Broadcasting White Paper: The Government’s Vision for a “New Golden Age”

On 28 April 2022, the government released its long-anticipated broadcasting white paper setting out its vision for the future of the broadcasting sector and its plan for ushering in a “new golden age of British TV”. The paper follows recent recommendations by Ofcom that the government radically overhaul laws relating to public service media, as well as a series of public consultations in 2021. It addresses a multitude of proposed reforms, including:

1. Revised prominence regulations for public service broadcasters (“PSBs”)
2. New regulations for video-on-demand services
3. Changes to the listed events regime
4. Radical changes to the public service broadcasting sector, including the proposed sale of Channel 4, changes to the BBC funding model, and broader reforms to the remit of PSBs.

If implemented, the proposed changes would have far-reaching consequences, affecting not only the broadcasting sector but also the wider content industries.

While the above significant reforms are discussed below, these represent merely a sample of the numerous policies covered in the white paper. For example, as briefly discussed below, the white paper also touches on various updates relating to the radio sector as well as a potential review of independent production status.

Revised Prominence Regulations

Current broadcasting legislation guarantees prime positioning in mainstream linear electronic programme guides (“EPGs”) to a specified list of public service channels (noting that not all channels operated by PSBs are “public service” channels). This so-called “prominence” framework is achieved for linear broadcasting through Ofcom rules that apply to a list of “Regulated EPGs”. As a matter of practice, these rules fundamentally overlap with separate provisions in the Communications Act 2003 that require PSBs to “offer” and certain “Appropriate Networks” to “carry” the public service channels.

The present prominence framework does not extend beyond linear to PSBs’ other services such as on-demand services, however. The white paper flags this as a challenge for PSBs, who are “finding it increasingly difficult to secure their presence on global platforms, maintain their prominence on those platforms, and secure fair value for the services they provide.”

Pointing to the growth of the online sector and the increasing disparity between traditional TV platforms and new services, the white paper promises the introduction of a new prominence regime for on-demand television to ensure public service content remains available and easy to find. The regime is expected to be wider both in terms of the list of PSB services covered (presumably linked to the government’s intention to give PSBs greater flexibility to fulfil their public service remits, as discussed below) and also the platforms that will be bound (the white paper references smart TVs, pay TV operators and global TV platforms). As now, the platforms will be designated (presumably by Ofcom) and will be those “used by a significant number of UK viewers as a main way of watching television content on-demand”.

The white paper also refers to a requirement on PSBs to “offer” their “designated” on-demand services to these platforms and for the platforms to “carry” those services. Although not clear from the white paper, the implication is that these requirements will formally align with the new prominence regime outlined above.

It is worth noting that the existing prominence and must carry obligations are not fully aligned, with the former applying to an exhaustive list of “Regulated EPGs” and the latter applying to an open category of “Appropriate Networks”. The result is that, in theory, a platform could be required to carry the specified public service channels but not required to comply with the current prominence regime. Although not currently a problem in practice, the wider scope of the the newly proposed on-demand prominence framework could lead to anomalies if the two regimes are not properly aligned.

The new regime will be enforced by Ofcom, which will develop and maintain guidance for the new framework and be given dispute resolution powers to support effective negotiations. Potential areas of dispute could focus on technology costs and access to data.

VOD Regulation

Another acknowledgement of the need for digital-related reforms relates to video-on-demand (“VOD”) service providers. The government has set out a broad-brush plan for narrowing the gap between the regulation of traditional broadcasters and VOD service providers, with the stated aim of ensuring consistent obligations irrespective of method of content delivery and bringing major service providers who target and profit from UK audiences but who currently operate outside of UK regulation under Ofcom jurisdiction. The plan reflects the government’s response to the consultation on audience protection standards on video-on-demand services, which was published alongside the white paper.

While the proposal is light on detail, it includes Ofcom being given powers to draft and enforce a new Video-on-demand Code similar to the existing Broadcasting Code but tailored to the specific context of VOD. This will only apply to the “largest and most TV-like” VOD services (interestingly, to be designated by the Secretary of State rather than according to specific criteria), and so will impact a much smaller group of services than the current on-demand programme services (ODPS) regime. Notably, smaller VOD services are anticipated to be exempt from the new regulations, with the white paper describing them as “lower risk”. The extent of the regulatory harmonisation is unclear from the white paper as it refers both to ensuring these services are subject to the same or similar obligations as broadcasters as well as to a “light touch” regime. Importantly, age ratings, PIN codes and warnings will not be compulsory.

