Ofcom: lost focus in PSB review?

From Caesar’s … I mean … Ed Richards’ speech to the RTS:

‘There are in fact real issues facing our industry; issues that need to be confronted, argued about and addressed.

• How do we strike a fair balance of public service obligations alongside the enduring value of ITVs licence?
• How do we ensure channel 4 has a sustainable economic model and clear purpose in the future?
• How, if at all, can we secure a range of public service content including news in our nations and regions in the future? ‘

‘Our industry’?  Ofcom’s industry is regulation in the public interest, not broadcasting.  Can you imagine the head of the Environment Agency addressing regulated firms and using the same term?  It would be unthinkable.

Ofcom needs to remember what it said when this PSB review was launched:

‘Ofcom’s perspective on these issues will be unashamedly focused on the citizen and the consumer, on the interests of audiences, of viewers, of listeners.  Of course we must understand the mechanics, the incentives and the motivations of producers and broadcasters, but our starting point is the interests of citizens and consumers and this will infuse our approach.’

Well, it doesn’t take an expert to read Richards’ speech as being mainly focused on the health of the regulated firms.  Now of course Ofcom also needs to focus on broadcasters, but too much of this proceeding resembles what a public choice theorist would say about the politics of regulation:

Rent seeking by regulated firms is the biggest danger.

Rent seeking arguments by broadcasters in this case involve the most subjective concept– television quality.  Quality and its rent-seeking twin, universality, are almost always used by incumbent firms to secure benefits from the regulatory state.  The old Bell system in the U.S. used those arguments for years, delaying the onset of true competition.  In the UK context:  ‘people are willing to pay’, we are told, for more quality and more universality.  Add in the dazzle of what Richards calls ’show business’, the vague notion of Britishness and trade union support for additional spending, and it’s a perfect recipe for regulatory capture. 

Anyway — everyone is well-intentioned, I am sure, but the outcome is entirely predictable if you buy into public choice theory.  I’m not sure I do entirely, but it tends to explain more outcomes than other theories of regulation.

Overall, I thought the money line was here:

‘It’s fair to say that there was almost no support at all for the ‘BBC only’ model.  Save, that is, for two private individuals who wrote in to support the ‘BBC only’ option.  One began their letter by saying: “I don’t have a television set, but …”‘

By the way, you can full-text search comments on Ofcom’s website.  There was no comment that came up with this quote when I searched earlier today.  If that comment was so influential, I wonder where it is?