296.  This report has argued for a system of media regulation which as far as possible provides a range of voices and prevents one voice from becoming too powerful. We believe that the Public Interest Test alongside competition law provides important safeguards for the public and can be further strengthened. Nevertheless this report also shows how over the last 25 years consolidation has meant a greater concentration of ownership. We have also seen international media companies develop with control being exercised outside the UK and the emergence of vastly powerful global internet companies who are not necessarily subject to domestic regulations. No one can tell how this process will develop over the next 25 years: as Rupert Murdoch told the committee in New York the state of the news media is "fairly chaotic". Many of our witnesses thought that news provision would come under even greater pressure leading to less diversity and virtually everyone agreed that the next years would be challenging for newspapers, radio and television. In facing this challenge the UK has one immense advantage—public service broadcasting.

297.  The PSB channels are the BBC and channels 3 (ITV), 4 (Channel 4) and 5 (Five). The essence of public service broadcasting is that the broadcasters receive public support in return for undertaking certain programming commitments. This public support takes several forms; in the case of the BBC there is the licence fee which amounted to nearly £3.25 billion pounds of income in the financial year 2006-2007 (the BBC also benefits from other forms of support). For the commercial PSBs support includes free or cheap access to the limited analogue spectrum which reaches the great majority of UK households. In addition they benefit from reserved digital capacity as well as due prominence on Electronic Programme Guides. In return for this support each channel has a slightly different set of obligations covering a range of programming from news to sport and children's programming to locally produced content.

298.  It is these channels that still provide the main source of news for most people. A 2007 survey for Ofcom's latest review of PSB show that: 53% of the public still use the "main channels"[111] as their main source of news about the UK; 49% use them as their main source of news about the world and 56% use them as their main source of news about Scottish, Welsh, Northern Irish and regional events [112].

The BBC

299.  The cornerstone of our PSB system is the BBC. BBC news was seen by many witnesses as setting the benchmark for quality in the UK and internationally. Andrew Neil, a media commentator and editor of The Sunday Times from 1983 to 1994, stated that "the BBC is vital to the diversity of our media" (Q 1705). The BBC's role in producing foreign news was particularly emphasised. Witnesses told us that the BBC is the only UK news provider that does not heavily rely on news agencies for foreign news. David Schlesinger, the Editor-in-Chief at Reuters, told us that "if I were starting out in the business wanting to be a foreign correspondent, the only places I would look would be to AFP, Reuters, the BBC and maybe one or two others" (Q 1592). Mark Thompson, the BBC's Director-General, told the Committee that the BBC is recognised as one of only a few news organisations capable of foreign news gathering (Q 1274).

300.  The BBC is also greatly admired in the US. When we visited the US Mark Whitaker, the Senior Vice President of NBC News, told us that the international leader in foreign coverage is the BBC. CNN viewed the BBC as an excellent model for serious news reporting. The Editor of The Washington Post told us that as serious news was diminishing on many US platforms, US citizens were turning to the BBC website for serious news. Professor Rosenstiel, the Director of the Project for Excellence in Journalism, suggested that there will always be a need for institutions that can spend money on covering stories such as Iraq but that in the future only the big players such as The New York Times and the BBC will continue to be able to do that.

301.  The strength of BBC news is its reporters and those that support them. Between them they provide a depth and range of news which is among the best in the world. We believe that nothing should be allowed to reduce the BBC's ability to sustain this high quality news operation.

302.  We are therefore concerned that the BBC is undertaking a raft of job cuts, many of which are in its news section. These job cuts were announced on 18 October 2007 as part of a strategy called "Delivering Creative Futures". The BBC stated that the six year plan would result in 2,500 post closures and a net loss of 1,800 jobs, or around 10% of the workforce. The BBC claims it will deliver "More weight to Journalism, knowledge, UK drama, comedy, arts, children's and less weight to entertainment, movies, acquired programmes and light factual" (p 302). Mark Thompson said that the number of journalists would be reduced by 400 from 7,200 to 6,800 (Q 1257).

