill of Luton.
With regard to the noble Lord, Lord Hill of Luton, I have to say, in immediately succeeding him in speaking, that I welcome this Bill and, if I dare say it, I thought that his speech was one such as might have been delivered by his late majesty King Canute on an earlier occasion. I really welcome in this Bill the opportunity for further benefits, from the many advances in telecommunications facilities during the past 30 years, to be made available to the whole population at prices which they can afford.
The potentialities are splendid. The potential for vastly increased numbers of entertainment and, more especially, information services, and the capability of providing two-way communications, stand out to me as being particular benefits. I gathered from my noble friend Lady Trumpington on the Front Bench (who delivered somebody else's speech so well that we might have thought it was her own) that she was saying much the same as 1 have just said, and in that respect I agree with the Government. I also believe that there are great possibilities in the alternative systems, to which my noble friend Lord Hanson referred, and I agree strongly with him that there are all kinds of hopes for the future.
I do not think that the rather sad note which the noble Lord, Lord Hill of Luton, cast, seeing it as competition between entertainment channels, is all that we shall get out of cable. Cable will give us many other things and I think we shall be surprised, if we care to read the report of this debate in the next century, at what has come forward in the meantime. I also suggest that a side benefit of a greatly increased choice in services, which is what will be provided—of course, with those services limited in relation to obscenity and matters such as racial hatred—is that people will be less likely to be brainwashed by individual announcements on particular channels. Thus, unlike George Orwell, I see the wider use of telecommunications in 1984 to be a safeguard of individual liberty, rather than a means of restricting it.
However, turning to the Bill I found myself disagreeing, in particular, with the noble Lord, Lord Mishcon. I believe that the Government have taken great care in commissioning studies, including the most important one—and it was not the only one—under the chairmanship of the noble Lord. Lord Hunt of Tanworth, and in issuing a White Paper earlier this year before proceeding with the Bill. I do 527 not think it is a rushed Bill, as the noble Lord, Lord Mishcon, said. The Government have taken almost too much trouble, and maybe have confused themselves in the process. That is the only point which I had to take up with the noble Lord, and I thank him for listening.
However, I find that there are many features of the Bill which I shall want to question and there are several which really ought to be amended. Many of these are very detailed and technical and, though I know it is helpful to Governments at this stage to get an idea of what they might be, I would not want to detain your Lordships by going through them.
There are just two main points which deserve brief mention, and I am not the first to mention one of them. First, there are the inter-relationships between the cable authority and the new Office of Telecommunications which is being established under this Bill's stable companion, the Telecommunications Bill. I was delighted to hear the noble Lord, Lord Hunt of Tanworth, expressing similar reservations. The granting of a licence to a cable operator under the Telecommunications Bill, and the granting of one to a programme provider under this Bill, are interdependent and must be properly co-ordinated. In the Bill at the moment, I do not believe that the arrangements for such co-ordination are good enough and my noble friend Lord De La Warr has already emphasised this point.
To digress briefly, a moment ago I referred to this Bill and the Telecommunications Bill being stable companions, and they are in the sense that they both have the same owner—the Government. However, sadly they are under different trainers. Though I appreciate that changes cannot be made quickly and that this Bill is not an appropriate vehicle for such a change, I believe that the multiplicity of civil departments and subordinate authorities, established to supervise the presentation to the public of the great opportunities of telecommunications, can only hamper the effectiveness of that presentation.
There really is a need at some later date for the Government to review this whole scene and to simplify it greatly, with the minimum number of departments and subordinate authorities supervising telecommunications, especially the technical side. For example, it is ridiculous that the Home Office retains authority for civil frequency allocation, which is clearly a technical matter and better handled by people with a greater technical knowledge.
The second main point on which I believe the Bill to be deficient—even though I listened very carefully to my noble friend Lady Trumpington, I still feel it to be deficient—is the apparent lack of a provision in Clause 2, and in particular in subsection (1), covering a commercial application of this potentially splendid new communications facility. I hope very much that we shall be able to include such a provision during the passage of the Bill through this House, unless my noble friend on the Front Bench can show me that it is already there.
Finally, I am sure the Government are aware that the Committee and later stages of this Bill are likely to be lengthy ones and probably longer than, for 528 example, those of the Data Protection Bill—and I am addressing my remarks to the Deputy Chief Whip. For that reason it is particularly unfortunate that fate has brought together this Bill and the Telecommunication Bill at the same time, because some of us are involved in both. However, I hope that this Bill gets a fair wind and, in principle, I wish it very well indeed. In conclusion, I apologise deeply to my noble friend Lord Elton for not remaining for his speech, and indeed to any other noble Lords for whose speeches I am unable to stay.
§ 6.9 p.m.
§ Lord Orr-Ewing
My Lords, I welcome this Bill. It seems to me that it is realistic to plan for cable and not to allow Western Europe to go its own way, as it has been doing for many years, as have the USA, Canada and other countries. We, who are the pioneers of television, should be involved in it and I am glad that the Government have brought forward this Bill. It seems to me that in this country there have been three phases of television. There was the first phase from 1936, when I joined the BBC television service, until 1954. There was a rather big interruption for most of us in the middle of that period, when there was a BBC black and white monopoly.
Then there was the second phase from the breaking of the monopoly. The introduction of the ITA was fought, as the noble Lord, Lord Mishcon, said in his opening speech, most vigorously in this House by the present Lord Chancellor. I disagreed with him. I remember listening to all those speeches. I think that the lesson of that was not that he was wrong (which he was, in the event) but that we found a typically British compromise which has worked out extremely well. Everything that he forecast about lowering the standards and how hopeless it was going to be—and we had films of Fred J. Muggs shown during the Coronation broadasts in the USA. which were brought back here and shown to everybody as typical of what would happen—has not happened. In the event, nothing of the kind happened. We reached a compromise and we shall reach another compromise, provided that in both this Bill and in subsequent legislation we adopt a flexible approach. We are not perfectly wise; we shall not foresee some of the technological developments and we shall have to come back to this problem. Therefore I plead for flexibility of approach and for cable not to be tied down too greatly.
I am glad that the Government have followed the recommendations of the admirable Hunt Report. It is right that there should be a separate cable authority and not the IBA. It is a different and in some ways a competitive area. Therefore it is much better that it should have a separate governing body. I regret that there are so many rules about who should participate. I hope that initially cable will prosper on loyalty to local interests. The access programmes will bring that about. The Bill provides that local newspapers are not to be allowed to become shareholders. This is to be regretted because it is too restrictive. However, I accept what is contained in the Bill.
I was a little surprised to see that of the first 11 franchises to be granted. British Telecom will have five. It is a very substantial holding. They will provide 529 the cable; sometimes they will sell it; but it is more than likely that they will invest. Noble Lords on this side of the House and opposite will recall that the target of cabling 100,000 houses will cost about £30 million. If British Telecom are to cable those five, it represents an investment of £150 million. I should have thought that British Telecom had other fish to fry. I should like British Telecom to modernise the public sector telephone network and to provide some of the services which are so admirably provided in the United States before they invest in this way. It is their decision, but it is a very substantial decision.
I turn next to the code relating to advertising which is dealt with in Clause 11.I wonder whether or not we are tying ourselves a little too much to the IBA. The IBA will have to be consulted. There are other respectable and admirably founded advertising bodies. The Advertising Standards Association, the ISBA and the Advertising Association all have a long history of controlling advertisements, both in taste and in content. I cannot see why the IBA should be the only body to be consulted. The Bill details just one body, and one sees who has been left out. I should have thought that it would be wiser for the established advertising authorities to be consulted about setting up the code instead of it being tied to one body.
According to the Bill, the companies should he allowed to advertise, but for no longer than the average for the IBA, which is currently six minutes in each hour. Why not? If it is thought that the traffic will bear more advertising and that it will help to improve the standard of programmes, because more can be paid for performances, and if people are willing to accept seven or eight minutes, that is the judgment of the cable operating company to which they ought to be entitled. It is not the task of Government to lay down exactly how many minutes in every hour companies should be allowed to advertise. If people do not like the advertisements they can switch off and they will not renew their subscription. There are four broadcasting channels and there is to be a DBS channel as well. I do not believe that a responsible and economically viable cable operating company would exceed the time allowed. It would probably keep to six minutes in every hour, but I do not believe that we have the right to tie it down.
Moreover, if we forbid some of the advertising provided for in the Bill, pure advertising on one channel might be ruled out completely, which would be a pity. One knows that there is a customer desire to take advertising magazines, many of which are beautifully printed. I read some of them, and occasionally I read advertising newspapers. I do not intend to refer to the one in Warrington. But they prosper. I see no reason why advertising should not appear on one of the channels. If people look at it, a service is being performed. Lord Hunt said in his report that he thought it would be unwise to put a time limit on advertising.
May I turn next to protected events, which are dealt with in Clause 13. The clause is in a mess at the moment. I hope my noble friend will have a look at it before the Committee stage and that the Government will take the initiative in amending it. Noble Lords will remember that when ITV was set up the following six protected events were written into the first charter: the 530 Cup Final, the Grand National, the Derby, the Boat Race (if this were a modern list I doubt whether it would include the Boat Race), Test Matches and Wimbledon. The existing broadcasting authorities have the first peck at those events. If they do not want to take them, they can be picked up by others.
The question of exclusiveness also arises. The BBC have had a five-year exclusive agreement in this country for the televising of Wimbledon, and very well have they performed that task. I am not criticising the BBC. But if they are covering a Centre Court semifinal, what is to stop cable bidding for the other semifinal on Court No. 1 or Court No. 2? The Wimbledon authorities do exactly that. They sell to the NBC in the United States and to the cable companies in the United States television coverage which is not necessarily shown here. This is highly rewarding financially. I would remind noble Lords that it is rewarding not just to Wimbledon; £2 million was handed last year to the Lawn Tennis Association. It went towards founding clubs, and helping with the coaching of our youngsters, which eventually will mean, I hope, that we get back into the Davis Cup at the top end rather than lower down.
The money from television coverage goes hack into the sport and the money from cable will also go hack into the sport, whether it be rugby football, or football or rowing. Therefore one has to ask why there should be a list of six sacrosanct events, which means that you are depriving the organisers of the sport of the right to negotiate. Surely cable ought not to be excluded. Overseas companies might be interested in watching promising youngsters from their own countries playing at Wimbledon on a court which is not being covered by the BBC. It is too inflexible at the moment and I hope that my noble friend will look at this point.
Finally, I hope that the Government do not bend to the desire which has been expressed in one or two parts of your Lordships' House about fixing a firm limit of 14 per cent. of products from foreign sources. It would be unwise initially. The Olympic Games are to be held next summer in the United States. Would all those events count as foreign products? Would one have to say that the 14 per cent. limit could not be exceeded? What happens about Test Matches from Australia? Are they foreign? What happens to all foreign programmes? It might be films only. One hopes that in due course, cable will certainly be a stimulus to our own film industry, which is showing signs of revival—and I believe that cable will further help that process. Provided that the trade unions accept new technology and do not go for the over-manning that is a feature of Fleet Street, then I hope we shall see a considerable increase in the film industry in this country. That will be of tremendous importance not only to our own cable companies but also for exports all over the world.
