Communications: Digital Britain

We exchanged pleasantries over pastries, my Lords, and had a broad and far-ranging discussion about the future of the communications industries. We touched on some of the broad themes that one would touch on in the introduction to any discussion on this industry, which the noble Lord will know as well as, if not better than, me. The noble Lord would have been pleased to see that we were assiduous in following what one participant described as the analogue parliamentary convention; namely, that these things should not be discussed before they are presented to the House, and rightly so. He can be assured on that question. On the substantive question around the second public service organisation, I divine a slight sense of frustration from the noble Lord, Lord Fowler, and other noble Lords about the wording in the document and a yearning desire for clarity. Believe you me, no one has that desire more than I. We have chosen the words carefully because, at this stage, we are right to. What do we know for certain? We know that Channel 4 exists today as a statutory corporation funded almost entirely by advertising revenues. We also know that, on any independent analysis, that business is facing significant short-term and medium-term challenges. We also know—the noble Lord, Lord Clement-Jones, made this point—that having competition to the BBC is desirable. That is a generally held view, which this Government endorse. Therefore, the question is how you evolve from where you are to something that has scale and earns its money, its profitability and its revenue from things other than just broadcast advertising, given what is happening to that market structurally and cyclically. To do that, there are a number of options, some of which involve other what might be described as publicly owned assets and some of which might involve a contribution from the private sector. In the report, we are clear that there is a case for the creation of a new second player in the market, which is a public-service organisation in terms of its remit. However, the way in which it would be constructed and its funding models is work that needs to be done between now and May and June. We are absolutely open to people’s views on that. We have detailed analysis from Ofcom, although that is, by its nature, policy-based analysis rather than financial-based analysis. But when you are moving to the point of conclusion, the financial-based analysis is as important if not, in truth, more important. That is the next stage to which we are moving.