303.  Shortly after the cuts were announced Mark Thompson told us that the cuts were necessary because in the most recent licence fee settlement the BBC had been awarded £2 billion less over the next six years than it had hoped for (Q 1252). He insisted that although the total number of journalists was going to reduce, this would not affect news gathering, and overall the proportion of the licence fee spent on journalism as a whole would go up over the period (Q 1256). He went on to explain that "the combination of new technology and some opportunities we have not just to reduce duplication … but also to look at the way we create our news programmes across television, radio and the web, together mean that we can deliver the same or higher quality of journalism with somewhat fewer people" (Q 1256).

304.  However this view has to be contrasted against those of others at the BBC including the presenter Jeremy Paxman. Mr Paxman delivered the MacTaggart Lecture at the Edinburgh Television Festival in 2007. During that lecture he said that "On Newsnight over the last three years we've been required to make budget cuts of fifteen percent. We have lost producers, researchers and reporters. Nor can we make the films we once made. Now we're told we are likely to have to make more cuts: at least a further twenty percent over five years. It is unsustainable, and I cannot see how the programme can survive in anything like its current form if the cuts are implemented". Mark Thompson responded to this by saying that the cuts were substantially less than Paxman had feared (Q 1277). We are very sceptical about Mr Thompson's assertion that Newsnight, and other flagship news programmes, will not suffer as a result of the cuts. It is clear that the belief of those producing Newsnight is that it will suffer, and already has suffered.

305.  We were particularly concerned that the BBC is choosing to make cuts in journalism which in our view would inevitably affect the quality and depth of news and current affairs provision. The evidence we reviewed in chapter two showed just how under pressure news provision is and how cuts are being made in foreign news operations. These industry-wide cuts make the BBC's role in news gathering particularly important. We accept that any management must look to providing the best value for money in news as elsewhere. Nevertheless the reductions have not all been in the name of greater efficiency but because of a poorer than expected licence fee settlement. We believe that the BBC should avoid making cuts which have the effect of harming high quality and efficient news programmes when journalism is so central to the Corporation's PSB remit.

306.  We note in passing Jonathan Ross's comments that he is worth "1000 BBC journalists"[113]. Salaries like Mr Ross' (who is reported to be paid a £6 million annual salary by the BBC) can only be afforded after the public service duties like news and current affairs have been financed. In April 2008 the BBC Trust published a report on the amount of money the Corporation is paying for "on-screen and on-air talent". It concluded there was no evidence that the BBC was paying more than the 'market price' for talent or pushing up prices overall. As the report showed however, in 2006/07, the BBC paid-out £204m to "on-screen and on-air talent" and that inflation in this market was rising by 6% a year, compared to only 3.6% internally. The BBC's spending on the salaries of its presenters and personalities represents a considerable proportion of the BBC's licence-fee funded budget. We recommend that the BBC Trust should monitor closely spending growth in this area to ensure that the Corporation can adequately fulfil and fund all its public purposes and particularly news and current affairs.

The commercial PSB channels

307.  The commercial PSB channels provide strong competition for the BBC. Each channel provides different editorial styles and content. News at Ten has a different format to the BBC's 10 o'clock news. Channel Four news is different to both, as is Five news. The result is that the viewers have access to a range of voices and programmes that can attract different audiences. Ofcom's research shows that the public value diversity in public service broadcasting and that this is particularly true for news and current affairs. Participants in Ofcom's research suggested that competition for quality was a crucial benefit of plurality. Competition was seen to deliver a number of benefits including: high quality programming, impartiality and accountability. People also felt that plural provision catered for different tastes and provided different viewpoints[114].

How can PSB channels be afforded?

308.  The future of the commercial PSBs is now in question. Historically the commercial PSBs have undertaken their public service obligations in return for access to the limited analogue spectrum. They receive in effect an implied subsidy and competition was restricted by the capacity of analogue spectrum. However, as analogue switch-off approaches, the value of this subsidy is rapidly decreasing. By 2012 the analogue signal will be switched off entirely.