I should like to reiterate that I support this Bill. In some ways, it is too inflexible and I hope that before we come to the Committee stage the Government will consider most sympathetically whether we are wise to tie down cable too much. Finally, I would say that I so much agree with the admirable maiden speech of the noble Lord, Lord Hanson, and even with some of the comments made by the noble Lord, Lord Hill of Luton. I myself am not sure that there will be 30 531 prosperous cable channels, but I certainly believe that there will be four or five extra channels and that people will make money from those—but I would not invest too heavily in any greater number than that.
§ 6.21 p.m.
The Earl of Halsbury
My Lords, there will come a time when we shall look back at this Bill as an historic Bill marking an historic first step. The charter of the BBC in 1925 was an historic first step, but it was not the last step. It was succeeded by many charters; and this Bill will undoubtedly be succeeded by many Bills as we gain experience of working a new facility and exploiting a novelty.
I have no doubt that we shall have many ding-dong battles in Committee between the various different lobbies who will raise their voices in this House. I must say that I have no commercial interest to declare in any of them. The only lobby in which I am interested is that which endeavours to emphasise and preserve the cultural values of our society and standards of good behaviour as opposed to attenuating them and allowing them to deteriorate.
From that point of view, I find myself in some sympathy with a number of the remarks made by the noble Lord, Lord Jenkins of Putney. I agree with him entirely that if all we shall get is more trash then, clearly, we do not want it. But it is wrong to try to stifle the birth of the future just because you cannot see the shape of things too clearly through the fog. I believe that that attitude is a mistake. The important thing with any novelty is to face up to the difficulties as they come along; confront them, do not funk them. Do not take counsel of your fears, above all things.
This Bill takes me back to nearly a quarter of a century ago when, as I reminded your Lordships last Thursday. I was a governor of the BBC. According to an account in The Times this morning, I was one of the less distinguished members. However, hard words break no bones and I shall not pursue that point! The colleague whom I remember most clearly in those days was Mrs. Cazalet-Keir, better known to those with long Parliamentary memories as Thelma Cazalet, MP. She and I fought many honest battles together, shoulder to shoulder. One of them was to persuade the BBC to take an attitude of enlightened patronage to what was then being called subscription television or pay-as-you-view TV, which was being tried out on a small scale by a little syndicate. I thought our attitude towards that exercise ought to be helpful and I wanted to take a small share in the enterprise; to share the inevitable losses with them and to gain experience as we went along.
I remember how I used to advise my colleagues on the board and the director general in these words. I said: "Remember the advice which Gamaliel gave to the Sanhedrin: 'If this thing is of man it will fail. But if it is of God, you cannot withstand it'. I believe this is really the shape of things to come in the future. Do not fight it. If you can't beat it, join it. But don't join it on such a crippling scale that you lose too much money in the early stages". It is always a mistake to over-invest in a novelty before one can see some of the difficulties.
532 I have no doubt in my own mind about the vision I had of the future. I was then deeply involved in the pioneering phases of lasers and fibre optics. I could see the future quite clearly for cables and telecommunications. I doubt whether Thelma Cazalet saw it as clearly as I did, but between us we fought the same battle against the BBC bureaucracy, which would not touch it with a bargepole. They were blackly hostile to the whole concept as a threat to their own existence—the bureaucratic attitude I was denouncing last Thursday.
If one goes into a modern, Californian-style house, one drives up to the garage door, presses a button and then a sonic signal opens the garage door. One drives in and shuts the garage door by pressing another button. Then one steps out of the car, through a door, and one is in the hall of one's own house. That is the standard style of house built elsewhere. It is built around the garage because the automobile is an essential part of modern living. I visualise that at some time in the future, every new house will have some kind of electronics room built into it. If one is an engineer, then one will have an electronic drawing board with its light pencil. One may indeed communicate, as the noble Lord. Lord Mishcon, said, with the department store or whoever it may be, ordering up the weekly vegetables and so on—a great help to the handicapped. Such an arrangement will doubtless be duplicated in the living room in the form of a cathode ray tube for your television set. But there is no doubt in my own mind that an electronics room in every house is something that will come about.
With regard to this Bill as the first step in that process, I wish to take up two points. First. there is the wishy-washy command structure sketched in Schedule 1. A command structure involves a partnership between two people who have quite a different view entirely of time. It is the difference between decision and execution; between policy formation and implementation. There is the chief executive's/ chairman's/commander-in-chief's strategic view for which he must have time to sit and think and plan, and the field-commander's/chief-of-staffs/ managing-director's duty is to carry our those plans and policies. Whereas a managing director is always short of time, for the chairman and policy-maker there must be time in hand to sit and think.
This Bill merely provides for a chairman without telling us what he is going to do, and for a deputy chairman. They have the power between them to appoint a secretary. Here I am repeating what was said by the noble Lord, Lord Mishcon, when I ask: will he be a full-time chairman or a part-time chairman? Will he be an executive chairman? Will his deputy be next in line as his successor, or merely somebody who takes the chair in the chairman's absence? Will the deputy in effect be the managing director while the chairman is the policy-maker? Will they appoint a chief executive of their own? Will he be a long-term career appointment while they are short-term, ministerial appointments, so that the situation which I sketched out to your Lordships last Thursday emerges—in which, after a few generations of members have gone by, the long-term chief executive has everything in his own hands and his colleagues have no more control over him than a clutch of mice have over a cat?
533 Where is the command structure sketched out? What are the duties of the secretary? Will he be just the servant of the members and their conscience—that is to say, a person who advises them permanently on whether what they propose is or is not intro or ultra vires? Or will he be a secretary-general and the equivalent of a chief executive? None of these aspects is sketched out in the Bill. If we pass Schedule 1 in its present form, everything then lies in the hands of the Minister without there being any parliamentary control. That would not be so bad if Ministers were any good at creating command structures for quangos, but all the evidence I have shows that they are not very good at creating command structures for quangos—and this is just another quango. When the noble Lord the Minister replies, I hope that he will be a good deal more explicit in respect of the hoard structure he is proposing.
The second point I wish to raise concerns the preservation of standards by the control of obscenity, violence and so on. If your Lordships will read Sections 24, 25 and 26 of the Bill, you will then perhaps go to Statutes at Large and examine the Obscene Publications Act 1959. But I would advise your Lordships not to do that because it was amended by the Obscene Publications Act 1964, which was subsequently amended by the Criminal Law Act 1977. You will find it, not in Statutes at Large, but in Statutes in Force, and, if you then do what I have done and produce a filled-in version of what the future legislation on this subject will be, you will not come to any better conclusion than I do with all the scissors and papers and glue folded away: "a poor thing but our own". We call it the Obscene Publications Act; it ought to be called the pornographers' charter of freedom. The whole thing is based on a misconception. I am not going to go into this in detail. The noble Lord, Lord Elton, last Thursday told us that his right honourable and learned friend is taking the law on obscenity into consideration. All I can say is that if he comes up with anything, that will have to be the first amendment to this Bill we are considering.
The other thing it provides for is control of obscenity by codes and standards and public acceptability. That is another bruised reed, because nobody knows what the public accepts or does not accept. It probably accepts whatever it gets; it can switch the set off, it can switch the sound off, it can leave the room, it can send the children out of the room. There is no way of finding out. Quite clearly the standards that are produced now offend very many serious-minded people very much indeed. I do not accept the complacency with which the bureaucracy justify whatever they put in front of us.
There goes my ten minutes, my Lords; thank you very much.
§ 6.32 p.m.
§ Baroness Carnegy of Lour
My Lords, I want to say a word, if I may, about cable programmes and certain important aspects of the subject—what it seems likely the customer will want from cable and whether the Bill is an adequate framework to ensure that he gets what he wants. If he does not get what he wants the whole enterprise will clearly fail. Ever since the debate on this 534 subject began in Britain it has been recognised that cable will make it possible greatly to widen choice of entertainment, but there will be what has been referred to as "more of the same", and what some fear will turn out to be more of the worst of the same.
It is also becoming increasingly clear that cable has enormous potential for meeting different, more urgent and subtler needs, the needs of millions of people who find themselves with more leisure time than ever before because of shorter working hours, unemployment, or longer life after retiring age. Those needs are by no means adequately met simply by passive film watching, and we greatly underestimate the human condition if we believe they are.
As work patterns change and we tend to live longer probably the most exciting and potentially fruitful aspect of cable, from everybody's point of view, is its capacity to involve people in a variety of spare time activities in a manner that is not possible by way of the wider network and one-way communication of broadcasting, and indeed is not so far possible in any other way.
We know from broadcasting that there is great enthusiasm for programmes which encourage and give ideas for active pursuits like gardening, cooking, bird watching, camping, boating, keeping fit. We also know that locally based broadcasting, local radio talk-ins, local information services, local news-spots have a big following. When on a limited scale it has been possible for local groups to broadcast about their activities such programmes have mostly been popular.
What is needed now is a cost-effective way for voluntary organisations and other community groups to communicate locally with people beyond their own membership and thus involve far greater numbers in participating in new interests, activities, sports, service for others, educational interests, fulfilling activity for hours not spent in paid employment. In practice that can best be done by cable operators offering access to such groups on terms which the groups can accept and respond to. This is, of course, anticipated in Clause 6 of the Bill, where the critieria for being granted a licence include the extent of plans to provide programmes of educational value catering to local tastes, programmes in which people can participate and programmes for which related services will also be provided.
But is Clause 6 as it stands an adequate description of what has to happen if there is to be large active customer involvement in the cable scene? What is required, surely, is that a cable company says to the local branch of the playgroup movement or of Age Concern, or some other local voluntary group, something like this: "Look, you have an idea for a programme which will interest other local people in your particular activity and will get feedback from them. You get together yourselves and work a programme up. If you want advice, ask us. When you have your ideas sorted out come along to us and we will put our studio and its manager, our camera and sound people, at your disposal and they will help you make the programme. You will not pay us anything and we will not pay you anything. It may be that when you have done this a few times you will develop some of the expertise among yourselves. If so, we shall be delighted. In the meantime we are at your disposal."
535 For this to happen the best means is probably provision by the company of a two-way community access channel. In the United States of America community access works best. I understand, where there are specific channels for the purpose. At Fort Lauderdale in California, for example, there are two access channels, one for voluntary organisations and one for statutory, and that works very well. In this country the pilot project at Greenwich began with a community access channel and developed from there.
I understand why the Government believe that cable is most likely to succeed if it is not over-regulated, but the Government see the need for safeguards—some of them have been referred to—under Clause 7. Must there not also be a stronger and clearer statement in Clause 6 that licences will he granted only if there are adequate arrangements. which should even perhaps be quantified, for access by voluntary organisations and community groups, with the necessary facilities and help provided at no cost to the group. Must there not be insistence that the cable laid is capable of taking this two-way communication? Would it not also he essential—and this is an important point—that at least one member of the authority itself, as described in Clause 1, should be a person with experience and understanding of voluntary organisations and of the relevant sort of participatory activity and learning?
I could go into this area in greater detail but at this stage I would only want to put down a marker and to ask my noble friend the Minister whether he will make sure that the Government pay great attention to representations made to them recently by concerned voluntary organisations which, I believe, share roughly this point of view.
Cable, even at the outset, is not just an opportunity for business people and the entertainment industry. It is not just a job creator. It is an opportunity for a revolution of the way we use our leisure and the way we find work activity which is not employment. We must ensure that the framework provided by the legislation maximises the chances of this happening successfully.
§ 6.40 p.m.