The white paper also signals one step that may be quick to implement: currently only TV services appearing on a “Regulated EPG” are licensed and regulated by Ofcom. The government intends to designate more EPGs as “Regulated EPGs”, bringing more internet delivered services under the regulation of Ofcom. This will not require new primary legislation.

Changes to Listed Events Regime

The white paper also sets out proposed reforms to the existing listed events regime as part of the suite of changes aimed at ushering in a new era of public service broadcasting.

The current listed events regime seeks to prioritise free public access to certain key events, divided into Group A events and Group B events. Where rights to a listed event are made available, the regime requires that free-to-air channels reaching 95% of the UK population must be given the first option to purchase: (i) for Group A events, full live coverage rights; and (ii) for Group B events, secondary coverage or highlights. While broadcasters are not obliged to purchase these rights, the regime effectively supports free access to events of public importance.

In practice, however, all services that currently qualify for the listed events regime are operated by PSBs. In this context, and in keeping with its professed goal of consolidating the remit of PSBs, the white paper outlines the government’s plan to look at making the listed events regime a PSB-specific benefit.

Perhaps more significantly, the white paper signals the government’s intention to review whether the scope of the listed events regime should be extended to include on-demand rights. It notes that the underlying purpose of the listed events regime (promoting free public access to important events) may be undermined in practice if, for example, due to an event being in a different time-zone, live coverage is available free-to-air on a PSB’s linear service during the middle of the night (by virtue of the current regime) but on-demand rights (which would enable viewing during waking hours) are acquired by a digital platform that operates a paywall or that does not have wide coverage across UK households. The review represents another acknowledgment by the government in the white paper that existing legal and regulatory frameworks require updates to account for the growing significance of the digital market.

Sale of Channel 4

The white paper confirms the government’s highly controversial plans for the sale of Channel 4.

Channel 4, which began broadcasting in 1982, is a self-financing public corporation that generates the majority of its income from advertising. In the white paper, the government acknowledges Channel 4’s significant commercial success to date but notes that past financial performance does not guarantee future sustainability in a changing market. It argues that Channel 4’s public ownership model is poised to become a significant constraint on the broadcaster’s ability to compete, pointing specifically to the prohibition against Channel 4 producing its own content (the so-called “publisher-broadcaster restriction”) and the limitations on its access to capital.

The proposed sale has generated a storm of commentary, with Labour MP and Shadow Secretary of State for Digital, Culture, Media and Sport Lucy Powell and others, such as the Liberal Democrats, going so far as to call it “cultural vandalism”. In February 2022, several Tory MPs published an open letter to the government warning against the sale of Channel 4, with the simple message: “Channel 4 isn’t broke, and doesn’t need fixing”. The government’s own public consultation on the change of ownership of Channel 4 received just shy of 56,000 responses to the question of whether Channel 4 should be privatised – an indication of the extent of the sector and the general public’s interest in the issue. Of these responses, 96% were against privatisation.

The white paper seeks to address many of the concerns raised in the public consultation process. For example, it rejects claims that the publisher-broadcaster restriction is vital to ensuring the continued success of the independent production sector, highlighting the government’s commitment to update the “terms of trade” regime, the independent production quotas which apply to all PSBs, and the relatively small contribution of Channel 4 to sector revenues compared to PSBs generally and in the context of sector revenues as a whole.

Despite addressing some concerns, for the most part, the white paper radically underplays the outcome of the consultation process. It briefly alludes to a “substantial number” of negative responses, but fails to clearly address the overwhelmingly negative response to the government’s privatisation proposal. It also fails to acknowledge Channel 4’s own suggested alternative to privatisation, called “4: The Next Episode”, put to the government prior to the release of the white paper. The plan includes an adjustment to the scale of Channel 4’s London headquarters, the doubling of staff working outside the capital to nearly 600 by 2025, and a major increase in expenditure on TV shows commissioned by production companies outside of London (a move the channel claims would create at least 3,000 jobs), and was described by Channel 4 as “a real alternative to privatisation that would safeguard its future financial stability, allowing it to do significantly more for the British public, the creative industries and the economy, particularly outside London…”

Changes to BBC Funding Model

The white paper reiterates the government’s highly publicised (and hotly debated) decision to freeze the price of the BBC’s TV licence fee (the foundation of its funding) at £159 for two years and thereafter to rise in line with inflation from April 2024, to “support households through a difficult time”. This effectively represents a significant cut to the BBC’s budget.