309.  At the same time the PSBs are also losing advertising revenues. When there were only two commercial channels they faced little competition for advertisers. Now there are literally hundreds of commercial channels on the digital platform and audiences are fragmenting. Some television advertising is transferring online and as mentioned in chapter two, Google's overall headline advertising revenues surpassed ITV1's for the first time in the third quarter of 2007[115].

310.  Ofcom suggests that looking forward to 2012 the revenue of commercial public service broadcasters will come under further pressure. It is estimated that by 2012 the value of the direct and indirect funding for ITV1, Channel 4 and Five will have declined by around two-thirds or £335 million since the passing of the Communications Act in 2003[116].

311.  On present trends funding for public service broadcasting will become increasingly concentrated on the BBC. By 2012/13, the BBC is forecast to receive 91% of all PSB funding, up from 81% in 2003/04[117].

312.  The future of channels 3, 4 and 5 are uncertain. In the period up to the end of the current commercial broadcasting licences (from 2011 to 2014) Ofcom suggests that ITV may find it harder and harder to sustain programming in the nations and regions. It says that one or more of the ITV1 licensees may consider handing back their licences. More recently The Guardian has reported that ITV is already calculating the costs of handing back some of its licences and losing its PSB status[118].

313.  Ofcom's analysis of Five's PSB contribution up to 2011 is more optimistic but it suggests that Channel 4's contribution to PSB could come under significant pressure in various areas including current affairs and international news. Luke Johnson, the Chairman of Channel 4, told us that Channel 4 is already finding it hard to commission independent production companies to make documentaries because it cannot offer them the money they need (Q 2233). For Channel 4 to continue its PSB contribution beyond 2011 it will need a new remit, a sustainable and proportionate funding model and accountability arrangements.

314.  If plurality in the delivery of public service content is still required then new funds will need to be found for providers beyond the BBC. The choices have been well rehearsed:

(i)  Direct public funding: possible options include direct taxation or proceeds from spectrum auctions or spectrum charging;

(ii)  The licence fee: possible options include using the licence fee funds currently ring-fenced for the Digital Switchover Help Scheme, top-slicing the licence fee so that non-BBC providers can benefit from it, or using BBC assets to support other providers;

(iii)  Regulatory assets: possible options include access to digital spectrum at below-market prices and revising the rules restricting the amount of advertising allowed;

(iv)  Industry funding: a wide range of industry levies could be considered (for example, in France a tax on internet providers is currently being considered as a way of funding public service broadcasting).

315.  We note that Ofcom assert that "it is likely that the main channels will want to continue UK national and international news after DSO, with or without regulatory obligation"[119]. However, the situation in the United States suggests that when news provision is left entirely to commercial forces it suffers. In the US the major networks have all moved their main news bulletins out of prime time due to commercial pressures, they have also cut journalism budgets and cut foreign news coverage. We also note that Ofcom have admitted that "Without a continuing regulatory requirement for "high quality" there may be unavoidable commercial pressures for cheaper, less original journalism"[120].

316.  ITN also referred to this, stating "while we believe there are good reasons for commercial PSB channels to continue to deliver national and international news post DSO, with or without regulatory obligation, (i.e. respectable viewing figures, anchor points for viewing, status and credibility, lower production costs) there is also a risk that a future ITV management might seek to marginalise news in favour of cheaply produced, cash generative programming such as quiz shows" (p 3).

317.  Although the value of the direct and indirect subsidies given to the PSBs is decreasing they will continue to have some worth. While spectrum scarcity will be much less of an issue after digital switchover, it is becoming apparent that it will not be eradicated altogether on the digital terrestrial platform (i.e. Freeview) which is the most popular means of receiving digital television. There will therefore almost certainly be scope for negotiating with ITV and Five over news obligations in return for Freeview licences.