§ Lord McIntosh of Haringey
My Lords. I confess I find myself much more in sympathy with the noble Lord, Lord Hill of Luton, than with any other speaker I have heard today, because I believe that the Government are coming forward with an irrelevant Bill at a particularly unfortunate and irrelevant time. In the time available to me I want to show first, that cable is a small part of broadcasting, and will be a small part of broadcasting rather than a major part, and, secondly, that broadcasting will be a small part of cable. That is not as tautologous as at first it might appear.
My introduction to cable and satellite came a number of years ago when I was a consultant to the Federation of Rocky Mountain States, based in Denver, where they were going in for cable access to parts of that difficult terrain, stretching from Idaho down to Arizona where ordinary television was not available. They were trying to test, first, the technical side of getting the dishes available on the roofs of schools, community centres, and so on; and, secondly, 536 the kind of programmes acceptable to those isolated communities. This was thought to be a viable proposition in spite of the fact that cabling had already come to Denver. Anyone who knows Denver, Colorado, will know that it sits at the foot of the escarpment of the Rocky Mountains and is particularly favourable for normal transmission methods but is surrounded by this huge territory which is not so favourable.
The experiment of the satellite technology was almost entirely a failure because it was based on a total misconception about the relative importance and role of traditional television, of cable and of satellite. It was no less a failure because it preceded the growth, which we have seen in this country, of video cassette recorders which make a huge difference to the market potential of both cable and satellite.
Have the Government actually looked seriously at the existing experiments in pay television which have been going on for a number of years? In those experiments, which were presumably carried out in favourable areas, what we have is pay television reaching 18 per cent. of the homes which actually subscribe to the cable and only 6 per cent. of the homes passed by the cable. That is not a very encouraging invitation for anyone who wants to invest. That is where I entirely agree with the noble Lord, Lord Hill, who said he would not put a penny into cable. Neither would I. The test market that we have had so far supports our views rather than the views of those who look more favourably on cable.
Let us look at the experience of cabling in other countries. It is not, as some people might think, that the most developed countries have the highest percentage of cabling. By no means is that so. Belgium has75 per cent. of cable and The Netherlands has 60 per cent., hut both countries have cable as an intrinsic part of the public service network. with very heavy public and, indeed, local authority involvement. I believe Canada has 60 per cent. cable. However, that is because of its peculiar terrain where people are generally concentrated on the 48th parallel, a long way from each other and where traditional transmission is expensive, but they are fairly concentrated in urban areas. In those circumstances, which are quite different from the geography of this country, cable appears to be viable. Even so, it is worth noting that the arts Channel "C" in Canada has recently gone bankrupt.
On the other hand, the United States, which everyone looks on as either a dreaded or admired example of what is to happen here, has only 33 per cent. cable. That should give a potential investor cause to think about the commercial possibilities.
Let us consider the possibility of increasing the market size for broadcasting. I wonder how far noble Lords think the extension of broadcasting will go in terms of sheer quantity; the number of hours watched per day. Britain is already the highest in Europe with three hours ten minutes of television viewing per person per day. The highest in the world is the United States with four hours per day. That figure has been static for a number of years. Indeed, it is starting to show indications of a decline. Therefore, at the most we have the possibility of a 30 per cent. increase in viewing. Clearly, with a greater choice the amount of money available for broadcasting will be spread more thinly.
537 The other aspect that investors in cable should consider is the growth of VCR. Britain has one of the highest penetrations of VCR. The figure was 22 per cent. in April of this year and probably 27 per cent. for December 1983. Most informed forecasts suggest it could he 50 per cent. by 1988. Taking the combination of direct broadcasting satellite and VCR availability, if one wants to make a forecast of what home viewing of broadcasting is likely to be by, say, 1990, my forecast would show the complete irrelevance of cable. What we are likely to have is direct broadcasting satellite available and financially worthwhile for, perhaps, six hours a day and for the rest of the day, up to 18 hours, there could be time shift using VCRs readily available at a cost of possibly £1,500 per hour at 1983 prices. It would be something of that nature and anyway quite different from the kind of cost involved in original cable broadcasting and original use of all the channels which are, in theory, available.
I think that we may land up at the end of this decade not with a heavily cabled country at all, but 50 per cent. of households with VCRs, 10 per cent. with cable and perhaps 1 per cent. with direct satellite, using the smaller dishes likely to be available at that time.
The second point on which I wish to argue is that broadcasting is a small part of cable. The Government's argument appears to be that cabling will be entertainment led; in other words, the broadcasting element of cable will be the part which encourages investment from the private sector. That in the Government's and particularly the Prime Minister's view will he of enormous benefit to us. The noble Lord, Lord Hill, has already adequately debunked the investment argument, and the only thing I would say about the contribution from the noble Lord, Lord Hunt of Tanworth, is that, through no fault of his, his committee was actually debarred from considering the technological aspects of cable as opposed to the broadcasting side. It was suggested to him that cable was to be viewed as a part of broadcasting, whereas I believe it can be shown that cable is not an important part of broadcasting, nor broadcasting an important part of cable.
It is certainly true that there are other good reasons, apart from broadcasting reasons, for considering the wider provision of cable. Reference has been made already to the issue of tele-marketing, tele-banking, financial services, and so on. I believe that a much more relevant analogy is the opportunity that exists through office automation. In five years' time there will he very few offices which do not have a universal terminal access for data processing, for electronic mail and message switching and for text preparation in one form or another. I suggest that in five years' time from then the same will be true for homes; people at work, students, people engaged in lifelong education, and so on, will be wanting to make much greater use of the leisure that will be available to them. Sometimes, of course, it will be enforced leisure. So on that basis there are certainly economic justifications for cabling. There is no justification for pretending that cabling can come to a significant number of people on the basis of the profits to be made from entertainment-led cabling; and that is the fallacy in the Government's argument.
Where does that lead me? It leads me to think that 538 we must make a much greater separation between the actual exercise of cabling and the question of the provision of programming—programming itself being a subset of software. So far as cabling is concerned. unless we can be convinced that there will be an economic case for investment in widespread cabling for entertainment purposes, the only alternative must be a Government investment, a public project, with the purpose of providing not just greater choice in broadcasting, but also the opportunity for interactive communication between homes, just as there has to be between businesses.
It is a difficult argument to put. I suspect that it is not economically justifiable in the next year or possibly not even in the next five years. I am not now suggesting that the Government should invest in the £3,000 million programme that will probably be involved in a basic cabling network. But the alternatives do not stand up to argument, and it may be better for the Government to take back the Bill, to swallow both their pride and the difficulty that they will have in appearing to deny people the choice of using a higher degree of information technology, and instead to say, "Let's come back to it in a few years' time when we shall know more clearly what are the alternative technology developments".
The corollary of that is that when we come to the stage of looking at the programming, at what will actually appear from using cable, satellite, or whatever method then comes to the surface in the battle, we must he as liberal, as unauthoritarian, and as non-regulatory as we can possibly be. To that extent there are valuable parts in the Bill which would be useful in 1988 when the Government could, and should, reintroduce it.
§ 6.52 p.m.
§ The Duke of Portland
My Lords, I venture to address your Lordships since for some years I was a director of British Relay Wireless, one of the first cable television companies. There is no doubt that our television is far superior to that in any other country, and it is imperative that we maintain our superiority. Thus we cannot afford to delay the development of cable television. The same consideration applies to fibre optics.
In another place preference has been expressed by the Opposition for a national cable television system, rather than freedom for the various licensee companies to adopt whichever system they prefer. Competition at home will put our industry in a better position to compete abroad.
Cable Television will not only bring more entertainment and information services to the home, but later, through the so-called interactive services, two-way cable will open the possibility for people to buy, sell, hank, study, work, and even protect themselves through security systems, using their own cable. For that the industry must enjoy freedom to develop.
When introducing the White Paper in this Chamber and in another place respectively the Lord President of the Council and the Home Secretary intimated that it was the Government's desire to afford cable television as great a measure of freedom as possible. However, perusal of the Bill now before your Lordships gives me 539 a feeling that the drafters of it hanker after controls. Speeches are continually being delivered on the necessity to find and further new industries. We have one in cable television; let us not smother or strangle it with bureaucratic controls.
It is natural that pay-per-view should he a bone of contention, arousing fears that the general public will be deprived of viewing the principal sporting events that they have hitherto enjoyed, despite the safeguards contained in the Bill. But I beg your Lordships to bear in mind that the development of cable television and the employment that it can directly, or indirectly, bring will depend on the money that it earns.
Five years are required to establish a cable network properly. If the franchise period is to run for 12 years, the operator will have only seven years in which to earn some money after five years of waiting and of large capital expenditure. This will not further the development of cable television. Security of tenure for a longer period would encourage investors and hasten development and the resultant employment. Much will depend on how the cable authority interprets its role and on such guidance as it may receive from the Government.
§ 6.57 p.m.
§ Lord Howard of Henderskelfe
My Lords, in view of the time that remains to us, I shall try to speak in shorthand as far as I possibly can. First. I much regret that I cannot congratulate the noble Lord, Lord Hanson, since unfortunately at that moment I was upstairs in this House and did not have the opportunity to hear his speech. I indeed regret that since the noble Lord joined your Lordships' House at the same time as I did. It was a great sorrow to me that I could not be present when he spoke.
I turn to the other speeches that have been delivered today. As usual, the speech of the noble Lord, Lord Hill of Luton, was very forthright, though it was perhaps rather more pessimistic than normally. However. I noticed that he was really the first speaker who put foremost the interests of the consumer, the person who will actually receive the signals that will be sent down the cable. I am thankful to him for that, and I congratulate him on it.
I was also much impressed by the breath of fresh air which we had a moment ago from the noble Lord, Lord McIntosh of Haringey, who told us of what had happened in other countries. I am sorry that he did not mention Japan, where, I understand, there are at present no proposals at all for cable. Wisely and cannily, they are sitting back as they always do to let other people make all the mistakes first.
There has, I believe, been a widespread misunderstanding regarding what cable is all about. I have spent a large part of the last three years talking to people about it privately and indeed publicly, and about the interaction between it and direct broadcasting by satellite. The trouble is that when one points out the problems and difficulties, such as the kind to which the noble Lord. Lord McIntosh, referred, one is, or tends to be, accused of being against cable—as though one could be against something which is coming anyhow.
540 There is no doubt at all that there are certain factors which eventually—and I stress, eventually—will bring great benefits to the inhabitants of this country; never to all the inhabitants, only to a proportion of them. In addition to the interactive elements of cable which have been mentioned, there is another aspect which I do not think has so far been alluded to. I refer to forms of community television, which at present are not possible with the areas covered by the regional ITV companies and even less so with the much larger regions covered by the BBC. However, cable, with its smaller components, can produce local television, which can be of undoubted benefit in the future.
It can also produce, I believe, through the use of international consortia, opera and other forms of high grade entertainment which are at present rather too expensive for any one television company or corporation to produce on its own. Specialised channels are another element of cable TV that can be of undoubted benefit. However, we come back all the time to a Catch-22 situation. It has been mentioned a hundred times that the advance of cable can only be entertainment-led. Possibly, it will collapse. If it does not collapse. there are other difficulties. If it does not collapse, its future revenue may, indeed, he of Reuter's proportions. That may be, in the end, the way that cable will go. That may be the final benefit. But, at the moment, there are far too many imponderables.