More broadly, the white paper foreshadows the government’s plan to fundamentally review the licence funding model itself – which review Secretary of State for Digital, Culture, Media and Sport Nadine Dorries has said is to be announced “very shortly” . This represents an extension of the government’s stated goal to help the BBC diversify its income streams and become less reliant on the licence fee, also reflected in its agreement to increase the BBC’s commercial borrowing limit from £350 million to £750 million (pending the agreement of appropriate oversight mechanisms). The white paper also flags the government’s ongoing concern regarding the use of criminal sanctions to enforce the licence fee, citing the disproportionate impact on women (74% of people convicted for TV licence evasion in 2019 having been women), the potential impact on vulnerable elderly people with the end of the free TV licence concession for over-75s, and the general unfairness of the sanctions. The comments underscore the potentially broad scope of the government’s plan to review the licensing model.

Additional PSB Reforms

As a general matter, the government does acknowledge that PSBs remain vital in the modern media age and outlines a number of high-level reforms it intends to make to their remit. These include:

• replacing the “outdated” set of fourteen overlapping PSB purposes and objectives with a “new, shorter remit”;
• giving PSBs greater flexibility in how they deliver their remits, implying that content made available on a VOD basis will count towards quotas;
• consulting on embedding the importance of distinctively British content into the existing quota system;
• clarifying the importance of programmes broadcast in the UK’s indigenous regional and minority languages in legislation; and
• updating the arrangements surrounding S4C, including revising its remit to include digital and online services and remove current geographical broadcasting restrictions.

The white paper lacks detail on these proposed reforms, particularly with respect to the scope and content of the “new, shorter remit” for PSBs. This reform – which would be substantial – is only referenced twice in the 42-page report.

Other points of note

The white paper touches on many of the views and intentions discussed by the government in its response to the Digital Radio and Audio Review (published alongside the white paper), including the government’s acknowledgement that a switch off of FM services should not take place until at least 2030 and a variety of reforms to be implemented “when parliamentary time allows”. These reforms include:

• removing outdated character of service requirements (such as music formats);
• reforming rules on where local radio programmes are produced;
• strengthening requirements relating to local news and local information services (including the protection of local news on digital platforms);
• updating legislation to “help encourage the ongoing transition towards digital radio” and
• giving effect to the conclusions of the 2017 consultation on radio deregulation (including allowing Ofcom to license radio services based in the Republic of Ireland and other countries designated by the DCMS Secretary of State).

As in its fuller response to the Review, however, the government flags a need to further engage with the radio sector on several fronts. For example, the white paper announces the government’s plan to consult in 2023 on new proposals to support the community radio sector.

Beyond radio, the government also plans to initiate a review of independent production status, noting the rise of “super indies” (often larger than the commissioning broadcasters) who nevertheless benefit from the indie quotas. There may be a revenue cap in order to achieve qualifying independent status.

Comment

While the government’s broadcasting white paper sets out clear intentions regarding the future of the sector, it’s unlikely that the practical impact of many of these intentions will be realised anytime soon. There is also scant detail on many of the topics covered, even though several of them have been the subject of government and Ofcom debate for many years now.

To enact many of the reforms outlined, the government must first draft, present, debate, and pass legislation formalising its plans. Given the white paper itself is a high-level document (a mere 42 pages) with little detail in the build of the various proposals it touches upon, it would seem there may be some distance to travel before a bill can be issued. Having said that, the Lobby Pack released in connection with the Queen’s speech on 10 May 2022 referred to a Media Bill and so we assume that a draft will be forthcoming this year.

Even then, doubt abounds over whether the government can rally the political support required to pass the legislation, and if passed, there may be practical obstacles to implementation. There is a risk, for example, that changes in Government may result in a policy reversal.

Ultimately it remains to be seen whether the high level reforms proposed by the government in the broadcasting white paper will be implemented – and if they are, whether they will in fact “level up” the UK broadcasting sector.