318.  We emphatically believe that Public Service Broadcasting cannot be left to the BBC alone. We are very struck by Ofcom's prediction that by 2012/13 the BBC will receive 91% of all PSB funding. A continuing plurality of public service broadcasters should be an aim of public policy. This is particularly crucial for news and current affairs. Ofcom's research shows that the public values this plurality, especially in news. It also serves the valuable purpose of providing competition for the BBC. We therefore urge Ofcom to make news provision a priority on the PSBs when it comes to negotiating future service obligations.

319.  Eventually it will be for the Government to propose which channels will be given support and what form that support will take. The committee will want to return to this but in the meantime we make three comments.

320.  First, there are a number of issues that Government could act on now. One short term source of extra funding for the PSBs that we think Ofcom should consider are the residual funds from the BBC's targeted help scheme for digital switchover. This help scheme offers assistance with switchover to specified groups. It is being administered by the BBC and funded with up to £603 million ring-fenced by the Government in the licence fee to 2012-13. Following an early trial of this help scheme in Copeland, the NAO published a Value-For-Money report on preparations for digital switchover. The report indicated that the BBC may not need to use all the money that has been ring-fenced: "It is too early to draw firm conclusions on the funding requirement for the help scheme as the Copeland switchover had some distinctive features which mean it may not be representative. Our illustrative re-run of the Departments' cost model for the help scheme suggests that in a scenario where national take-up of scheme assistance mirrored that in Copeland, the funding requirement in the licence fee settlement to 2012-13 would reduce by some £250 million"[121].

321.  Several of our witnesses have suggested that the funds left over from this help scheme could be used to assist the commercial PSBs with switchover. Lord Puttnam, the Deputy Chairman of Channel 4, told us "My dream scenario is that somewhere between £100 and 150 million of [the residual funds from the targeted help scheme] be made available to Channel 4 to underpin its public service offering, and another £50 million becoming contestable funding, generally available in some other—possibly digital new media, form. That would be a convenient, relatively simple solution" (Q 2072). Luke Johnson told the Committee that there is "an elegance" to such a solution (Q 2249). Of course this would not be a long-term solution; any monies left over from the targeted help scheme will be available as a one off opportunity. We suggest that any residual funds left over from the BBC's targeted help scheme should be used to support the commercial PSBs in the medium term[122].

322.  Secondly, we believe that ITV's proposal for the abolition of the Contracts Rights Renewal system merits further consideration. The Contract Rights Renewal regulates the price of ITV airtime and restrains how ITV can negotiate with advertisers. It was put in place following the merger of Carlton and Granada. ITV had told us that it "is constraining ITV's ability to respond to market changes. It requires ITV1 to fulfil terms in contracts that reflect market conditions in 2002 and constrains ITV's ability to negotiate terms that reflect changes in those market conditions. In addition, it has contributed to price deflation—the price of UK airtime has fallen from the most valuable to the cheapest in Europe over ten years—which in turn is limiting ITV's ability to invest in content" (p 224). If the Contract Rights Renewal was abolished then ITV would have more money to invest in PSB content, although the impact on the other commercial PSBs would need to be considered. The obvious attraction of this proposal is that it is a non-subsidy solution.

323.  Thirdly, we are sceptical of the various proposals that have been put forward for top slicing the BBC licence fee. We observe that often these proposals have come from individuals or organisations who are no friends of the BBC and want to see a weaker corporation. The one certainty is that top slicing would lead to fewer resources for the BBC and our concern is that news and current affairs would again suffer.

324.  During his evidence to us Andy Burnham MP, the Secretary of State for Culture, Media and Sport suggested that there are ways the BBC could support other public service broadcasters without top-slicing the licence fee. In particular he proposed sharing facilities, such as equipment and studios, "rather than the BBC handing over a part of its current income or that being "top-sliced", could it make infrastructure available for others to use?" (Q 2428) We believe there is scope in the idea of sharing BBC facilities with other public service broadcasters and that this proposal should be further examined. The Government should take forward this work.