At the heart of the problem is this Catch-22 situation—the fact that, on the way to producing these good results which I can foresee in the fairly distant future, we may end up by destroying what I described in my last speech in the House as the least worst television in the world. Even then, I was accused of complacency for saying it. The point is that, up to now, almost by mistake, we have had a very good way of financing our television. Although in keen competition at the sharp end, the BBC and ITV are financed in quite different ways. In the future, this will not be so. ITV will be in direct competition with cable for advertising revenue. As already pointed out, that revenue is perhaps finite. We do not yet know. There are so many things that we do not know. What we do know, as I have already mentioned, is that the whole of this country is never going to be cabled. You can argue about what percentage, 40 per cent. or 50 per cent. or, if you are optimistic, 60 per cent., will be cabled. What you do not have is the universality that both independent television and the BBC provide at present by their terrestrial networks and in the future, I hope, through DBS programmes.
In providing the framework for spreading cable round the country, the Bill is. I regret to say, extremely vague. It contains an inherent conflict, already mentioned by the noble Earl, Lord De La Warr, with many of whose remarks I agreed. It is an inherent conflict between the Home Office-sponsored authority and Oftel, sponsored by the department. Unless more stringent requirements are laid upon them for what one does and what the other does and the relationship between them, we are going to have continuous battles.
Some very odd phrases are used in establishing the authority. In Clause 7 and subsequent clauses, we see the phrase:shall do all that they can to secure".541 That is a light rein if ever there was one. I am also informed that it is the first time that this particular phrase has been used in legislation. There is no precedent whatever for instructing an authority—an authority, mark you—to do all that it can to secure, poor dears. What does it matter whether it is a part-time or full-time chairman if it is not given the authority to do what it ought to be doing?
The same follows throughout the rest of the Bill. What is a proper proportion? That point has already been brought out. There is much else that will obviously need a good deal of attention in committee. The "must carry" rule has been mentioned in passing. Undoubtedly, this will have an effect both on the law relating to copyright and, believe it or not, on the law relating to theft. There is not a sufficiently clear differentiation between wide band and narrow band cable. My understanding—I am open to correction—is that it is open to those who provide narrow band cable to receive a DBS signal, transcribe it, and issue it without further payment down its cable to its own subscribers. If that is not theft, I do not know what is.
We are very unclear about the whole sporting scene. I shall not go into details, but it is quite impossible to protect what are called national events unless you clearly forbid pay-per-view. It is impossible to erect a fence around Wimbledon, the Cup Final or the rest. That is on the assumption that cable does become powerful and is successful. If cable works, cable will inevitably be able to outbid both the BBC and ITV for these national events. It will do so partly because it will be able to buy up lesser events for which it will pay more than is at present paid for the national events. The sporting authorities will then quite rightly say, "Why should the lesser events get more than we can get for our major event? Why should Bourn mouth get more for its tennis players than ours at Wimbledon?" More will have to be paid, which will be an excessive sum for the existing broadcasting authorities.
Another issue mentioned in the Bill which will have to be examined in committee relates to complaints. There is a perfectly good statutory broadcasting complaints commission. Why should the authority he allowed to look at complaints on its own without having to refer them to the same broadcasting complaints commission? Are not the complaints likely to be of exactly the same nature—unfairness and all the other things that go before the broadcasting complaints commission? Why should there be this difference? Is it also connected with a lighter rein?
Finally, I return to DBS. I was accused privately the other evening of talking nonsense by saying that it was complementary to cable. It certainly interacts with it and has a close relation to it. The two are bound up, one with the other. Here, we have some real difficulties. Just to show how much misunderstanding exists of the problems involved, the Standard chose to state, I understand, on Friday, that the BBC was being terribly obstinate and was delaying the introduction of DBS because it was insisting on C-Mac. Any of those who know anything about this matter will be aware that the resistance that the BBC put up to C-Mac was very considerable, partly because we believed that extended PAL, to all intents and purposes, except to the greatest experts, was just as good a system, but more importantly, because C-Mac is a very much 542 more expensive system than extended PAL and is unlikely to be accepted by any other country in Europe. There are a few rumours that the French might still accept it, but that is highly unlikely.
What it will cost extra to the owner of a set is a matter of considerable argument. There are those among the manufacturers who persuaded the Part Committee to recommend the adoption of this standard saying that it would cost only £50 extra a set. I do not believe that. I believe that the cost would be nearer £200, like other experts who have suggested that this is the correct price. But, worse still, not only will it increase the cost to the consumer, it will also delay the introduction of DBS. There is no chance whatever, now, of DBS being introduced before 1987. The particular manufacturers concerned have not yet even designed the chip that lies at the heart of the C-Mac reception. We are not going to get any kind of DBS before 1987 even if a satellite were ready. There would not be much point in putting it up if there were no sets down here to receive it, especially when the BBC is having to pay the British consortium 30 per cent. more than the cost of buying transponders on an American satellite. So in every way the difficulties which have been put in the way of DBS have been introduced, not by those who would like to see it flying around the sky, but by the actions of Government.
If we had DBS it might be that it would not be a success either. That is one of the matters which we have to face. We just do not know—especially in view of the fact that VCRs are so very popular in this country—whether either DBS television or the whole system of cables, interaction and the rest of it will be a success. I am not a pessimist. I believe that we have to go on and that we should be mad not to do so. But we certainly cannot go on with a Bill which is as complicated and as badly drafted as this one and which is so much in conflict with another Bill that is at present proceeding through another House and is about to arrive here. I certainly should not advise your Lordships to vote against the Bill, but I should advise your Lordships to scrutinise it very carefully in Committee.
§ 7.11 p.m.
§ Viscount Mersey
My Lords, I should like to start, slightly surprisingly, with a quote from the Fellows of Eton College:Cable will be injurious to the discipline of the School and dangerous to the morals of its pupils. Anyone who knows the nature of Eton Boys would agree that they cannot be kept from a television".In fact, I apologise for misquoting: it was not television to which they were referring, but the arrival of the Great Western Railway through Slough in the early 19th century. Lest I be accused of being elitist, I should mention also a letter from, Lord John Russell to Stephenson saying that he thought that the railways would:Corrupt public morals in rural areas: especially the Sailors of East Anglia".Railways and cable have in my view so much in common that I think that that quote is relevant.
Basically I welcome the Bill. Cable is a track of access just like the railways. In the 19th century we 543 had an iron network spreading throughout our land. In the 20th century it is to be hoped that we are to have a network of fibre optics and co-axial cable. Both have the same aim—to improve access. The good news is that it does not cost the taxpayer anything. Surely it must be right that a cabled country is better than an uncabled country? That must be as true as saying that a country with railways is better than a country without them. Therefore, I am basically wishing the pioneers good luck, and I am only slightly concerned that we are going to be too restrictive in our legislation.
The key must surely be to build the track. The many interactive benefits that will derive from it have been mentioned already. For example, there is instant electronic mail. It is hoped that delay in the first class post will be very much something of the past. There will be many more benefits that we can no more envisage than could the founders of our railways. Indeed, these interactive cable services will run initially at a loss. They must come in on the back of narrowcast television, and therein lies the rub. If the narrowcast television also loses money then the network simply will not be built. I believe that we should give the pioneers a free hand. Cable is very risky. I have heard the figure of £3½ billion mentioned with no return for 10 years—perhaps for even 20 years. Whatever we do, quite a few pioneers are going to go bankrupt in the same way as the Victorian railway pioneers went bankrupt. It is inevitable. So I say in my philistine manner for once that we must give the public the chance to have what they wish to pay for. Whether it be "Coronation Street" as opposed to "Horizon", I do not think is our concern. Whether it even be "Kojak", "This is your Life" or, in particular, "Come Dancing", I do not think is our concern, either.
I see that the noble Lord, Lord Hill, is not present but he mentioned pap, sawdust and triviality. Of course I go along with that. In fact I have a vested uninterest, because I am the maker of rather esoteric and I suppose highbrow documentaries, and I am almost talking myself out of a job right now. However, it makes the best economic sense to go for what would be thought to be most profitable and that is not, of course, to say—as has been said previously—that the standard if low must stay low. Once the track is built—andthis is the key point—and once the subscribers are hooked, then we can raise the standards. I noticed that other noble Lords have questioned whether we will ever raise the standards I believe that we can and must do so. I believe that the essence of that is in the Bill and certainly in the White Paper.
The way in which the Bill is too restrictive has again been mentioned, particularly by my noble friend Lord Orr-Ewing. I shall list very quickly four points and I think that they are all "repeat" points. First, the BBC could show Test Match highlights and cable could not show the whole match. Secondly, since there may be no capital return for perhaps under 20 years, a franchise of up to 12 years is too short. Thirdly, too many channels could be taken up if the "must carry" conditions apply, particularly if DBS is to be included. Finally, the classified advertisement, Daltons Weekly, type of magazine programme, would seem to me to be 544 impossible with the Bill as it now stands, although I noticed what the noble Baroness said about it in her opening speech and it may be that I am wrong in that connection.
What I would endorse is the view that British material should be in "proper proportion" and not a quota of 86 per cent. Indeed, 86 per cent. by statute is wrong. The BBC and the ITV do not have it. I listened to the noble Lord, Lord Jenkins of Putney, as regards this matter but I still have the same feelings. I think we risk killing the goose that laid the golden egg if we follow that course. My goodness! the authority should work towards that goal once we are all hooked on cable, but not before.
As to the very understandable fear that there could be British technicians out of work, I should like to quote once again:Hundreds of Innkeepers and thousands of horses will be thrown out of employment".That was said in another place about the London to Birmingham railway. We also rejected it in this House. The railway was abandoned and that caused John Francis to write in 1851:Men who had lifted their heads high mourned their recklessness and women wept for that which they could not prevent".Please, not that again! I certainly welcome the cable authorities' light touch or light hand, and I hope that it will be feather light, perhaps even as light as hydrogen. Obscenity and racial hatred apart—and obviously they must be excluded—I wish pioneers all power to their elbows and I conclude with one line of Horace, beloved by the noble Lord, Lord Annan:First acquire wealth. Then practice virtue".
§ 7.19 p.m.
§ Lord Glanusk
My Lords, unlike the noble Lord, Lord Hill of Luton, who came in like a battleship with all guns firing. I also am in agreement with the principles of the Bill, not because I believe that there is a serious need for more entertainment in the home, and nor do I believe that there is a great fund of new worthwhile material waiting to be launched on the public. But I do believe that in the next decade or so a large number of advantages will appear over the medium of cable, some of which are hard to visualise at present.
Meanwhile, as an ex-salesman myself, my sympathy goes out to the poor sales managers and their staff who will have to launch this new source, with little more than entertainment to offer in the early stages, on to a public already well served with four radio channels, four television channels and apparently unlimited video cassettes, some of which are of rather dubious quality. That really is tough competition and if the cable companies are to succeed they will need early and rapid development of alternative services, probably with the aid of the interactive facilities which they uniquely possess, in order to attract the public to this new system of unproven worth. But if they can overcome these first few years, in spite of the huge capital outlay required, all of which has to be committed before any rental charges are collected, it could bring nearer a whole new way of life, both to the private individual and to the business man and woman.
