Equity

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July 2002

Culture, Media & Sport Committee: BBC Charter Renewal

Introduction

• Equity welcomes this opportunity to contribute to the discussions surrounding the review of the BBC's Charter. As the trade union representing 37,000 performers and creative personnel, we recognise the importance of the BBC in our society. The BBC is our most significant employer and it plays an integral role in both the audio-visual environment and as a community focus for the United Kingdom.
• The BBC is one of four public service broadcasters in the United Kingdom, but it is arguably the most important. Each channel has a role to play in the public service television broadcasting ecology by providing a focus for communities, educating the public, and providing a shared sense of heritage. However, the BBC has a freedom to lead the other broadcasters on matters of standards, innovation and diversity only because of its unique source of funding. The BBC has a key cultural role within the UK - by setting programme standards and bridging the gap between the information-rich and the information-poor, as more quality programmes are drawn to subscription channels - it continues to be our main public service broadcaster.

What scope and remit should the BBC have?

• The BBC is much more than a broadcaster. It is part of our society, it showcases the United Kingdom to the rest of the world, it plays a crucial role in our economy, both as an employer and an exporter of goods, and it acts as a standard bearer for the audio-visual sector in terms of quality, diversity, and innovation. Equity values each of these roles and recognises that it is able to fulfil each of them only because of its unique funding structure.
• Equity believes that the BBC should retain both its television and radio responsibilities. While a recent report by the Broadcasting Policy Group recommended their separation into two distinct arms, we believe that there are significantly advantages in these functions to remain together. This dual broadcast responsibility is important for its role in setting standards for other public service broadcasters. This standard setting role should not be undervalued because without the BBC, we believe that viewers and broadcasters alike would suffer.
• While we will concentrate on genre diversity below, the role of the BBC in television and radio is incredibly important. As cited above, it has a wider role in setting standards, and bringing together communities. Additionally, it has a responsibility to experiment in programme production.
• The BBC also has an important role in sustaining the independent production sector. Without the BBC's investment and commissioning, the UK's production base, which also serves the UK film industry, would not be as strong as it is today. Even with the scaling down of BBC film production, its television production has supported the industry and benefited their in-house production. There does not appear to be any comparable investment by other broadcasters and in the case of channels only available through Sky, there is no indication that they ever intend to match this level of investment.
• Crucially for Equity members, the BBC is the most important employer and trainer in the audio-visual sector. It has provided a consistent source of employment in a variety of programming, both audio and visual, and heavily invested in the training and development of the industry. Despite increased efforts of the other public service television broadcasters through Skillset to invest in training, the BBC continues to far outstrip them in financial commitments and training opportunities.
• Equity would like to see the BBC retain its commitment to programme making in and for the Nations and regions. The BBC and ITV are the only public service broadcasters to make programming specifically for different national and regional boundaries. While Channel Four and Five share a commitment to produce a proportion of programmes outside the M25, the BBC and ITV the only channels that offer programmes for the viewer made in the region for the region they live in. Regional programme production should not be confined to news and current affairs. It should include drama and comedy for example, even if the broadcast is restricted to the region it is produced in. In this latter regard, the BBC falls short of meeting these commitments in a number of regions, but particularly in Northern Ireland.
• During the debate surrounding Charter Review, some commentators will inevitably argue that the BBC should not be obliged to provide 'something for everyone'. This has long been a core feature of public service broadcasting and one consistently identified throughout Government and regulator inquiries and research. While the initial reasons for this requirement on public service television broadcasters have long gone, with the event of more channels and now new platforms, it is still very important. This is most evident for those who cannot afford to pay for subscription channels.
• Equity believes that it is inevitable that there will be some overlap of output with other broadcasters, and we would argue that this does not matter. As long as the programming is of the highest quality and offers alternatives that challenge other broadcasters within genres, viewers will be able to access a range of programmes and that is the most important measure for the BBC.
• Prior to digital switchover, there will be individuals who actively choose to receive only those channels available on analogue. Recent research by the Department of Trade and Industry suggested that 13% intend never to switch to digital, while a further 29% would do so when there was no other choice. Additionally, there will be those people who cannot afford to subscribe to channels or those that prefer linear viewing. If the BBC and other public service television broadcasters cherry-picked genres rather than providing programming for all, it would effectively exclude minorities, economic and geographically-difficult viewers. Additionally, while many niche channels continue to provide only poor quality cheap programmes that are broadcast on a repeated loop available by subscription only, there would be no justification for the BBC to streamline its programme provision.
• Equally, it should not be the BBC's responsibility to only provide for genres in the public service environment not produced by commercial public service broadcasters. This would risk ghettoising the BBC and prevent it from setting standards for all broadcasters. Equity believes that the BBC is at the core of PSTB, and as such it is important that it should be allowed and encouraged to continue its range of programmes and be supported by the Licence Fee. We believe that the BBC should set standards for all broadcasters, whether or not they have public service obligations and that they have a greater responsibility to the broadcasting environment because of the privileges of the Licence Fee.
• BBC Radio has demonstrated that their unique system of funding alongside their public service obligations can result in the production of high quality programming not available anywhere else. BBC Radio produces a variety of programming across its channels, and continues to provide the United Kingdom with the finest radio broadcasting system in the world. Through BBC Radio, the United Kingdom is able to access a consistent choice of high quality programming across genres such as drama, comedy, music, schools, sport, education, arts, sciences, news and current affairs, not found on any other radio station.
• This dedication to diverse genre provision is most evident in drama programmes. Drama programmes, including the single play, continues to excel and to push the barriers of imagination on radio. The initiatives with children's programming on BBC 7 have brought a new and growing audience of children. Radio is an important educational tool, and Equity welcomes the BBC's commitment in this area. Additionally, the BBC's support across a range of music is significant. Listeners are able to access classical, pop, middle range, jazz, folk music and the world music the choice is outstanding. It should also be noted that BBC support of orchestras, singers, new and established composers, the proms and live concerts around the UK makes a major contribution to this important aspect of the culture of the nation.