325.  What is clear from our examination is that the BBC will be at the centre of a fierce debate on the future of public service broadcasting. We repeat one of the main proposals in our last report where we expressed concern that the governance arrangements established by the last Royal Charter have resulted in a chairman of the BBC Trust who is more of a regulator than a chairman of one of the biggest media corporations in the world. Indeed as the Royal Charter makes clear the very title chairman of the BBC is an only "honorary" one only. We remain to be convinced that the new BBC corporate governance arrangements are more effective than those they replaced.

Privatising Channel 4?

326.  Channel 4 plays a very valuable role in news provision and has an important contribution to make to the diversity of television news. Ofcom recognised that Channel 4 has made a particular commitment to international coverage and the use of independent news producers which distinguishes its output from that of its competitors[123].

327.  Channel 4's structure is unique. It is publicly owned although dependent upon commercial advertising revenue. Against this background there have been a number of proposals for Channel 4 to be privatised. In the past there has been some discussion about privatising Channel 4. Luke Johnson told us that he is very much against such a step (Q 2265). He told us that if Channel 4 was run to satisfy shareholders then without a doubt it would turn its back on the majority of its news and current affairs programming "as quickly as you could" (Q 2263). Andy Duncan, the Chief Executive, said the channel would also move to cut its main news bulletin from an hour to 30 minutes (Q 2262). When we took evidence from the Secretary of State for Culture, Media and Sport, he was unable to give us an assurance that the Government would not privatise Channel 4. When we asked him to rule out unequivocally privatisation he stated that "These are not only decisions for me" (Q 2439).

328.  We believe that Channel 4 deserves certainty about its future structure particularly at a time when the outlook for the industry is so confused. From the point of view of news and current affairs we can see no advantage in making a change and can envisage no safeguards that would ensure Channel 4's commitment to quality news and current affairs would be maintained if it were privatised. We note also Channel 4's major role in using UK based independent producers. We urge the Government to provide Channel 4 with some certainty by clearly stating that privatisation is not an option under consideration.

The future of local and regional news

329.  Last year ITV proposed to Ofcom that from 2009 there should be a new structure for regional news in England and the Scottish Borders which would merge some regions effectively to reduce the number of regions by two. It also wished to phase out the news programmes produced in what they call 'subregions'. After meeting considerable opposition to these proposals ITV has now put forward an alternative structure which while still effectively reducing the number of regions would provide most of them with peak-time sub-regional or local 'opt-outs'—news summaries targeted at specific areas which are included within regional news programmes.

330.  In his evidence to us Michael Grade, the Chairman of ITV, explained the reasoning behind these proposals "we do believe that there is value for ITV audiences in the provision of regional news. There is an important democratic duty on us, I think … not to leave the BBC with a monopoly of regional news supply but we have to do it in a way that we can justify to our shareholders. The old map, which is an analogue map based on the original ITV transmitter configuration, is just not viable. What I wanted to do was to come up with a model, embracing technology, which is about portability of newsgathering now, which has changed out of all recognition ... I do not think the viewers will notice much, if any, difference because the newsgathering on the ground is what counts. The fact that we do not have a building in this town or that town is neither here nor there" (Q 1017).

331.  Ofcom is researching and evaluating these proposals and will launch a detailed consultation in the autumn. We note that these is some evidence that if ITV cuts back on its regional news provision then this will affect ITN's news gathering capabilities and have a knock on effect on the quality of Channel 4 news. In its written evidence Channel 4 stated "A retreat in terms of the amount of newsgathering in the nations and regions by ITV would have a knock-on impact on the quality and range of newsgathering resource available to ITN's other customers including Channel 4 News" (p 457).

332.  We are concerned about ITV's proposals to scale back its regional news structure. Ofcom should carefully examine whether ITV's policy will have an impact on local newsrooms and their ability to quickly and accurately cover stories of national importance. Ofcom should also consider the implications that a cut in ITV regional news commitments will have on the news gathering capabilities of ITN and in turn the overall quality of ITV and Channel 4 news. We believe that plurality of regional television news is important and if ITV reduce their commitments in this area the BBC will have very little effective competition.