545 With regard to the Bill itself, a number of points require clarification, some of which have already been mentioned but I think they are important enough to be emphasised again. As was mentioned by my noble friend Lord De La Warr, there is the confusion between the Department of Industry and the Home Office. Half of the cable broadcast system—namely, the cable itself—is to be licensed by the Department of Industry and Oftel, while the head-end equipment and the programme operators are to be licensed by the Home Office and the cable authority. In my opinion, this is bound to lead to confusion and at some stage to damaging and expensive bureaucratic delays.
There are provisions in the Bill for the two authorities to consult one another, but what happens in the event of disagreement? It seems a little heavy handed to have to go to the Cabinet for an answer. In her opening remarks my noble friend Lady Trumpington touched on the complexity of some of the definitions in Clause 2. I am not sure that I followed exactly what she said, but I think there is still some difficulty. This clause deals with some definitions, including "prescribed diffusion service", which, to paraphrase, says that it is a service which the Secretary of State may prescribe by statutory instrument. This does not seem to me to give us a very good idea as to what they are getting at. It is a little like looking in the Oxford Dictionary for a word only to find the statement "To be published in our next edition".
Similarly, in Clause 5(5) of the Bill there is reference to "related services", which is scarcely a definition. I would submit that without some expansion of these definitions it is extremely difficult fully to understand the Bill and the intentions behind it. Perhaps my noble friend the Minister can enlighten us before the next stage.
There is also a further anomaly. One can imagine certain services which can be offered by an operator which are not included in the definition of "licensable services"; nor are they included in that of a "restricted service". In other words, I am thinking of a service which is not piped to two or more dwelling-houses and where the audience has a business interest in the programme. These could be services put out on a dedicated channel for business schools, and including professional language courses, advanced education for teachers, piped to all schools in the area, trade union branch meetings connected directly to area headquarters, and suchlike. As the phrase "business interest" is not defined in the Bill, it remains a moot point whether children at school learning maths or science via a cable system are classed as business users. Certainly many of them will not deny that it is "pleasure".
Services of the sort at which I have attempted to hint—and I am sure that there will be many more of them in future—become almost by default "unlicensable services" and are therefore outside the control of the authority. At this stage I merely wish to raise the question whether it is wise or desirable to leave them uncontrolled.
The question of the duration of the licence has been fully covered and I do not think I need mention it again. But I think the majority believe that 12 years, with no time for installation of the cable added to that, is too short. It is possible to foresee a situation in which an operator in a particular area goes into voluntary or 546 compulsory liquidation or may have his licence revoked under Clause 17 for some malpractice or other, which would have the unfortunate result that the cable supplier will be left with a dead cable and no revenue. The Bill states that the authority may re-advertise the franchise if it sees fit, but surely it would be more equitable on the cable supplier if the Bill stated that the authority must re-advertise, and very quickly.
Under Clause 16 the authority can demand that a licensee produce records of his programmes up to the three months after the date of transmission. On the face of it this appears to be a very heavy burden on the operator. I should like to try to explain to your Lordships why. An operator who is putting out 10 hours a day on, say, 20 channels and who is storing it on the normal 10-inch video tapes will be required to store and catalogue a stack of reels over 9,000 feet high—that is about three times the height of Ben Nevis. I would suggest that a far shorter period than three months would be sufficient and much of the material—such as that which is received from the BBC and the ITA and immediately re-broadcast—could be excluded from this clause.
The question of direct broadcast by satellite has been fully covered by the noble Lord, Lord Hanson, in his excellent maiden speech which I much enjoyed. I would only mention that in Clause 12 of the Bill it appears that all DBS channels are to he included in the "must carry" clause. At present only some four or five DBS channels are proposed on the first satellite, and I believe that this would be acceptable to the operators. But at least two more satellites are planned in the long term, and it would not he reasonable to expect the cable operators to put out some 20 channels under the "must carry" rule, as this would take up over two-thirds of their available capacity and prevent them from promoting their interactive capabilities to the full, which is the declared intention of the Bill.
I think that I have said enough to outline some of the anomalies that have occurred to me. All that remains is to wish the House, when the Bill goes into Committee, the best of luck in revising it.
§ 7.28 p.m.
My Lords, I must begin my speech this evening with a very sincere apology. One or two noble Lords may have noticed at the time, and it is possible that perhaps even one might recollect that, when I first had the honour to be introduced into your Lordships' House almost exactly eight years ago, I was, as a result of indulging in athletic activity not wholly consistent with my constitution and my then state of physical preservation, suffering from what is known in technical medical terms as a prolapsed intervertebral disc resulting in a paralysis of my fifth lumbar nerve. As a result of that, my first few weeks in your Lordships' House were spent creeping about on two sticks, and I may say that I felt entirely at home in your Lordships' House. But I recovered.
Of course we never learn from experience. The only thing we learn from experience is that we never learn anything from experience. This weekend I have done it again, but this time it is the fourth lumbar nerve, not the fifth, as a result of which I had to spend this 547 morning finding out whether I have to spend Christmas in plaster or in hospital, or whether I am allowed out and not under restraint. As a result of that, I had to do something which I regard as well nigh unpardonable. Speaking below the line, I was unable to hear the speech of the noble Lord, Lord Elton, which I understand was admirably read to us by the noble Baroness, Lady Trumpington. Nor did I have an opportunity to hear the speech of the noble Lord, Lord Mishcon. However, I did arrive in time to hear the speech of my noble friend Lord Aylestone, which was fortunate. So I can be absolutely sure that my noble friend and I are in entire agreement on this matter. Therefore, I think we may regard the Alliance as undivided.
Having made that apology, it would he right if I tried to be brief, though having said that I shall try to he brief perhaps it will not be misunderstood if I say nevertheless I should like to reserve the right to be somewhat more lengthy during the later stages of our consideration of this particular Bill. In saying that, perhaps through your Lordships I may say a word to thank the many kind people who have sent me all these briefs about the Bill. All these various briefs I have received are invaluable. Many I agree with wholly, but in the main they are points which I should wish to deal with at Committee stage rather than on Second Reading. I hope that the fact that I do not refer to any of them during Second Reading will not be regarded by any of those organisations who have sent me these briefs—as they have been sent to other noble Lords—as indicating that I do not appreciate them.
My noble friends on these Benches support the Second Reading of this Bill. We do that because we should like to see the establishment ultimately of a fibre optic cable network in Britain. We should like to see that particularly for the benefits of the various interactive services which we believe would ultimately flow there from. Here I must disagree with the noble Lord, Lord Hill of Luton. I do not think we are thinking only of providing a means of stopping people going to the shops when they actually want to go. Many of the benefits of the interactive services would be vast in terms of employment for the disabled and perhaps employment of women with children. There would be many opportunities. There is meter reading, and all sorts of things. The advantages have been spelled out by other noble Lords on other occasions, and they are valuable.
Having said that, on these Benches we question the wisdom of trying to bring in that fibre optic cable network in Britain on the back of entertainment, or perhaps even hopefully on an educational TV cable service. As the noble Earl, Lord De La Warr, said in kindly quoting from my speech on the White Paper, I personally have grave doubts as to the viability, in financial terms purely, of cable TV as it now appears to be.
Indeed, I believe that the need for the new cable companies to become financially viable—and if they do not, they will not continue to exist—may itself affect adversely the standards of TV cable services, or could affect adversely the standards of those services. That is a matter on which I agree wholly with the noble 548 Lord, Lord Hill of Luton, who made that particular point.
My impression—and I say it is no more than that lest the noble Earl, Lord De La Warr, should quote me again—is that, when the franchises were announced recently, many of those consortia which were disappointed, far from being cast into the slough of despond, breathed deep sighs of relief. Again, I would venture to suggest that, by the time we arrived at D-Day, I doubt whether all 11 successful applicants will still be in the field. We may find that because of the financial difficulties some may have decided to fall by the wayside.
Let me say a little more on that particular matter before I move on. On these Benches we are not wholly obsessed with arguments about the relative merits of the public and the private sectors. We believe in both. We believe that there is a place for both the public and the private sector. Having said that, one wonders whether it is wholly a matter for the private sector and the cable companies to be responsible for the infrastructure—for what in the North we would call the "gubbins" of cable TV.
We do not expect the plumbers to install the public sewers. The public sector provides the sewers, and then imposes charges for people to be connected thereto, or to have a use of the sewers. I hope that nobody will consider that there is any Freudian significance in my mentioning sewers as a sort of parallel in relation to cable TV. That was not intended. But if we look at what has happened with water supplies, gas, electricity, and indeed sewage, the infrastructure is in general provided by the public sector. In my view, perhaps British Telecom should be providing the fibre optic cable network, and then should make substantial charges to companies for use of it. If we do that, then the financial burden on the companies would be less than it may well be.
When we talk about the financial burden, of course they have to have income. I know it is a point on which my noble friend Lord Aylestone feels strongly, but I am bound to say that advertising revenue to support television, or indeed radio, is not limitless, as Channel 4 has already shown and Breakfast TV has shown. If we insist on the companies extracting more and more revenue from advertising, that could have a damaging effect on very viable concerns like commercial radio, for example, in which I ought to declare an interest as a director of one of the independent commercial radio companies.
However, in looking for income in a new venture—and this is a new venture—we ought to be prepared to be innovative. It was always my impression that in your Lordships' House and another place everybody always turned their backs, as did the BBC and the IBA, on any question of sponsored programmes. I can understand that. On the other hand, I very much share the view expressed forcefully by the noble Earl, Lord Halsbury, that we need certain minority programmes of quality. He made the point, and he is right, that sometimes you can only get those by providing the means whereby people can pay for them by pay TV.
Of course, who knows what a minority programme is? Back in 1967 when I had the honour to be a 549 member of the BBC's General Advisory Council at a time when the BBC, on the whole, preferred advice of a somewhat different character from that which it regularly received from me, I suggested that the BBC might look at snooker as something to televise. I was told by the then chairman and the then director general that snooker was a minority interest. It was no good thinking about that for television. I merely say that we do not know in advance what is a minority interest and what is a majority interest.
I think that perhaps we should think a little about sponsorship in terms of standards of programme. I believe that certain insurance companies, banks, and others might be prepared to sponsor a programme of high quality—something costly like opera, ballet or something of that kind—which otherwise might not take place at all, and certainly could not be supported by the kind of advertising to which the noble Lord, Lord Orr-Ewing, referred, where the amount of advertising time is limited by the hour and is not related in any way to the programme.
That is a way in which we could increase standards. On this question of standards, I very much share the view of those who express fears about our own private sector production companies. It is important that they should be given adequate opportunity to develop both from the point of view of employment and from the point of view of providing outlets for genuine, creative talent. But I am perhaps a little uneasy about being grouped together with the noble Lord, Lord Jenkins of Putney, in being extremely patronising about anything that ever comes from America.
Whenever anybody refers to American television programmes they refer to pap. All right, we have plenty of pap of our own. The noble Lord, Lord Nugent of Guildford, made that clear only last week in your Lordships' House. Our programmes have their high prestige value in the United States of America because they are considered in relation to productions such as "Brides head Revisited", or the "Bar Chester Chronicles"—programmes of high quality coming from both channels. But, if they were to be judged by some programmes which are purely of British initiation, then we should feel very uncomfortable indeed. There is much stuff in the United States which is valuable and of high quality. When one is talking about quotas, let us think a little more about the maintenance of standards rather than about saying 10 per cent., 14 per cent., or 16 per cent. I want to know: 16 per cent. of what? I think the noble Lord, Lord Hill, quoted the Bill as saying "a proper proportion". A proper proportion of what? I do not mind how high the proportion is of something which is of good and high quality, but I do not want much of a proportion of things which are bad and of low quality.