How should the BBC be funded?

• Equity believes that, despite it imperfections, the continuation of the Licence Fee is essential for the survival of high quality, diverse and original public service programming on the BBC. We believe that without the Licence Fee, the BBC would be unable to continue to meet its public service obligations. It would not be able to act free of market concerns and trends and it would be forced to react to developments in the way the commercial PSBs have had to do repeatedly over the last five years. Operating in a market-orientated environment would put a huge strain on the BBC (and the commercial broadcasters) and we do not believe that any of the alternatives suggested by commentators would allow the BBC to be as significant and respected as it is now.
• If further convincing were necessary, the Government only needs to look at the experiences of other countries to see the possible implications of changing the BBC's funding. ABC in Australia, TVNZ in New Zealand, CBC in Canada and PBS in the United States are all poor examples of public service television broadcasting when compared to the BBC. These channels are forced to weather advertising slumps, seek sponsorship, raise money through telethons or beg Government's for public subsidy. As a result, they fail to live up to their potential and are often criticised for poor, unimaginative programming or worse, that their editorial independence is questioned.
• Additionally, a recent report by Oliver & Ohlbaum Associates called UK Television Content in the Digital Age identified that redirecting BBC funding may increase commercial audiences but the consequent pressure on airtime prices would limit actual revenue increases for commercial broadcasters. As commercial broadcasters recycle a lower proportion of revenue into original production, the net effect would be to lower the overall level of domestic content investment in the UK market. Additionally redirecting existing or new public funds to commercial broadcasters to subsidise high cost genres could result in these funds being distributed to shareholders or new ventures which do not rely on quality, home-grown programmes, effectively crowding out new commercial investment.
• Public service broadcasting often relies on broadcasters to act in a way in which the private sector, left unregulated, would not. While the Communications Act defines that those obligations should be, it is only the BBC without the concerns of shareholders or failing advertising prices that can truly embrace them. In doing so, it provides a standard of programming that the commercial PSTBs can measure themselves against and other commercial broadcasters can aspire to meet. It has only been able to do that because it operates in a mixed broadcasting economy, using significant public investment in the form of the Licence Fee.
• We have detailed below our consideration of each of the proposed alternative funding possibilities for the BBC. It is important to consider the experiences of other countries when considering these alternatives.

a) Advertising:

Advertising is being spread among more and more broadcasters, and it is still suffering from the effects of an economic downturn. ITV reports an 18% downturn in advertising since 2000. It makes no sense for the BBC to share a diminishing source of revenue, especially as it is likely to result in irreparable damage to all broadcasters. As well as reducing Channel 4's ability to produce high-quality programming, introducing advertising to the BBC threatens the quality and diversity of BBC programming. Producers would seek programmes generating high audiences to ensure high advertising.

b) Sponsorship:

Programmes would become reliant on their sponsors and editorial values could be threatened. The risk of sponsorship withdrawal would make planning for the future less certain and is likely to result in a decrease in worldwide recognised quality of programming.

c) Subscription

Making the BBC a subscription only service will create a number of problems. Firstly, while the Broadcasting Policy Group may consider that the BBC will be able to offer a selection of packages of their services, we believe that for the current television services to be financially viable, they would need to be either sold as a group or part of a bundled package with other broadcasters. The latter would cause problems for European audiovisual regulations. Additionally, it is likely to cost viewers more than the current Licence Fee to access these services, if the current quality and range levels are maintained. At present, figures show it costs £4 to collect the BBC Licence Fee per head, compared with £24 per head to collect one year's subscription to BSkyB. This would be reflected in any subscription costs. If the Licence Fee were to supplemented by subscription this would also increase the burden on viewers, including those poorer people, who would be deprived of the full range and quality of the BBC, which would otherwise be universally available. Finally, we are unsure as to how this approach could be applied to radio services. It would mean separating the BBC into radio and television organisations and we believe that in order for them to continue to produce a range of high quality programming, they need to operate together.

d) Combination of Commercial and Public Funding:

If the BBC was funded by a licence fee and commercial funding, future European rules could turn the BBC into a ghettoised public service, providing a limited range of "worthy" programming equivalent to PBS in the USA.

e) PSB fund - 'Arts Council for the Air':

Some commentators argue that the Licence Fee money could be made available to other broadcasters to produce 'worthy' programming. We are concerned both about how that 'worthy' programming will be judged, and also how the BBC could continue to act as a public service broadcaster is any of the Licence Fee was diverted away from it. If the intention were to ensure that money is made available to the industry as a whole, Equity would argue that this is already the case through the BBC's independent production obligations. This in effect means that independent production companies are able to pitch for Licence Fee money. One other issue to consider would be the fate of advertising revenue earned for advertisements placed around a programme that has been produced using money from the fund. It would be difficult to agree that this money should not be returned to the fund, but should instead be absorbed by the commercial broadcaster. We would also be concerned that any body created to administer a PSB fund would result in another level of bureaucracy that all broadcasters would have to accommodate.

Furthermore, we believe to enable innovation and allow the BBC to fulfil its Public Service remit, the Licence Fee should rise by above RPI annually with concessions to certain sections of society such as the old and the disabled. Any concessions need to be revenue neutral to the BBC, be perceived to be fair by the public, but also affordable in terms of administration and finite.

How should the BBC be governed or regulated and what role is there for Ofcom? Is a 10 year Royal Charter and Agreement with the Secretary of State the most appropriate regime for the BBC?

• Equity considers the Royal Charter to be the most effective way to sustain unique nature of the BBC. We believe the Charter provides the BBC with independence that could otherwise be compromised.
• With regard to the regulation of the BBC, we would advise against incorporating the Corporation under the remit of Ofcom. This regulator is new and untested, and it already has significant responsibilities in the telecommunications and broadcasting sectors to get to grips with. We believe the additional pressure in regulating the BBC at this stage would be too much and therefore unwise. Unless therefore, the Government can propose an alternative, Equity considers the BBC should remain under the regulatory control of the Board of Governors.
• However, this does not mean that the Governors should remain untouched. Instead, we believe a lot can be learned from the debates surrounding the creation of Ofcom especially regarding transparency. We consider there is a need for a greater clarity of the role and function of the Governors, and that they should be separated from the day-to-day functions of the BBC. However, we do believe that there is some value in the Governors having a professional background, including some experience of managing a large business. Additionally, the amount of information available about the decisions and working policy of the Governors should be increased as an overall strategy to be more transparent in their operation.

On behalf of Equity: Kelly Wiffen, Research and Parliamentary Officer 020 7670 0260

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