Are changes needed to the regulatory framework governing PSBs?

333.  The Communications Act 2003 imposes four separate obligations on PSBs in terms of news. These obligations relate to the quantity of news, its place in the schedule, a requirement that it be of "high quality" and in the case of Channel 3 that its news provider is appropriately resourced.

334.  The same Act sets quotas for UK national news, international news and UK nations/regional news on the commercial PSBs in both peak and off-peak viewing times. We are content with the system for assessing and setting quotas across the PSBs at appropriate places in the schedule, we received no evidence calling for change to this system.

335.  The Communications Act 2003 also requires Ofcom to ensure that the news programmes and current affairs programmes broadcast on the commercial PSBs are of "high quality" and deal with both national and international matters. For the BBC this is the responsibility of the BBC Trust. However, the term "high quality" is not defined in legislation and Ofcom have not designed any systematic way of monitoring the quality of news or holding companies responsible for the quality of their broadcast news.

336.  When we were in the US we were very impressed by the work of the Project for Excellence in Journalism, which produces an annual report on the state of the US news media. This report monitors changes in the type of stories that news organisations are covering, the balance of national and international coverage, reliance on news agencies, the degree of original journalism they are investing in and many other factors. There is no equivalent study of the UK news media and in the case of broadcast news it would be a particularly valuable tool with which to monitor adherence to statutory duties.

337.  We recommend that Ofcom should work to define more systematically "high-quality" news and to agree a number of indicators for assessing it. Ofcom should produce an annual report monitoring the quality and quantity of PSB news and Ofcom should also develop a mechanism for holding companies responsible if their news falls short of quality thresholds.

338.  In addition to its powers to assess the quantity, scheduling and quality of PSB news, Ofcom has a particular power under the 2003 Act in relation to Channel 3 to ensure that its news programmes can compete with all other television news programmes, most notably the BBC. In order to ensure this Ofcom has powers to check the resources available to whichever company it approves as Channel 3's news provider (currently ITN).

339.  ITV News attracts the largest audiences of any of the commercial PSBs' news bulletins and the regulatory system is set up to reflect its important position as the main news competitor to the BBC. This relationship between the level of regulation and the size of the audience is also reflected in the Secretary of State's reserved power to require Channel 5's news to be provided by an appointed news provider if its audience becomes "broadly equivalent" to Channel 3's[124].

340.  Given the evidence we reviewed in chapter two about the declining number of specialist correspondents and the increasing reliance on news agencies and press releases, it would be sensible for Ofcom to be able to monitor the resources available to all the companies which provide news for the commercial PSBs. While we welcome the flexibility within the Communications Act that allows the Secretary of State to require Five news to be provided by an appointed news provider, we see no sense in the Secretary of State having this power when Ofcom is the industry expert. Ed Richards, the Chief Executive of Ofcom, suggested that he would be in favour of symmetry in Ofcom's regulatory powers for all commercial PSB news providers. He told us that if you were to try and identify any omission in the Communications Act 2003 then not giving Ofcom "an equivalent locus is in relation to resourcing of Channel 4, Channel 5, and regional news" would be one of them (Q 872).

341.  We therefore recommend that Ofcom should be given powers to check the resourcing of all the commercial PSB news providers, rather than just Channel 3's appointed news provider. Ofcom should also develop a series of indicators against which to measure the resourcing of a news organisation and should publish an annual report on the resourcing of all the PSB news services (this could be published as part of the annual report on quality recommended in para 337).

342.  In para 337 and para 341 we recommend that Ofcom should monitor the resourcing, quality and quantity of news on the commercial PSB channels and publish an annual report. While we believe Ofcom should start doing this as soon as possible, in the future we believe there should be a statutory duty on Ofcom to undertake these new duties.

Are changes needed to the code of standards all broadcast news is subject to?