I really must come briefly to one or two detailed points which I shall not make, but I shall put up as markers to the noble Lord who is to reply so that he will know the matters into which I shall want to go more deeply later in the Bill, and so that he will know the kind of matters upon which my noble friends on these Benches will require some reassurance if the Government are to continue to enjoy our support on the Bill throughout its later stages.
First, on a point just dealt with, there is an important need for the active encouragement of, and 550 the provision of incentives for, the growth of the independent production sector here in Britain. That is important; I will not deal with it now, but it is something on which I will speak later. Secondly, there is the need to make absolutely sure that the cable operators are responsive to local needs and the need to ensure that there is an adequate local content in programme material. Here I say advisedly "local" rather than "regional". The trouble with the old BBC regions was that they were too big. The northern region stretched from Newcastle down to Manchester and from Chester right over to the Wash. This idea that if one lives in Manchester something is desperately interesting because it happens in Blackburn is not true. It is no more interesting than it would be if it were in Bog nor Regis. Once we get to smaller units—and cable can get to smaller units—I think there is a genuine type of homogeneity of interest in a locality which there is not in a region. We should want to see that the cable operators are responsive to local needs and that there is an adequate local content in programme material.
We want to see a diversity of choice of programmes throughout the cable companies and throughout the network. We should want to find the means to make absolutely sure that the provision of cable services will not merely provide a facility for the well-off, and for people who can afford high rentals, but a facility which could be of benefit to the population as a whole.
Finally, I think we shall want to know a little more about the links between the cable authority and voluntary bodies of one kind or another, particularly those voluntary bodies that are responsible for information services, like the Citizens' Advice Bureau, the Consumers' Association and so on. I hope there will be effective links between the cable companies and between the authority and those voluntary bodies. I personally think that those links might be most secure if, in the appointment of members to the cable authority, the Secretary of State considered somebody who could be known to be in close contact with those national voluntary bodies and would be in a position to speak on behalf of them and keep the cable companies in touch with what those bodies were doing.
Those are the points which we shall wish to consider further in the later stages of the Bill. In the meantime we are prepared to give the Bill a fair wind for its Second Reading.
§ 7.43 p.m.
§ Lord Ardwick
My Lords, first I should like to congratulate the noble Lord, Lord Hanson, on a most interesting and informative speech. He has convinced me of what I was already beginning to suspect, that cabling is not a new technology; it is an intermediate technology that could easily be put out of date by satellite or by other means.
In this debate all the speakers have expressed their hopes and their fears of the effect that cable systems and services, covered by the Bill, will have on the life and prosperity of the nation. We are in the early days of an information and communication revolution, an industrial revolution, which will change the ways we do our work; the ways we conduct our business and 551 make use of services such as shops, banks and bookmakers. Where the advanced nations lead the less advanced will follow and one day they will require the pioneer nations to supply them with the new technologies and new systems. If we lag behind other advanced nations in this revolution we shall lose trade, employment opportunities and influence.
The Government have seen the light and acted quickly—some people think rather too quickly. So have the Governments of France and Germany. In fact, both these countries are going harder for the goal than we are and they are doing so by putting considerable public funds into the cabling experiment. Our Government have a phobia about public expenditure. Here I am following the noble Lord, Lord Winstanley, with whom I agreed completely on this point. The Government are leaving the entire development to private enterprise which will simply receive gentle guidance but no cash support. The speed and spread of cable development will depend not on the national need but on what the market can support.
What the market can support will depend on the unpredictable appetite of the urban population for more entertainment. The revolution is to be market-led, entertainment-led. It will depend largely upon how many people are prepared to spend how much on new channels of entertainment and how much these channels will cost to provide is what Mr. Stephen Hearst, writing in the Political Quarterly, said,It is as if the Roman senate had sanctioned without debate the proposition that improvements to the supply system of the Roman Legions should first be introduced by speeding up the chariots in the hippodrome".I should like to quote the Financial Times of 2nd December which is nearer to the market than I am:There is at least a risk that cable television will not bring attractive profits for its operators, will not lead to worth-while improvement in the choice of programmes available to viewers, and will not deliver entertainment in the most cost-effective way".The Financial Times adds that there is a view in the telecommunications industry that the dream of an efficiently-integrated communications system, is looking increasingly unreal. Many people seem to have supported that view tonight as if the first Lord Thomson of Fleet were laughing in the shades about people applying for licences to lose money.
The development does not depend on the instant response of the public. Capital must go ahead of demand and take a long term view of the possibilities of profit. How long a term nobody can say. Cable could catch alight like wildfire just as video has done, to everybody's surprise. But it may be that seven lean years will have to be endured before the profits are significant. By that time I take it that there will be additional sources of revenue from the interactive services. But this will put a strain on the programming in the earlier years. The operators will be under pressure to make their investments pay as soon as possible; investments heavier than the French and German cable operators will have to bear.
Some of us would be happy tonight if this were a Bill to permit Government participation in the physical side of the cabling project, which was likely to cost £3 billion or £4 billion. We should have liked, as we have 552 argued in previous debates, the Government to decree that there should be a single national cable provider and that provider should be British Telecom. The danger of the course that the Government have taken is the pressure that can be put on cable operators to maximise their audience. Those of us who have worked in popular journalism know what it is to be driven down market by the need to survive in the face of severe competition. Usually it means increasing the sensational and decreasing the serious content of the newspaper, even perhaps to turn it into a casino. Many people fear that when the same pressures are felt in programming for the small screen operators will fall back on what has proved elsewhere to be a cheap and effective formula of providing a surfeit of soap operas, quiz shows, Westerns and crime thrillers with plenty of violent action. All these are acceptable and enjoyable forms of entertainment, but they are not enough in themselves. Popular entertainment needs a wider base, more variety to give us all more choice.
Against this gloomy view, however, can be set a belief that the cable operators cannot surely believe that people will pay £4 or £5 a week for additional programmes of this kind which they are already receiving from the broadcast programmes supplemented by video. Surely the cable operators must provide programmes better than those available off air or provide things that viewers do not get off air such as an all-music channel, a sports' channel, a children's channel and local news. Nevertheless, the problems are formidable. From the beginning, first radio and then television, have had to work within a limited number of wavelengths. There has always been more talent than there have been outlets and suddenly all this has changed. There are to be almost unlimited outlets and it seems impossible to service even half a dozen new ones without recourse to material which has been broadcast already. Cable television, as one writer in the Guardian put it, will be a voracious monster, devouring the stocks of feature films and endlessly regurgitating them. In their anxiety to attract the entrepreneur, the Hunt Committee proposed a bare minimum of safeguards. Cable operators should not he under the close supervision that the IBA exercises over the programme companies, et cetera, encouraging them to widen their range of entertainment; and would not insist upon as much as 86 per cent. of the material broadcast being of British origin.
The Hunt Report aroused the fear in some of us that what is acknowledged to be the best television service in the world might be subject to intense and unfair competition. There is a good deal in the Bill to militate against these fears, as there was a good deal in the White Paper. Cable television will be limited in the amount of advertising it can give in programmes which are similar to those on independent television. The noble Lord. Lord Orr-Ewing. was wondering why this should be so. It is simply that when we are watching commercial television we are protected from having too much advertising which plainly does not work. One's mood is uplifted by a play and, quite suddenly, the play stops and there is a lady feeding food out of a tin to her cat. It is to protect us against too frequent interventions of that kind. Nevertheless, if it is permitted to cable, which is putting out similar programmes to ITV, to be free of that restriction, there 553 must be a demand from some companies at some time to increase the amount of advertising on commercial television. And that would be against the listeners' interests. I should have thought.
§ Lord Orr-Ewing
My Lords, the point I make is that it is against the subscribers. They have paid for their rights. They can very quickly switch off if they do not like the amount of advertising and they will not subscribe again; so that you are killing the market in which you have invested a lot of money to serve. It seems to be that this is automatic in a market economy—which cable would be.
§ Lord Ardwick
My Lords, I do not know whether the noble Lord would like to remove the restriction from independent television; because that is what it would lead to. I do not think that that would be very popular in this country. You would have more people switching to the BBC perhaps.
Cable television also would be obliged to carry a proper proportion of matter originating on this side of the Atlantic. Nor will cable be able to pick up the large audience which may exist for what are known as adult movies. The idea of pay-per-view pornography guarded by the sort of paternal padlock has really been laughed out of existence by everybody who realises that the modern child has enormous dexterity and a certain prurience. Nevertheless, however much good we may hope from cable, the mere proliferation of channels, the fragmentation of audiences, which has already begun with the creation of Channel 4 and the advent of VCRs, could start a trend of unfortunate consequences.
As more than one speaker has pointed out in the various debates we have had on the subject, if ITV profits are substantially diminished by the loss of viewers and it is caught in a struggle for the ratings we shall finish up with more but worse television; and the BBC itself, which always has to justify its licence income, may have to lower its sights and engage in the struggle. Indeed, it is already facing the problems of a diminished audience as a result of the fragmentation.
One must welcome, however—and I was welcoming it wholeheartedly—the freedom to cable operators, properly circumscribed, that the Bill gives to provide sponsored television and pay-per-view television. It is one immediate way of making programmes of high quality which would not, in the normal course, have been available to the viewers. Nevertheless, the noble Lord, Lord Howard, causes me to think again when he points out that the existing broadcasting companies for which the great national events are now reserved would no longer be able to reserve them if the sports authorities and the people running the sports were offered vastly greater sums by the cable companies. It would be difficult to say to Wimbledon that it could not sell its tennis tournaments to the highest bidder. I think we shall have to think about that seriously again as we go into Committee with this Bill.
It is to be welcomed that the Bill puts the BBC, ITV and radio within the cable picture by requiring the operators to carry all the present services and the new ones which will come some day via satellite. To have the whole range of public service broadcasting alongside the new cable channel will provide real 554 choice. Nevertheless, the Bill is far from satisfactory. Take the stipulation that channels similar to ITV will share the limitation on the amounts of time which may be given per hour to advertisements. This is the meaning, I assume, of Clause 11. Perhaps the noble Lord when he comes to reply will answer specifically on this question. One can see that a local programme providing classified advertising is dissimilar to ITV and therefore, quite rightly, will be unrestricted. One can see that shopping features, particularly when they come to have an interactive response, must be excluded. But suppose that there is an all-sport channel or an all-music channel or a children's channel; surely these will be unique. Will they be under any restriction about the amount of advertising that they can carry? The words of the White Paper and the words of the Bill—which are rather obscure—say that the programmes must be analogous to those on independent television. The greatest concern has been expressed, particularly by my noble friend Lord Jenkins, about the amount of British material that can be broadcast. The phrase used in Clause 9 about "proper proportion" comes from the legislation which governs ITV. Nevertheless, no attempt is made to stipulate what this may mean in the context of cable television. We know that the amount used by the broadcasting authorities does not exceed 14 per cent. I should like to ask the noble Lord whether this is the notional figure which the cable authority are expected to have in mind when it takes into account, under Clause 6, the extent to which the applicant proposes to include matter which originates within the European Community—which roughly means, in this context, in Britain.
The question is one of considerable importance both culturally and economically. Surely, the Government should give a target figure which must be attempted or should lay down guidelines for the authority. The authority may be the best judge of practicalities but the policy must come from the Government and must be in much more precise terms than a "proper proportion". Indeed, it might be possible to approach the problem by stipulating the amount of British and European material which should be the target for the early years.
There are 160 independent production companies now operating in Britain. Many of them have proved their excellence in their contributions to the splendid Channel 4. "Britain can make it!" we used to say; or it can make a lot of it. No doubt, it could provide some less expensive programmes, although, obviously, it cannot compete with the American material in price; for that material may be sent here—dumped here, in fact—after covering its cost in the United States.
The more one looks at the subject the more convinced one is that the cable authority must be much more intimately involved with the operating companies than was envisaged. The very terms of the Bill, making them take into account the range and diversity of programmes offered when an applicant for a franchise comes before them, presumes that they must subsequently monitor how the successful applicant is fulfilling his obligations. I think the noble Lord, Lord Bowden, had it right when he suggested that there should be something like the two sides of industry discussing these problems together.
555 The authority have also to see that the programmes do not offend against taste or decency under Clause 9, and under Clause 10 they have to ensure the political balance of programmes. I think this is a most important subject, which has hardly been touched upon. They have to see that they comply with the requirement not to give undue prominence to the views and opinions of particular persons or bodies, not only on religious matters but also on matters of political or industrial controversy or relating to current public policy. This, in a way—it depends on the way it is interpreted—could turn out to be just as rigorous as the stipulation in Clause 9 that all news given in programmes which originate in the United Kingdom must be presented with due accuracy and impartiality. The authority can be certain that the cable programmes will he under the hawk-like surveillance of local political parties and not merely that of self-appointed moral guardians, who will also be extremely active.
The Government have kept well away from the process of selecting the operators who are to pioneer the project; yet they must have learned from these people who are going to risk their money what are their aspirations and their apprehensions. What undertakings did they give about the range and diversity of the programmes? It would help in the consideration of this important Bill if the Government tonight would share this knowledge with us.
Finally, one would like to know the kind of people whom the Government have in mind to perform the important role given to the authority. I think the role is much more important than has been supposed and that, although the authority may have a velvet glove, it must have a mailed fist inside it. One hopes that the people who are appointed will be people who know something about television, and even that some of them may have had a professional role in a high level in the BBC or in independent television. Has the authority the right kind of powers to ensure compliance with its demands? That question has been raised several times during the debate. It certainly seems to possess two powerful deterrents. It can refuse to renew the licence at the expiry time or, under Clause 17, it can even revoke a licence. But it is a characteristic of such drastic powers as the power to revoke that they are not easy to use if they fail to deter. What other sanctions does the authority have or might it acquire?
The future, of course, is not clearly visible. In spite of all our apprehensions we must welcome cable in the hope that it will give us a wider choice of entertainment and a wider supply of information. We must give it the incentives and opportunities it needs to provide the best possible programmes and services. Then we shall have to study very carefully clause by clause this Bill as it goes through Committee, for there are many questions to be asked and there will he a lot to amend. In fact, never have I known such a clear White Paper produce such an obscure Bill.
§ 8.5 p.m.
§ Lord Elton
My Lords, the function of a Minister winding up a Second Reading debate is threefold. The first thing I have to do is to thank your Lordships for 556 your careful and expert contributions to the debate. Many noble Lords have contributed from a wealth of experience far exceeding my own which will enable them to exercise a most valuable influence on the development and refinement of this Bill—a process which I understand from the noble Lord, Lord Ardwick, and others, may take longer than had been hoped. Some of your Lordships have a direct or indirect interest in the industry which may be affected by this legislation, and I am grateful to them for acknowledging such interests since this enables your Lordships to take proper advantage of their close and up-to-date knowledge, both of the state of the art and the state of the market in which it is practised.
I am also very glad to take this opportunity to congratulate the noble Lord, Lord Hanson, on his compellingly interesting contribution to our debate and for the way in which he welcomed the Government's opening windows on the fascinating new world of computers. I hope we shall hear him very much more often in the future. I should also like to extend congratulations to the noble Lord, Lord Winstanley, on having triumphed over not one disc, but two, in order to get here for the end of the debate. Given the narrow choice he has before him—and I am sure he will know exactly what I mean—I hope that he spends his Christmas "plastered" rather than hospitalised.
My second function is to review the balance of your Lordships' debate. What has struck me again today, as it did when we were discussing the White Paper a few months ago, is that whatever the differences of view may be over some of the detail of the Government's proposals, there is an almost universal acceptance that it would be very unwise to try to prevent the development of cable and direct broadcasting by satellite. I say "almost universal" because of the charming and eloquent—although, in my view, misdirected—speech of the noble Lord, Lord Hill of Luton, in particular. He believes that we should be better off sticking to what we know and love. In many walks of life. that is the best advice anybody can give, but I think not in this one.
The great majority today, even those who fear we may be going too quickly, accept that there is nothing to gain and much to lose in turning our hacks on these two new developments. None of us can know how cable and DBS will work out in practice. One of the difficulties in approaching a Bill such as this is that it does not attempt to plan out the future for us. The Government's objective is to seek to create the right framework within which those who wish to invest in these new areas are free to do so, and nobody is compelled to. How quickly cable and DBS will establish themselves will depend upon the success of companies in persuading the consumer to buy the services which they can offer.
Some of your Lordships have suggested that the Government are leaving cable operators too much freedom and that more safeguards are needed for the BBC and the IBA. Others have warned that the cable industry could be unnecessarily fettered by some provisions in the Bill and they wonder whether the "light regulatory touch" talked about in the White Paper may in practice turn out to be rather less light and rather more regulatory than they had hoped. I shall return to that.
557 The third function—one for which, inevitably, my time does not suffice—is to answer the individual points and queries raised during the debate. I will provide what I can in the knowledge that all else—and a good deal more else—will be dragged out of me by probing amendments put forward by noble friend and noble foe alike. The noble Lord, Lord Mishcon, recalled the typically trenchant remarks of my noble and learned friend the Lord Chancellor at the time when we were considering the introduction of independent television. Many people have expressed the same misgivings about the consequences of giving cable the freedom to provide its own programmes. I do not accept that the Government have not given sufficient thought to these consequences or to the safeguards which are needed. Those considerations were the purpose for which the inquiry under the chairmanship of the noble Lord, Lord Hunt of Tanworth, was set up, and the Government have accepted the conclusion of the inquiry that greater freedom can be given to cable without damaging the essentials of public service broadcasting, provided that we have the kind of safeguards which are embodied in the Bill.
The noble Earl, Lord Halsbury, also raised the point which had been specifically asked about by the noble Lord. Lord Mishcon, which related to the character of the authority. I can confirm that it is the intention of my right honourable and learned friend to appoint members to the authority on a part-time basis, as happens with governors of the BBC and of the IBA. It will be for them to appoint the full-time members of their staff who will help the authority to exercise its functions. I wonder privately whether I might bring passages in the speech of the noble Earl, Lord Halsbury, to the attention of the incumbents of the position of chairman as they succeed each other.
The noble Lord, Lord Aylestone, raised some questions about the cable pilot projects. I can confirm that as soon as the cable authority assume their powers under the Bill, all existing cable programme services will become subject to their supervision and the licences issued by the Home Office will have effect as if the cable authority had issued them. That will mean, in particular, that if necessary the authority will be able to revoke the licence of any operator. On the question of consultation with local interests about the pilot projects, the Government took the view that the purpose of the projects in providing an early but limited impetus to the expansion of cable in advance of legislation—which was, in itself, regarded as somewhat unusual by your Lordships—should justify a streamlined process, which would not involve all the steps which the cable authority will be obliged to take under the Bill. There were therefore no local consultations and no advertising for competitive bids for each area.
The noble Lord also raised the issue of foreign investment in cable. The Bill contains provisions preventing the foreign control of cable operating companies, but does not preclude shareholdings by foreign interests. I may return to that if there is time later. The same approach was followed in considering the pilot project applications. None of the successful applications is from a foreign company, but four of the 558 11 have minority shareholdings by American companies.
The right reverend Prelate the Bishop of Wakefield was also interested in the ownership of companies and referred to the need to ensure that the cable authority could prevent the control of cable companies changing hands without their permission. We believe that the Bill already gives the authority the powers which they need in this respect. Under Clause 4(6), the authority can write into their licence conditions which they consider necessary to enable them to ensure that ownership arrangements are acceptable to them.
A number of your Lordships. including my noble friends Lord Glanusk and Lord De La Warr, and the noble Lord, Lord Hunt, and others, have recoiled in public alarm before the apparent complexity of the definitions in this Bill, and particulary those in Clause 2. I recognise and indeed sympathise with their symptoms, as I manifested all of them myself in acute form when I first came up against the definitions in the Cable and Broadcasting Bill. I hoped that the passage referring to definitions in my noble friend's excellent opening speech might help to mitigate these symptoms.
Listening to it does not seem to have had this effect; maybe reading it will not either. But in case in reading it—as I hope your Lordships will—you should inadvertently be misled, I must put just one gloss on what my noble friend said. The exemption from licensing for text services, such as Prestel, derives from Clause 2(6)which talks about moving pictures, and not from Clause 2(4) which deals with simultaneous two-way communications, such as video conferences. I regret that that knowledge came into my mind too late to transfer it to the paper.
Beyond that, I should have liked to refer your Lordships to the Notes on Clauses, which are now available to your Lordships, but in view of the comments of my noble friend Lord De La Warr on them I do so with some hesitation. The interaction between the concerns of the Department of Trade and Industry and of the Home Office is an area of central interest in the Bill and to my noble friend Lord De La Warr. I was grateful to him for explaining not only his interest but his expertise in cable, which I am glad to acknowledge. Perhaps I should therefore explain how the telecommunications licence and cable authority licences will inter-relate.
The telecommunications licence will authorise the running of the cable system, the provision of telecommunications services over it and the connection of telecommunications apparatus to it. My right honourable friend the Secretary of State for Trade and Industry has announced his intention of issuing licences for 12 years in the case of tree and branch systems and 20 years for switched star systems. In considering applications for licences, he will be guided by the criteria set out in Clause 3 of the Telecommunications Bill
The cable authority's licence will authorise the provision of cable television and sound services over such systems. It may also include conditions requiring operators to provide any other types of non-telecommunication services which they promise to do when applying for the licence. They will have to 559 deliver in order to keep the licence. Interactive services, such as tele-games or tele-shopping will not therefore need a cable authority licence. But if they are promised as part of the overall package, then the authority will be able to hold an operator to his undertaking.
In considering applications, the cable authority are required to take into account the criteria in Clause 6. Licences for services over the new wide band system are up to 12 years in the first instance and eight thereafter, so they will remain in step with the telecommunications licence. It is widely accepted that it is the television services which will be crucial to the economics of cable, and for that reason the cable authority will have the key role to play in deciding between competing applications.
But the Secretary of State, assisted by the Director General of Telecommunications, will have to reach his own decision on the award of the telecommunications licence, and this means that the two licensing authorities will need to work closely together. Clauses 5(4) and 17(2) of this Bill impose specific duties on the cable authority to consult the telecommunications licensing authorities.