343.  In addition to the quantity, quality and scheduling requirements that PSB news is subject to, all UK radio and television broadcasts are currently subject to regulation governing the standards of their output. These standards are universal and do not just apply to the five terrestrial channels. They relate to impartiality and accuracy, harm and offence and privacy and fairness. Of particular relevance to news broadcasts are the requirements that all news included in television and radio services should be presented with "due impartiality". Ofcom's Broadcasting Code defines "due impartiality":

"'Due' is an important qualification to the concept of impartiality. Impartiality itself means not favouring one side over another. 'Due' means adequate or appropriate to the subject and nature of the programme. So 'due impartiality' does not mean an equal division of time has to be given to every view, or that every argument and every facet of every argument has to be represented. The approach to due impartiality may vary according to the nature of the subject, the type of programme and channel, the likely expectation of the audience as to content, and the extent to which the content and approach is signalled to the audience"[125].

344.  Ofcom has launched a public debate about the future of the impartiality requirements. They proposed that a debate should begin on whether the non-PSB channels should be allowed to offer partial news in the same way that newspapers and some websites do at present and whether impartiality is a barrier to diversity. We are concerned with this argument. We believe that impartial news is vital to the functioning of a free and informed society. It is also an important safeguard against proprietorial interference in news. The benefits of the requirements for due impartiality can be seen in the relatively high levels of trust placed in television and radio news by the public. The most recent figures, published in the British Journalism Review, demonstrate that although trust in journalism is falling across the board, the public distinction between broadcast and print remains. While 61% of the public trust BBC journalists to "tell the truth" and 51% trust Channel 4 and ITV journalists, the equivalent figures for print journalists are 43% for the quality press, 18% for the mid-market press and 15% for the red-tops[126].

345.  However, there are some who question whether the existing regulatory system is sustainable beyond digital switchover. Ofcom, for example, states that "universal impartiality may become less enforceable in a digital environment". It goes on to argue that channels with PSB status should remain subject to impartiality rules but asks "For channels other than the main PSBs, is impartiality still important, or is it a barrier to diversity in an era with a wide range of services available to viewers?"[127].

346.  The television journalists who gave evidence to us valued impartiality requirements. Ms Dorothy Byrne, Channel 4's Head of News and Current Affairs told us, "I would say that due impartiality is what makes the viewer understand that they can trust the news and that it is true …" (Q 82) Mr Jonathan Munro, Deputy Editor, ITV News and Director of News supported this argument: "the unique selling point of terrestrial television news [is that] our standards need to be maintained at the very highest level on accuracy, on impartiality [and] on sourcing … that will be the difference between what we do and what is available on a website" (Q 53).

347.  The reputation and proven track record of PSBs are also important when developing their own online news ventures. Dorothy Byrne thought that in "news on the web and radio, in each of these new territories what we are taking is the name Channel 4 News and saying to people: "You can switch this on, you can tap into it but you know that it is impartial; you know that you can trust it" (Q 83).

348.  Unlike all the other public service broadcasters, the BBC's news is subject to regulation on impartiality and fairness, not by Ofcom but by the BBC Trust. In June 2007, the Trust produced a report which stated that "Impartiality has always been (together with independence) the BBC's defining quality"[128].

349.  We believe that the impartiality requirements of PSBs are an important safeguard of the plurality of voices heard on broadcast news. While Ofcom is not proposing to relax the impartiality rules for the PSBs, we feel it is important to underline why they will continue to be necessary post-digital switchover.

IMPARTIALITY ON THE NON-PSB CHANNELS

350.  The question asked by Ofcom is "For channels other than the main PSBs, is impartiality still important, or is it a barrier to diversity". In considering this question, we believe that it is important to distinguish between news for a UK audience, and news produced abroad for a foreign audience but re-broadcast in the UK to small audiences on satellite and cable television.

351.  Many experienced journalists within the industry questioned the benefit of relaxing the impartiality rules for non-PSBs. Dorothy Byrne said that, "all news should be duly impartial and that it would be a retrograde step in a multicultural society, in particular, to say that we would have news programmes or channels which pandered to prejudices of particular groups. I do not think it helps anybody in society to start having news which is not duly impartial. I think that would be going backwards" (Q 83). Jim Gray, News Editor of Channel 4 News, supported this assessment, saying "at heart, an authentic news service as opposed to an opinion-based news service should be duly impartial" (Q 83). Channel Four's written submission stated that, "We believe that the maintenance of these requirements is central to maintaining the quality of broadcast journalism in the UK" (p 455). We do not, therefore, support the proposal floated by Ofcom to remove impartiality requirements for non-PSB licensed TV services. In the current circumstances the removal of these provisions would largely affect just one major news provider—Sky—which is itself controlled by a company that owns over 35% of the UK's national newspaper market.

352.  Much of the debate surrounding the relaxation of impartiality rules has been concerned with engaging those parts of society that feel alienated from mainstream news and its agendas. The evidence that we heard raises considerable doubts as to whether impartiality lies at the core of the problem. Our own research has shown that readership of newspapers, which are partial, has declined most markedly amongst the young. We therefore see little evidence in other markets that partial news is any more likely to attract younger audiences than impartial news. This conclusion is reinforced by evidence from the United States where the Fairness Doctrine (the US version of impartiality rules) was abandoned in the 1980s but this abandonment has not led to a greater engagement with news.

353.  We believe that any weakening of the impartiality requirements as they apply to UK broadcasters would have a negative impact in the quality and trustworthiness of the country's news. Such a move would not benefit the public or journalists and could run the risk of undermining the most important medium for news.

IMPARTIALITY ON FOREIGN BASED NEWS CHANNELS

354.  It is very hard for Ofcom to enforce the impartiality requirements on news produced abroad but re-broadcast here to small audiences on cable and satellite television. Ed Richards told us that there is already, in effect, a two-tier regulatory system:

"Hitherto, we have not sought to regulate the channels like Fox, and there are two or three others ... The reason why we have not so far done so is because there are two defining differences which mark them out as very different to the main UK channels. The first is that they are targeted, very clearly and explicitly, at a different audience. Their presence in the UK is really a re-broadcast … The second difference is that, certainly at the moment, they have extremely small audience shares" (Q 877).

112   Phase One: The Digital Opportunity: Ofcom's second public service broadcasting review, Ofcom, 10 April 2008, fig 5. Back

113   Mr Ross made this claim while presenting the British Comedy Awards in December 2007. Back

114   Phase One: The Digital Opportunity, Ofcom's second public service broadcasting review, Ofcom, 10 April 2008, para 3.39. Back

115   Dan Sabbagh, Google Shows ITV a Vision for the Future, The Times, 30 October 2007. Back

116   Phase One: The Digital Opportunity, Ofcom's second public service broadcasting review, Ofcom, 10 April 2008, para 7.17. Back

117   Ibid, paras 7.11 and 7.12. Back

118   http://www.guardian.co.uk/media/2008/apr/25/itv.television1 Back

119   New News, Future News: The challenges for television news after digital switchover, Ofcom, 4 July 2007; para 1.4. Back

120   Ibid, pg. 6. Back

121   Value for Money Report: Preparing for Digital Switchover, National Audit Office, Executive Summary, February 2008. Back

122   Any such transfer of funds would need to conform with European Union rules on State Aid in relation to public service broadcasting. Back

123   New News, Future News: The challenges for television news after digital switchover, Ofcom, 4 July 2007; paras 3.31 & 3.32. Back

124   Communications Act 2003, S283 (1)(5). Back

125   Ofcom Standards Code, Section 5-Due Impartiality and Due Accuracy and Undue Prominence of Views and Opinions. Back

126   Trust and the Media a BJR/You Gov Poll, The British Journalism Review, Vol 19, No. 2, June 2008. Back

127   New News, Future News: The challenges for television news after digital switchover, Ofcom, 4 July 2007; pg. 71. Back

128   From Seesaw to Wagon Wheel-Safeguarding impartiality in the 21st century, BBC Trust, June 2007, pg. 2. Back