I can assure my noble friend that if his expression arises from the difficulty of following what I have said, it will be at least a little clearer when he reads the report of it. He also referred, in particular, to his concern that the Telecommunications Bill contains no indication of the length of licences and suggested that this would undermine industrial confidence. The White Paper on cable has already made it clear that the Government intend to grant licences of 12 years for tree and branch and 20 years for switched star systems, as I have said. These periods will also be applied as appropriate to the pilot cable systems.
There are two reasons why the Government took the view that it would not be necessary or desirable to include these periods in the Telecommunications Bill. First, licensing under that Bill will cover a very wide range of systems, from the BT system at one extreme, to entry phones at the other. There is, therefore, a need for flexibility to enable licences of varying lengths to be granted, according to the different circumstances. To prescribe particular periods for cable systems would not be consistent with that approach.
Secondly, the cable industry need not fear that the Government will change the period of licences after they have started to run. The Secretary of State has no power to revoke at will, and the licences will define the term of the licences and the precise circumstances under which they can be revoked. Unless these circumstances arise, they will continue in force until the end of their specified life. The cable authority's licence will run from the moment when operators start to provide services. I can therefore assure your Lordships that the period for building the system will not count against the 12 years. I think that my noble friend Lord Glanusk was among those who raised this point. It is true that when the service does start it may not be available throughout the whole of the local area, but that is one of the factors which we had to take into account in deciding to allow a longer period for the first licence in any area than for subsequent licences.
560 As my noble friend said in her opening speech, this Bill deals with the leading edge of technological development. Indeed, the fascinating speech of my noble friend Lord Hanson will be received with a good deal more enthusiasm by viewers of "Tomorrow's World" than by potential investors in cable systems. Investors may draw comfort from the speeches of the majority of other noble Lords and, particularly from that of my noble friend Lord Mersey. The noble Lord, Lord McIntosh of Haringey and the noble Lord, Lord Hill of Luton, who were "Hear, hearing" away during the speech of my noble friend Lord Hanson, will no doubt be vastly relieved that, unlike Governments of another political complexion, we intend that the risks shall be taken by private money and will not be taken by the money of taxpayers.
Leaving aside the astringent experience of Canada and America in my noble friend's account, I think I should pick up one of his technological points. He referred to the possible advantages of MDS—multipoint distribution services. I ought perhaps to mention one substantial disadvantage of this system, which he sees as a threat in comparison with cable; that is, that it depends on the availability of frequencies for transmission over the air, and would therefore be in competition with a growing number of other services which cannot readily find alternative means of distribution. Cable, on the other hand, offers us considerable scope for the distribution of television and sound services while avoiding the constraints of increasing frequency scarcity.
The noble Lord, Lord Mishcon, the noble Lord, Lord Hill of Luton, the noble Lord, Lord Briginshaw, and many other noble Lords were concerned with the benefit that a high proportion of British material can confer on the standards of programmes and on industry. The authority has three specific obligations under Clauses 6, 9 and 21 relating to British and other European Community material. First, it must consider applicants' proposals in this respect at the licence application stage. Second, it must include conditions in the licence in pursuance of its duty to secure that a proper proportion of such material is included. And, third, it must report to the Home Secretary each year on how it has carried out its duty in this area.
The Bill, unlike the White Paper, does not talk, as some noble Lords would wish, in terms of an increasing proportion as time goes on, because this is not a concept which can readily be translated into statutory language. We have enough trouble as it is with statutory language. The obligation to make an annual report will ensure, however, that the authority keeps progress under regular review. The Government believe it would be a mistake to attempt to write any particular percentage into the Bill. I say that for the benefit of the noble Lord, Lord Ardwick. Nor is there a notional percentage. The authority, like the IBA, may decide to set particular figures for particular channels or across the whole service, but that will be for the authority to decide.
That was by no means the only concern of the noble Lord, Lord Hill of Luton. Another was his deep and, I suppose from this Dispatch Box I have to admit, healthy scepticism about the political impartiality of Ministers. This made him, like the noble Lord, Lord 561 Hunt of Tanworth, look very much askance at Clause 15 and at the question of a light touch. The noble Lord, Lord Hunt of Tanworth, looked at Clause 15 askance because he thought that it might give the authority rather sweeping powers over cable services. He acknowledged that the clause needed to be read with the other provisions of Part I of the Bill. I can confirm that the Government do not see these provisions as cutting across the light touch which we wish to encourage. The authority will not normally pre-vet programmes, but it is obviously sensible that it should, and there are occasions when it can, under the Bill, have the power to intervene before the event if it has reason to believe that an operator is about to break the terms of his licence.
I can assure the noble Lord, Lord Howard of Henderskelfe, that the requirement in the Bill that the cable authority should do all that it can to secure certain things, which first occurs in Clause 7(1), is not without precedent. Indeed, exactly the same words appear in the Broadcasting Act in relation to the IBA's duties to control its programme contractors. The justification for the words in the Bill is exactly the same as in relation to that Act. The requirement is a strong one. The authority will be failing in its duty if it does not do everything in its power to secure the objectives set out in the Bill.
The noble Lord, since I mentioned him, referred to possible difficulties over the theft of pay television services. The Government are aware of this difficulty and are considering whether there is a need to bring forward additional provisions during the passage of the Bill. The noble Lord, Lord Hill of Luton, referred to the possibility that political advertising might be introduced on the say-so of the Minister. I return to that point. The position for cable is exactly the same as for independent television and local radio under the Broadcasting Act. Any such development could happen only following a resolution passed by both Houses of Parliament and subject to such terms and conditions as Parliament might determine. The noble Lord will find the provisions in Clause 11 of the Bill.
Noble Lords were interested in the restriction of ownership of cable. The White Paper spoke of excluding local authorities and religious and political interests from having a stake in cable operation. The right reverend Prelate was the first to raise this issue. It would have been difficult to provide in the Bill that there should be an absolute prohibition on their having any shareholding, however small. Clause 7 therefore prevents them from controlling a cable company, but where they merely have shares in it, it will be for the authority to ensure that the shareholding will not lead to results contrary to the public interest. This will leave to the authority discretion to determine when such a shareholding is too large. If it is not too large the authority will be free to grant the licence. If it is too large, it will not do so.
To continue with the interest of the right reverend Prelate and the noble Lord, Lord Hunt of Tanworth, in religious broadcasting, I would say that the Hunt Report and the Government's White Paper make it clear that there would be a place for religious and political programmes on cable. So far as whole channels are concerned, the authority will have some 562 discretion. Clause 10(3) imposes an obligation on the authority to prevent undue prominence being given to any one view and to exclude any expression of licensees' own beliefs. This is slightly more flexible than the White Paper proposed, partly because the concept of a channel is not one which the Bill uses. Political advertising is banned, as it is from ITV and independent local radio, under Clause 11(2).
Religious advertising is not ruled out, but I am repeating myself a little. The code has to be acceptable to the Home Secretary. It is not the Government's intention to permit unrestricted paid advertising of religious views on cable. By relying on the code rather than on statutory rules, it should be possible to allow, for example, factual advertising of religious events and activities while preserving safeguards in more sensitive areas. I can tell the right reverend Prelate that Clause 7(3) allows religious participation in ownership but only if it does not, and only if it is not likely to, lead to results which are contrary to the public interest. The same goes for local newspapers. This seems to leave the authority with a proper measure of discretion in the matter. Clause 9(1) gives the authority the same duty as the IBA concerning taste and decency. Clause 10(1) goes further than the White Paper in requiring the authority, like the IBA, to draw up a code on the portrayal of violence and programme standards generally. Clauses 24 to 26 and Schedule 2 make the necessary amendments to English, Scottish and Northern Irish law to make cable programmes subject to the criminal law on obscenity. Incitement to racial hatred by cable will also be an offence under Clause 27. We believe that this constitutes an effective set of safeguards against undesirable material on cable.
§ Lord Mishcon
My Lords, I rise to intervene only because I did not raise this point in my speech since I thought that it was long enough as it was. However, in the racial incitement clause, which is very important, I notice that the only word used is "words". Pictorial display is not mentioned. This is a very menacing form of racial hatred. I ask the noble Lord not to deal with the point now but to look at it, since it would save an amendment at the Committee stage if I happen to be wrong.
§ Lord Elton
My Lords, the noble Lord has suavely lengthened my speech by means of not lengthening his own. It is a Committee stage point, but if I receive an answer before I sit down I shall refer to it. Still on kindred subjects, I revert to what the noble Earl, Lord Halsbury, said on the Obscene Publications Act. I want to assure the noble Earl that it is unnecessary to amend the Bill in order to attract any amendments to other legislation cited in it. They will still be attracted to the Bill in its revised form, if it is revised after its passage and enactment. While, therefore, I recognise the noble Earl's close interest in the subject, I hope that he will not feel it necessary to deploy his formidable and imaginative powers on the Bill, which may well be complete before we have come to a final conclusion on what the proper treatment of the other Acts should be, and that he will reserve his fire for that more distant occasion.
§ Lord Elton
My Lords. I am sure the House will share my grateful acknowledgement of that assurance. I can now assure—rather sooner than I expected—the noble Lord, Lord Mishcon, that Clause 27(10) has to be interpreted as meaning that "words" means pictures. The noble Lord may ask me to justify that statement later; I could not do so now.
In drawing to a conclusion, may I say to the noble Lord, Lord Howard of Henderskelfe, that the authority will be able to consider any complaints from the public relating to the conditions in the operators'licences—for example, complaints about programme standards. In addition, the authority will under Clause 14 he able to deal with complaints about unfair or unjust treatment in programmes or infringements of privacy committed during the preparation of programmes. Clause 14 bears a resemblance to some of the powers relating to the Broadcasting Complaints Commission, but the Government thought that the balance of advantage rested with not extending the commission's jurisdiction to cable.
Many of the arguments which led to the establishment of an independent commission for broadcasting—and this point interests a number of your Lordships—do not apply to cable, where the cable authority (unlike the BBC and the IBA) will not themselves he providing the services. Complaints may form a significant part of the public feedback to the authority about their licensees and it would not be desirable to hive off one category of them to another body. It will be for the authority to determine their own procedure for handling complaints. Once they have arrived at an adjudication, Clause 14 gives them the power to direct their licensees to publicise their findings in such a way as they—the authority—may specify.
That is as much as the clock and convention permit me. In the New Year we shall be able to examine the Bill in more detail. The House and the Government will consider your Lordships' detailed views with the greatest of care. In that, may I ask of your Lordships one very important piece of co-operation? It will do a great deal to enable the Government to give satisfactory responses to amendments if they are put down in good time. By "good time" I mean time enough to give at least three working days between publication of the amendment in print in the Printed Paper Office and the day on which it is taken in Committee.
The volume of work which I and officials are likely to have to do during Committee stage makes three full working days the minimum, and I do hope that your Lordships will give it to us. Copies of the Notes on Clauses are available in the Printed Paper Office and I believe your Lordships will find large parts of them extremely helpful. I hope that they will assist noble Lords in preparing for further deliberations.
I believe that the proposals in this Bill provide a sensible framework for the development of new cable and satellite services. I am grateful to all noble Lords who have given it a welcome. I regret that, in looking around, I catch the eyes of noble Lords whose names I have not mentioned—both friends and not-so-friends. But I intend no discourtesy; their views will be taken careful account of in our reading tomorrow of Hansard. I am grateful to all your Lordships who have 564 given the Bill a welcome and to the rest of your Lordships as well. I beg to move.
§ On Question, Bill read a second time, and committed to a Committee of the Whole House.